Fifteen African airlines are now combining approximately 2.1 billion litres of annual fuel demand across around 190 locations through the African Airlines Association (AFRAA) Fuel Project, using collective purchasing power to strengthen negotiations with suppliers and reduce one of the heaviest costs on airline balance sheets.
For African carriers, the economics are particularly significant. Fuel can account for more than 40% of an airline’s operating costs in some markets, making access to competitive pricing, reliable supply and consistent fuel quality central to profitability.
Speaking to African Pilot, senior graduate engineer, Gaoussou Konate (AFRAA’s Consulting Director, Technical and Operations) explained how the project has grown from a modest joint procurement initiative involving four airlines and four locations into a continent-wide collaboration built around scale, transparency, and collective bargaining.
The origins of the programme date back to 1996, when AFRAA’s Executive Committee reviewed the results of an earlier joint procurement project for Boeing 737-200 tyres.
The savings achieved prompted a wider question: if airlines could combine purchasing power for aircraft tyres, why not apply the same model to one of the industry’s highest-cost items?
The first fuel procurement initiative brought together EgyptAir, Kenya Airways, Ethiopian Airlines and Sudan Airways. Initial supply locations included London Heathrow, Rome Fiumicino, King Abdulaziz International Airport in Jeddah and Dar es Salaam.
Konate said the early savings were relatively modest, but the results demonstrated the potential of the approach. One participating airline saved approximately US$25,000 in a year at Dar es Salaam despite relatively low uplift volumes.
The programme later shared experience with the Arab Air Carriers Organization. After an interruption, AFRAA revived the initiative in 2011, and it has continued to grow in both airline participation and procurement volume.
Moving From Supplier-Controlled Pricing to Negotiated Margins
One of the most important changes introduced by collective procurement was a shift in how fuel contracts were structured.
Konate said airlines had historically entered agreements based on an into-plane price that could later be revised by suppliers as market conditions changed. The problem was that the supplier retained significant control over how and when those revisions were applied.
The market price of fuel can still fluctuate, but the airline group negotiates the differential, which includes the supplier’s margin. An independent pricing basis and agreed formula are then used to calculate the final into-plane price.
This approach gives participating airlines greater visibility into what they are paying and limits the supplier’s ability to change the commercial structure unilaterally.
As volumes have increased, so has the negotiating leverage.
Konate said the response from suppliers is visible each time AFRAA launches a fuel tender, with companies actively competing to submit proposals to the group.
The attraction is straightforward. A single smaller carrier may represent limited volume at one airport. Fifteen airlines collectively procuring billions of litres across a large network create a very different commercial proposition.
How the Contracting Model Works
The AFRAA Fuel Project combines volumes for negotiation, but AFRAA itself does not become the contracting fuel buyer.
Demand is consolidated at each station to create negotiating leverage. Once a supplier has been selected, individual contracts are signed between the supplier and each participating airline using the negotiated commercial terms.
“The volumes are combined at a station to give us negotiation leverage,” Konate explained.
Contracts generally run for 12 months, with common contract periods allowing the participating airlines to return to the market together for the next negotiation cycle.
This structure allows the group to benefit from scale while preserving the direct commercial relationship between airline and supplier.
Awards are made by station, meaning different suppliers may be selected at different airports depending on pricing, infrastructure, quality and other requirements.
Managing Fuel Volatility and Geopolitical Risk
The recent volatility in global fuel markets has again highlighted the vulnerability of airlines to events beyond their control.
Konate said the project’s pricing formula provides a degree of structural protection because the differential, including the supplier margin, has already been negotiated. The underlying commodity price may rise or fall, but the commercial differential remains governed by the contract.
Supply security requires a broader response. Participating airlines and the project committee monitor availability and consider operational options such as carrying additional fuel from locations where supply is more secure.
Over the medium and longer term, Konate believes Africa also needs to address its own refining capacity.
Several African countries produce oil, but the continent remains heavily exposed to external refining and supply chains. Increasing African refinery capacity and making more aviation fuel available within the continent could strengthen resilience.
Why Small Airlines Benefit from the Same System
The project is not designed only for Africa’s largest carriers. Konate described smaller airlines as streams flowing into a larger river. Major carriers contribute substantial volumes, but smaller airlines increase the overall scale of the tender and benefit from negotiating power they could not create independently.
The model must also continue to work for the largest airlines. A major carrier with significant purchasing power may already be able to negotiate favourable terms on its own. For the collective model to remain viable, that airline must still gain more by staying in the group.
Konate said this principle was established during AFRAA’s earlier joint procurement work.
In one tyre procurement exercise, two participating airlines were buying the same manufacturer’s product at dramatically different prices. One was paying approximately double the other.
The challenge was not simply to reduce the higher price. The collective proposal also had to improve the position of the airline already receiving the better rate, giving both an incentive to remain within the group.
The same principle applies to fuel. The smaller carrier gains access to scale. The larger carrier gains access to an even bigger combined purchasing pool. “Everybody wins,” Konate said.
Consolidating Demand Across 15 Airlines
Managing fuel requirements across airlines of different sizes creates a significant administrative challenge.
A regional carrier operating turboprops has a very different fuel profile from a large network airline operating widebody aircraft. Demand also differs from station to station and changes as schedules evolve.
Konate said the system depends on collaboration and centralised consolidation of data.
Each participating airline submits its requirements. The AFRAA Secretariat and fuel committee combine the information and make the integrated data available within the participating group.
Individual memoranda of understanding and non-disclosure agreements support the process and allow airlines to share commercially sensitive information with greater confidence.
The consolidated data is regularly updated so suppliers receive accurate information on required uplift volumes at each station.
Transparency is a critical part of the model, particularly for smaller carriers that may otherwise have limited visibility into the broader market.
Reducing the Impact of Middlemen
Competitive fuel pricing can quickly be eroded by the complexity of African fuel supply chains. Fuel may move through refineries, traders, transport operators, storage facilities and airport infrastructure before reaching an aircraft. Each additional layer can introduce further cost.
Konate said AFRAA addresses this in two ways.
The first is supplier selection, AFRAA’s fuel supplier selection criteria are designed to avoid or limit unnecessary middlemen, including resellers that simply purchase fuel and add another margin before selling it onwards.
The second is price transparency, where pricing is linked to a local refinery, the project examines the ex-refinery price and the costs associated with moving the fuel through the supply chain to the airport. This may include ground transport, pipelines, storage and other applicable charges.
The differential is then negotiated with visibility into the wider cost structure.
The approach does not eliminate every intermediary, but it limits the ability of multiple parties to add opaque margins as fuel moves through the system.
Fuel Quality Remains a Safety Issue
Price is only one part of the procurement process. Fuel contamination can have serious safety consequences, making quality assurance essential across a network of approximately 190 locations.
Konate said the fuel committee uses certified fuel quality auditors who conduct regular inspections. Audits may also be unannounced.
Supplier selection incorporates fuel quality requirements, and the project uses the IATA Fuel Quality Pool audit framework as a reference. The intention is to ensure that storage and handling infrastructure meets the required standards and that airlines receive consistent fuel quality across the participating network.
Collective buying power again becomes important, the size of the group gives participating airlines greater influence over supplier behaviour, quality requirements and compliance.
Why More Airlines Have Not Yet Joined
With 15 participating carriers and clear potential benefits, one question is why every AFRAA member has not joined the project.
Konate said participation remains an individual airline decision.
AFRAA promotes the programme through its internal committees, annual meetings and external communication, but some carriers remain hesitant.
State-owned airlines may face an additional challenge. National procurement rules can prevent or delay participation in a joint purchasing structure, even where there is a clear commercial case. Konate said some state-owned carriers have successfully presented the benefits of the programme to their governments and obtained permission to participate.
Once an airline decides to join, the process can move quickly.
The carrier provides its fuel demand data, which is then incorporated into the combined volumes. Suppliers can be approached to extend the existing conditions to the additional airline.
Depending on the timing of the procurement cycle, Konate said a new participant could begin seeing a pricing benefit within approximately three months.
The main contracts generally run from the middle of one year to the middle of the next, so an airline joining near the end of a cycle can also be incorporated into the following full tender.
Sustainable Aviation Fuel is Already Entering the Equation
The Fuel Project is also beginning to accommodate sustainable aviation fuel. For European destinations where SAF requirements already apply, Konate said the relevant volumes are being included in procurement negotiations.
The strategic direction is clear, but the economics remain difficult. According to Konate, SAF can currently cost approximately 2.5 to four times as much as conventional aviation fuel, while availability at African airports remains limited.
That creates a direct conflict with the project’s wider objective of reducing airline operating costs.
AFRAA nevertheless sees SAF as part of the future procurement landscape, particularly given Africa’s potential feedstock resources.
“We cannot afford not to go towards it,” Konate said. The challenge is to develop production processes, technology and scale capable of turning African feedstock potential into SAF at a price airlines can afford.
Innovation will be critical. “What we need to see is innovation in the process to transform that potential in Africa into affordable SAF price impacting positively operational costs,” he said.
Targeting a Lower Fuel Cost Burden by 2030
The long-term ambition is to expand airline participation and increase the volume placed through the tender.
Subject to macroeconomic conditions, geopolitical stability and continued growth in participating volumes, Konate believes the programme could reduce the weight of fuel costs for participating airlines by between five and 10 percentage points by 2030.
The result would depend heavily on scale. The more airlines that participate and the greater the combined tender volume, the stronger the negotiating leverage.
Konate said the ideal objective is to bring every African airline into the programme, although a large proportion of the continent’s carriers could still create a significant impact even without universal participation.
For airlines operating in markets where fuel can absorb more than 40% of operating costs, a reduction of several percentage points could have substantial consequences for profitability and financial resilience.
Joint Procurement Could Move Beyond Fuel
AFRAA is also examining whether the principles developed through the Fuel Project could be applied to other airline inputs. Aircraft components are more complex because fleets differ, regulatory requirements vary and technical specifications are often highly specific.
The first opportunities are more likely to involve products that almost every airline uses.
Konate identified hydraulic fluid, Skydrol, and grease as examples of potential “low-hanging fruit” for future collaborative procurement.
The administrative, legal and commercial infrastructure developed through the Fuel Project could provide a foundation for these initiatives.
Airlines have already expressed interest in wider joint procurement, and AFRAA is examining how to address the regulatory and administrative barriers involved.
The significance of the Fuel Project extends beyond the litres purchased or the margins negotiated. It provides a working example of what African airlines can achieve when demand is consolidated rather than fragmented.
A single carrier enters a global fuel market with the purchasing power created by its own fleet and network. Fifteen carriers enter with 2.1 billion litres of combined demand.
For Konate, the central lesson is collaboration. “The name of the game is really collaboration, cooperation, joint approach,” he said.
In a sector where African airlines continue to face high operating costs, difficult supply chains and fragmented markets, the AFRAA Fuel Project shows how collective scale can become a commercial tool rather than simply an industry aspiration.
