Acsa puts emergency measures in place to maintain jet fuel supply at OR Tambo
Supplies of jet fuel to OR Tambo, one of the busiest airports in Africa, have been interrupted in recent weeks by the floods in KwaZulu-Natal, which have damaged railway lines operated by Transnet Freight Rail.
The Airports Company South Africa (Acsa) has moved to reassure the aviation industry that its stock of jet fuel at OR Tambo International Airport in Gauteng is stable and the state-owned enterprise has emergency contingency plans available if it faces severe fuel shortages.
Acsa is a state-owned enterprise that manages SA’s nine biggest airports, including OR Tambo in Gauteng, Cape Town International in the Western Cape and King Shaka International in KwaZulu-Natal.
Supplies of jet fuel to OR Tambo, one of the busiest airports in Africa, have been negatively impacted in recent weeks by the floods in KwaZulu-Natal, which have damaged railway lines operated by Transnet Freight Rail. Jet fuel for the aviation industry at OR Tambo is transported by rail from KwaZulu-Natal to Gauteng.
The floods have disrupted the supply of jet fuel via railway, throwing the aviation industry into a tailspin. Airlines at OR Tambo have been forced to cancel flights due to shortages of jet fuel and others have been forced to reroute flights to other Acsa-operated airports to refuel, which is a costly exercise.
Airlines are responsible for procuring their own fuel through contracts with suppliers. Acsa provides storage facilities for fuel at its airports.
Some fuel suppliers, including Sasol, have enforced force majeure on fuel supply contracts involving airlines because the flooding in KwaZulu-Natal has affected their operations and infrastructure. In other words, they cannot temporarily fulfil contractual obligations to supply fuel to sectors including aviation while their infrastructure is in repair mode. Airlines that depend on fuel suppliers whose operations have been affected by the flooding have faced jet fuel shortages at OR Tambo. However, not all airlines use the same fuel suppliers.
The Acsa impact
Acsa has detailed the cost of the fuel shortages on its operations and the broader aviation industry, which is still recovering from the Covid-19 pandemic, which grounded its entire operations.
Since the floods damaged Transnet railway lines at the beginning of April, Acsa says there have been 14 flight cancellations by two airlines from April 24 to May 1, mostly at OR Tambo, affecting approximately 3,150 passengers. So far, international, domestic, and regional flights have been affected. Domestic and regional flight operators can plan around the fuel shortages because they can easily refuel at other SA airports.
The cancellations have affected Acsa’s revenue, with the state-owned enterprise losing at least R1.5-million. Acsa generates fees by charging airlines when their aircraft lands at its nine airports across the country and when passengers go through its airports.
In a briefing with journalists on Monday, Acsa group CEO Mpumi Mpofu said OR Tambo is operating “lower than normal” in terms of its available jet fuel stock. But the supply “remains stable”. OR Tambo usually has six or seven days’ worth of fuel stock to meet the demands of airlines and for the airport to function without any disruptions. But at last count on Monday, Mpofu said OR Tambo had 3.5 days’ worth of fuel stock.
“We are unlikely to go down further to two days [worth of fuel stock]. If we reach these levels, then it would be a crisis. The jet fuel supply has decreased but it is stable,” said Mpofu.
On Monday, Acsa executives met with executives from Transnet Freight Rail, the Central Energy Fund (CEF), the South African Petroleum Industry Association, the Board of Airline Representatives and the Department of Mineral Resources and Energy to develop emergency contingency plans if jet fuel shortages intensified.
A shipment of 20 million litres of fuel that landed in the Port of Durban would be pumped to the refinery of the National Petroleum Refiners of South Africa (Natref) by Monday evening. Then it will be piped to OR Tambo, which ordinarily needs 16 million litres of fuel supply a week from the Natref refinery.
Acsa, together with the CEF, has also developed a framework to provide as much as 1.5 million litres of jet fuel to airlines that have been affected by forces majeures being enforced by their suppliers.
It will be a long time before Transnet’s railway line from KwaZulu-Natal to Gauteng returns to normal operating levels. Acsa’s Mpofu said Transnet had informed it that its railway line would return to 50% of its capacity by 9 June, with 100% set to be restored by the end of October. DM/BM
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