Airlines feel the pinch in depressed sector

Thanks to the low oil and gas prices globally, local industry is preparing itself for the likelihood of low demand for oil and gas equipment. That’s according to Sanjeev Gadhia, CEO of Astral Aviation, a cargo airline that operates dedicated oil and gas flights from its Nairobi hub to Juba in South Sudan, Lagos in Nigeria, Pemba in Mozambique as well as to Dares- salaam, Mwanza, Zanzibar, Entebbe and Kigali. “Prices have dropped and one can therefore expect a drop in demand for equipment in southern Africa – even Africa as a whole at the moment,” he told FTW. “We expect this will gradually increase towards the third quarter of the year and that volumes will then start to pick up,” he said. A reduction in budgets for oil and gas exploration along with the postponement of extraction of reserves were the two most likely trends of a depressed oil and gas sector, he added. “We are starting to see the impact of this. Volumes have been declining and are down over 20% when compared to 2014.” According to Gadhia, the impact of lower oil and gas prices on the economies of Nigeria, Angola, Algeria and Ghana will be challenging in the immediate future. But, he said, organisations such as Astral remained committed to the oil and gas industry and to improving its service offerings. “We have therefore recently commenced flights for oil equipment from Nairobi to Lokichar in Turkana which is the area near a site where there is ongoing exploration for oil.” National Airline Service is the GSA for Astral Aviation.