Despite challenges, there is sustained demand for air travel in Africa but the margins for African airlines are thin.
According to an updated outlook released by the International Air Transport Association (IATA), African airlines should achieve a combined profit of $200m during 2025, reflecting a 1.1% net margin. This translates into just $1.30 per passenger on each flight.
The growth will be partly driven by a 9% year-on-year increase in demand for passenger travel on the continent in 2024.
By comparison, globally, profits are expected to reach $36bn, with a 3.7% net margin which equates to $7.20 per passenger per flight.
Although the demand, revenues and profits globally are expected to increase this year, they will do so more slowly than previously projected according to IATA, whose membership tops 350 airlines across the world.
This projection is made against a backdrop of global uncertainties, conflicts and supply chain failures that continue to hamper the aviation industry.
Further, a shortage of aircraft and spare parts is dampening growth in Africa’s aviation industry and the shortage of foreign currency in some economies, particularly US dollars, is adding to the region’s challenges.
In Africa, the average passenger load factor is 74.5% compared to the global level of 81.8%. Similarly, the cargo load factor in Africa is 40.1% compared to 45.1% globally.
Globally, demand for air cargo — a key barometer of global trade — is expected to slow to 0.7% in 2025 (from 11.3% in 2024). However, for Africa, IATA’s outlook shows a converse picture as carriers on the continent have seen a 5.5% year-on-year fall in demand.
While lower jet fuel prices are providing relief, fuel still makes up about 25% of airlines’ input costs. The impact is even greater in Africa where fuel has to be imported. At the same time, sustainable aviation fuel (SAF) costs more than four times as much and current output meets only 0.7% of the industry’s total fuel needs.
For example, the bulk wholesale price of jet fuel for Joburg was $1.993/US gallon (roughly R36.90/US gallon) on June 2, translating to $0.53/litre (R 9.80/litre) — but that is before taxes and charges which include items such as a R0.17/litre carbon fuel levy, carbon tax at R236.00/ton and VAT of 15%.
There are also transport costs, such as pipelines, trucks and trains to get the fuel off ships and to airports, and storage and on-airport distribution costs.
Kamil Al-Awadhi, IATA regional vice-president Africa & Middle East, said during a briefing at the IATA’s 81st AGM and summit in Delphi, India earlier this month that the cost of doing business in Africa is on average 17% higher in terms of jet fuel, 12% to 15% higher in terms of taxes, fees and charges, and 10% higher in terms of air navigation charges, maintenance and insurance, while the cost of capital is on average 6%-10% higher.
Add to that blocked airline funds totalling about $919m and the result of this is high ticket prices. He said the barriers holding back Africa’s air transport potential included weak regional links: 80% of flights on the continent are international, while only 20% serve intra-African routes, thus limiting integration and economic development.
There is also a lack of competitiveness from African airlines as reflected in over 75% of international passengers flying on non-African carriers.
In Al-Awadhi’s view, this shows the urgent need to strengthen African airline competitiveness.
Africa accounts for just 2% to 3% of global air traffic, despite a growing population and economy. He said visa openness was one way to unlock potential.
Currently 28% of intra-African travel routes are visa free, up from 20% in 2016. About 44% of African countries offer e-visas — more than triple the 2016 figure.
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