The International Air Transport Association (IATA) has urged African governments to use the expanding aviation industry to boost economic and social development.
Recently, IATA announced that African airlines are projected to earn a collective net profit in 2024 for the second consecutive year, reflecting the sector’s resilience in recovering from the COVID-19 pandemic. However, the anticipated $100 million profit equates to just 90 cents per passenger, significantly lower than the global average of $6.14.
“Africa’s airlines achieving a collective profit is positive news, but the margin is razor-thin and far below the global benchmark. Many airlines across the continent still face losses despite the strong demand for travel. To meet this demand, the African airline sector must overcome numerous challenges, including infrastructure deficiencies, high costs, heavy taxation, and the lack of a widespread continent-wide multilateral traffic rights regime,” said Kamil Alawadhi, IATA’s Regional Vice President for Africa and the Middle East.
“The obstacles in African aviation are serious, but not insurmountable. IATA’s Focus Africa initiative, while not a cure-all, provides a framework to build a stronger aviation sector that can better support economic growth and social development. The goal of achieving safe, efficient, and sustainable air connectivity across the continent is well worth the focused policy efforts,” Alawadhi added.
2024 Financial Outlook Highlights
- Net Post-Tax Profit: African airlines are expected to achieve a net post-tax profit of $100 million, marking the second year of profits following the COVID crisis.
- Per Passenger Profit: Profit per passenger is projected to reach $0.90, nearly double the 2023 figure of $0.50, reflecting improved operational efficiency and increased demand. However, this is still well below the global average of $6.14.
- Profit as a Percentage of Revenue: Profit margins are anticipated to be 0.6% of revenue, up from 0.4% in 2023, but significantly lower than the global net profit margin of 3.1%.
- Revenue Passenger Kilometers (RPK) Growth: RPK growth is forecasted at 8.5%, indicating continued strong passenger demand across the region, though it lags behind the expected capacity growth of 9.1%.
- Load Factor: The load factor is expected to reach 61.9%, slightly ahead of the 59.8% breakeven load factor for African airlines.
IATA emphasized that while progress has been made, continued collaboration and policy efforts are essential to address the ongoing challenges and fully capitalize on the potential of Africa’s aviation sector.
