By Chinelo Obogo
The International Air Transport Association (IATA) has said Africa’s airlines are expected to earn a collective net profit of $100 million in 2024, which translates into just 90 cents per passenger—well below the global average of $6.14.
IATA’s Regional Vice President for Africa and the Middle East, Kamil Alawadhi, said, profit margins are anticipated to be 0.6 per cent of revenue, up from 0.4 per cent in 2023. This remains significantly lower than the global net profit margin of 3.1 per cent and the load factor is expected to reach 61.9 per cent, slightly ahead of the 59.8 per cent breakeven load factor for African airlines.
“Africa’s airlines are making a collective profit. That is good news. But it is razor-thin and well below the global benchmark. And there are wide variations across the continent where many individual airlines still struggle with losses. The demand to travel is there. To meet it, the African airline sector needs to overcome many challenges, not least of which are infrastructure deficiencies, high costs, onerous taxation, and the failure to broadly implement a continent-wide multilateral traffic rights regime.
“The challenges facing African aviation are significant, but they are not insurmountable. IATA’s Focus Africa initiative is by no means a panacea, but it does lay out a framework to build a stronger aviation sector that will provide even better support to economic growth and social development. The prize for working together across the continent for safe, efficient, and sustainable air connectivity is well worth focused policy efforts across the continent,” Alawadhi said.
On safety, he said Africa had no jet hull losses in 2023, for the second year in a row and the continent recorded no fatalities in commercial aviation accidents in 2023, as presented within the IATA Annual Safety Report. The all accident rate for Africa was 6.38 per million sectors which is an improvement on the five-year average of 7.11. Also, IOSA registered carriers continue to outperform non-IOSA registered carriers both on the continent and globally. There are currently 31 operators in Africa on the IOSA registry.
On connectivity, he said the Single African Air Transport Market (SAATM) seeks to liberalise civil aviation across the continent by removing restrictions on traffic rights for African airlines. Moreover, he also revealed that an IATA analysis of 607 bilateral air service agreements (BASA’s) in Africa revealed limitations on the development of intra-Africa connectivity because the implementation of over half of these agreements was being compromised.
“Non-compliance of by African governments BASA’s is a major obstacle to achieving seamless regional connectivity and growth in the African aviation sector. To develop economy-boosting intra-Africa connectivity Africa’s governments must back SAATM with actions,” he said.