IATA’s Global Outlook for Air Transport revealed that while profits were on the rise, African airlines would continue to face exceptionally high operational costs.
During the association’s 81st Annual General Meeting, Kamil Al-Awadhi, Regional Vice President for Africa and Middle East for IATA, explained that African airlines faced unique cost challenges that far exceeded global averages, including:
- In 2024, jet fuel prices in Africa were 17% higher than the global average, accounting for 40% of airlines’ operating costs, compared with 25% globally.
- Taxes, fees and charges were 12-15% higher.
- Air navigation charges were 10% higher.
- Maintenance, insurance, and cost of capital was 6-10% more expensive.
Global vs African profits
In 2024, global aviation’s nett profit was $32,4 billion (R579,1 billion), marking an increase on 2023’s nett profit of $27,4 billion (R489,7 billion). IATA forecasts a nett profit of $36 billion (R643,5 billion) in 2025. African aviation also experienced a nett profit in 2024, which IATA predicts will remain stable in 2025.
The global nett profit margin was 3,4%, showing an improvement on the 3% achieved in 2023. IATA expects the global nett profit margin to grow to 3,7% in 2025.
In 2024, Africa’s nett profit margin was 1%, compared with 0,4% in 2023. It is forecast to grow to 1.1% in 2025.
While the global profit per passenger falls below expectations, 2024’s $6,14 (R110) per passenger exceeds the $6,09 (R109) per passenger earned in 2023. IATA expects this to grow to $7,20 (R129) per passenger per segment in 2025.
Africa’s profit per passenger remains far below the global average, with only $1,2 (R21,5) per passenger in 2024. While this shows a significant increase on the $0,5 (R9) per passenger earned in 2023, IATA expects a minimal increase to $1,3 (R23,2) profit per passenger in 2025.
According to IATA, these profits continue to be affected by the high operational costs and low propensity for air travel expenditure in many African airlines’ home markets.
Additionally, African airlines are impacted by a shortage of aircraft and spare parts, as well as a shortage of foreign currency, particularly US dollars.
