African countries continue to charge exorbitant airline taxes, increasing airfares, lowering passenger traffic and limiting airlines’ continental network growth, warns the African Airlines Association (AFRAA) Taxes and Charges Study Review for 2024.
“As the aviation market recovers from the COVID-19 pandemic, many countries have reintroduced and even raised taxes to offset fiscal deficits, leading to higher operational costs for airlines,” said the report.
The report found that African air passengers pay an average of US$68 (R1 218), a 3% increase compared with 2022, placing African taxes and charges above the Middle East’s average of US$34 (R609), and Europe with US$30 (R537).
The report also stated that North and West African countries have the highest international departure levies. It noted that countries with some of the highest passenger traffic levels were also those with the lowest airline taxes.
Aviation the ‘cash cow’
“Historically, many African governments have looked at aviation as an easy cash cow target, but air transport industry bodies such as IATA, AASA, Barsa and AFRAA, as well as their counterparts in allied sectors, have increasingly flagged this issue as the biggest impediment to the overall sustainability of the airline industry on the continent and to broader economic growth and job creation,” explained Linden Birns, the Founder of Plane Talking.
While Birns admits that inflation plays a role, he said that in most instances the cost increases that had been approved and implemented had outstripped inflation.
According to Birns, when tracing how levies and other airline charges are used, there is a lack of transparency, and added that high fees were often accompanied by poor infrastructure and aviation service provision.
“Anything labelled a ‘tax’ goes straight to governments’ fiscus with no guarantee that it is even ploughed back into improving air transport or tourism,” said Birns. “Hence AASA’s recent call for Acsa and ATNS to be transparent and show how and where they have spent the money collected from user charges over the past few years while at the same time lowering their service standards.”
Accessibility setback
Sean Mendis, aviation consultant, explained that the impact of high aviation fees on passenger traffic is significant, especially in developing countries.
“It’s a vicious circle because when countries say that aviation is for the elite and so they must tax it more, they end up pricing aviation so that only the elite can afford it,” said Mendis.
“The reality is, if governments focus on infrastructural improvements, they wind up giving more confidence to airlines, encouraging them to, not only add more flights, but make their own investments into fleet and infrastructural improvement on their side.”
Mendis said this initiated a domino effect, whereby improved infrastructure attracted more competition, new market entrants, drove down costs and created passenger volume so that the cost recovery on a user-cost basis would improve.
“It may be a bit of a cliché, but if African governments build it (aviation infrastructure), airlines and passengers will come. That demand is almost always solidified and grown by having infrastructure in place,” said Mendis.
