Africa is expected to outpace global traffic growth next year but airlines on the continent continue to operate under some of the world’s most challenging conditions, leaving them with the smallest share of global industry profits and extremely thin margins.
“Demand for air travel in Africa is rising faster than in many other parts of the world, but profitability is not keeping pace. African airlines are capturing only a fraction of aviation’s economic value. Addressing the barriers that constrain growth is essential to ensure the region’s traffic expansion also delivers financial strength,” said Kamil Al-Awadhi, IATA Regional VP of Africa and Middle East, during a recent IATA Africa media roundtable.
Challenging operating environment
“Low GDP per capita across much of the continent limits discretionary spending, making air travel highly price sensitive and restricting its growth potential,” said Al-Awadhi.
African airlines also face the highest operating costs compared with global averages. Fuel costs are around 17% higher, taxes and charges 12% to 15% more, air navigation charges about 10% higher, and maintenance, insurance, and capital costs exceeding global averages by between 6% and 10%. Africa also has the highest average corporate tax rate of any region analysed, at 28%.
This is exacerbated by limited intra-continental connectivity, with only 19% of intra-Africa routes having direct flights.
Supply chain problems
IATA’s analysis noted aircraft and aircraft parts availability as one of the most significant constraints on industry growth, with Africa the most severely affected region.
“The aircraft and aircraft parts supply chain challenges are tougher in Africa without a doubt, compared with the rest of the regions. IATA is trying to push manufacturers and suppliers to put more effort into their engagement with African carriers and educate them about how bad the situation is in Africa,” said Al-Awadhi.
While deliveries of new aircraft began increasing in late 2025 and production is expected to accelerate in 2026, demand is forecast to continue to outstrip supply. IATA estimates that aircraft global delivery shortfalls now total at least 5 300 aircraft, order backlogs have surpassed 17 000 aircraft and, as a result, average fleet age has risen to 15,1 years.
A study by IATA and Oliver Wymann estimated that the cost to the airline industry due to the supply chain bottlenecks would be more than $11 billion (R185 billion) in 2025. It estimates that excess fuel costs will amount to $4,2 billion (R70,8 billion), additional maintenance $3,1 billion (R52,2 billion), engine leasing costs $2,6 million (R43,8 billion) and surplus inventory holding $1,4 billion (R23,6 billion).
Al-Awadhi explained that African carriers were attempting to increase their maintenance, repair and overhaul (MRO) capacity in the interim to address smaller repairs on ageing fleets. However, they still require manufacturers and suppliers’ assistance with building professional capacity and facilities that meet the standards of the highly regulated industry.
“What IATA is doing, particularly in Africa, is heavily engaging with the aircraft manufacturers to see if they can facilitate increased availability of spares in the region and assist with setting up MRO facilities.”
Blocked funds
Of the $1,2 billion (R20,2 billion) in airline funds blocked globally as of October, Africa accounts for 79%, or $954 million (R16,1 billion).
Six African countries are placed in the top 10 countries with the most blocked funds: Algeria is now the largest blocked funds market, owing $307 million (R5,2 billion); the XAF Zone, including six Central African countries, owes $179 million (R3 billion); Mozambique owes $91 million (R1,5 billion); Angola owes $81 million (R1,4 billion); Zimbabwe owes $67 million (R1 billion) and Ethiopia owes $54 million (R910 million).
Restrictions hindering the release of these funds include burdensome or inconsistent procedures to obtain repatriation approval, delays in obtaining approval, shortage or lack of foreign exchange or other limitations imposed by governments or central banks.
Al-Awadhi noted that South Africa had no blocked funds, but that it should be concerned by the funds owed to its airlines by other African countries.
Long-term potential
Despite current challenges, Africa’s market is forecast to grow 4,1% annually, reaching 411 million passengers in the next 20 years, representing the world’s third-fastest growth rate.
“Realising this potential will require focused reforms to reduce barriers, improve affordability, and expand connectivity,” said Al-Awadhi.
“Governments must treat aviation as a catalyst for development, not a source of revenue. That means reducing costs, improving infrastructure, and advancing market liberalisation through the Yamoussoukro Decision and SAATM. With the right policy support, aviation can be a powerful driver of economic transformation across Africa.”
