The International Air Transport Association (IATA) has issued a call to action to African governments, urging them to leverage the growing aviation sector to fuel economic and social development across the continent. IATA’s recent forecast predicts that African airlines are poised to achieve a collective net profit in 2024 for the second consecutive year, a testament to the sector’s resilience in the post-COVID recovery. Despite this positive outlook, the projected $100 million profit translates to a mere 90 cents per passenger, significantly trailing the global average of $6.14.
Kamil Alawadhi, IATA’s Regional Vice President for Africa and the Middle East, emphasized the need to address challenges hindering the sector’s growth. “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,” he stated.
Recognizing the hurdles, IATA’s Focus Africa initiative aims to provide a framework for building a stronger aviation sector. “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,” said Alawadhi.
The 2024 Financial Outlook highlights key priorities within Focus Africa. In terms of safety, Africa achieved a remarkable feat in 2023 with zero jet hull losses and commercial aviation fatalities, showcasing significant safety improvements. The continent’s all accident rate of 6.38 per million sectors reflects progress compared to the five-year average of 7.11. IOSA registered carriers continue to lead in safety performance.
Connectivity remains a crucial aspect, with the Single African Air Transport Market (SAATM) aiming to enhance intra-Africa connectivity by liberalizing civil aviation. However, implementation challenges persist due to non-compliance with bilateral air service agreements (BASAs) by African governments, hindering regional connectivity and economic growth.
Addressing the issue of blocked funds is critical for airlines operating in Africa, as it impacts their financial stability and operational efficiency. As of June 2024, African countries reported $880 million in blocked funds, accounting for slightly over 52% of the $1.68 billion total globally. This marks an improvement, particularly with Nigeria clearing 98% of its blocked funds, amounting to $831 million. The top five African countries grappling with blocked funds include Algeria ($261 million), XAF Zone ($140 million), Ethiopia ($115 million), Eritrea ($75 million), and Zimbabwe ($69 million).
Al Awadhi emphasized the immense potential of aviation in Africa. “The potential for aviation in Africa is huge. It has 17% of the world’s population yet only contributes about 2% of total global travel. While there are hurdles to overcome, through collaborative initiatives like Focus Africa with our partners including AFCAC, AFRAA and AASA we are addressing critical challenges hindering the advancement of aviation across Africa. Our goal is a safer, more efficient, and better-connected continent, driven by a diverse, skilled workforce to unleash aviation’s potential and unlock the economic and social opportunities,” he concluded.
