Recently IATA announced that Africa\u2019s airlines are expected to earn a collective net profit in 2024 for the second year in a row. That is a welcome and hard-won result reflecting the sector\u2019s resilience in its post-COVID recovery. The expected $100 million profit, however, translates into just 90 cents per passenger\u2014well below the global average of $6.14.<\/p>\n
\u201cAfrica\u2019s 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,\u201d said Kamil Alawadhi, IATA\u2019s Regional Vice President for Africa and the Middle East.<\/p>\n
\u201cThe challenges facing African aviation are significant, but they are not insurmountable. IATA\u2019s 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,\u201d said Alawadhi.<\/p>\n
2024 Financial Outlook Highlights<\/b><\/p>\n
\u25aa\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Net Post-Tax Profit: African airlines are projected to achieve a net post-tax profit of $100 million, the second year of profits following the COVID crisis.<\/p>\n
\u25aa\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Per Passenger Profit: Profit per passenger is expected to reach USD 0.9, nearly doubling the 2023 figure of $0.5, reflecting improved operational efficiency and increased demand, but well behind the global average of $6.14.<\/p>\n
\u25aa\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Profit as a Percentage of Revenue: Profit margins are anticipated to be 0.6% of revenue, up from 0.4% in 2023. This remains significantly lower than the global net profit margin of 3.1%.<\/p>\n
\u25aa\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Revenue Passenger Kilometers (RPK) Growth: RPK growth is forecasted at 8.5%, indicating continued strong passenger demand across the region. This does, however, lag behind the expected growth in capacity of 9.1%.<\/p>\n
\u25aa\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Load Factor: The load factor is expected to reach 61.9%, slightly ahead of the 59.8% breakeven load factor for African Airlines.<\/p>\n
Focus Africa Priorities<\/b><\/p>\n
Focus Africa aims to address key challenges and opportunities within the continent’s aviation sector. The initiative emphasises six priority areas: Safety, Infrastructure, Connectivity, Finance and Distribution, Sustainability, and Future Skills.<\/p>\n
\u25aa\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Safety<\/b><\/p>\n
Africa had no jet hull losses in 2023, for the second year in a row. Moreover, 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.<\/p>\n
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.<\/p>\n
The priority for Africa continues to be the implementation of safety-critical ICAO Standards and Recommended Practices (SARPS) for safety. Under the Focus Africa initiative IATA introduced the Collaborative Aviation Safety Improvement Program (CASIP) to help deliver this.<\/p>\n
The Global Aviation Safety Plan (GASP) and the AFI Regional Aviation Safety Plan are targeting SARPS implementation at 75% for Africa. Currently, only 12 out of Africa’s 54 states meet this standard.<\/p>\n
\u25aa\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Connectivity<\/b><\/p>\n
The Single African Air Transport Market (SAATM) seeks to liberalise civil aviation across the continent by removing restrictions on traffic rights for African airlines. SAATM provides Africa with a ready-made mechanism to drive economic growth, but few governments have taken the steps needed for its implementation. Moreover, an IATA analysis of 607 bilateral air service agreements (BASA\u2019s) in Africa revealed limitations on the development of intra-Africa connectivity because the implementation of over half of these agreements was being compromised.<\/p>\n
Non-compliance of by African governments BASA\u2019s is a major obstacle to achieving seamless regional connectivity and growth in the African aviation sector. To develop economy-boosting intra-Africa connectivity Africa\u2019s governments must back SAATM with actions. This is another key element Focus Africa is addressing.<\/p>\n