The 81st International Air Transport Association (IATA) Annual Meeting held in New Delhi, India was scrutinized as African aviation took to Centre stage and the event highlighted growth potential, opportunities and challenges.
Intersection, challenge
Last week, the 81st International Air Transport Association (IATA) Annual General Meeting (AGM) press conference held in New Delhi, India highlighted key insights into the continent's aviation landscape, revealing promising opportunities and horrifying barriers.
The African aviation market holds a big promise as passenger demand increases and long-term forecasts are forecast to double by 2043. However, high costs, restrictive policies and infrastructure gaps continue to hinder progress.
In summary, the African aviation sector is at a crossroads, experiencing significant growth but tackling the sustained challenges that hamper its full potential.
Mixed grill
The continental aviation market shows resilience in passenger demand, with an annual increase of 9% from January to April 2025 above the global average compared to the same period in 2024. This growth underscores the continent's potential as a vibrant aviation hub driven by increased economic activity and an increase in the middle class.
However, the freight sector has painted a less optimistic picture, with demand falling 5.5% since the start of the year, lagging behind global trends.
This decline highlights structural challenges, such as limited freight infrastructure and high operating costs that continue to hinder Africa's competitiveness in global trade.
Progress of safety amid challenges
Safety continues to be the cornerstone of aviation, and Africa is making remarkable progress. The Continent recorded a deadly risk rate of zero for the second consecutive year in 2024. This is evidence of continued efforts through initiatives such as IATA's Joint Aviation Safety Improvement Program (CASIP).
However, the area reported 10 accidents in 2024. 40% are involved in turboprop aircraft, mainly due to runway excursions and landing gear issues.
While global accident rates rose slightly from 1.09 in 2023 in 2023, IATA members in Africa remained at a low rate of 0.90, reflecting the benefits of global standards and data sharing. Continuous investment in training, technology and infrastructure is essential to maintaining and building these benefits.
A bright future for passenger growth
The African aviation market has more than doubled by 2043, reaching 345 million passengers per year, with an average growth rate of 3.7% over the next 20 years.
This forecast reflects the continent's demographic and economic potential due to increased demand for urbanization and trade integration.
Countries like Ethiopia and Rwanda have already taken advantage of this trend, leveraging aviation as a strategic economic enabler.
Investments in Ethiopian airlines and Addis Ababa Bore International Airport, as well as Rwander and Kigali airports, have transformed these countries into regional hubs, boosting tourism, trade and investment. However, systematic barriers must be addressed to unlock this potential continent-wide.
High Cost: Sustainable Barriers
Africa continues to be one of the most expensive regions in the aviation business. Compared to 25% globally, fuel prices account for 40% of Africa's operating costs are 17% higher than the global average. Taxes, fees and air navigation fees are 12-15% and 10% higher than in other regions, respectively.
Maintenance, insurance and capital costs are also 6-10% higher. These high costs erode airline profitability, inflate fares and price potential travelers. Additionally, blocked funds (promoted to $909 million, or 70% of the global total) are a significant financial burden that limits the airline's ability to reinvest growth.
Structural and policy challenges
Beyond costs, the African aviation sector faces structural and policy hurdles. Protectionist bilateral agreements limit competition, limit route availability and limit fares to keeping high. Only 19% of routes in Africa offer direct flights, forcing passengers to endure longer and more expensive journeys.
The size of a small fleet and limited route network further constrain the ability of African Airlines to achieve an economy of scale.
The African Union's Yamoussoukro decision (YD) and the slow implementation of the Single African Air Transport Market (SAATM) exacerbates these issues and hinders market openness and connectivity.
Visa progress
However, the visa policy shows signs of progress. Four countries, Benin, Gambia, Rwanda and the Seychelles, currently offer visa-free admission to all African citizens, with 28% of intra-African travel scenarios being visa-free and unvisa-free from 20% in 2016.
By 2024, expanding the E-Visa system to 44% of African countries will further promote travel. These developments are important to boost tourism and trade, but broader adoption is required to maximize impact.
Fleet/Supply Chain
The aircraft backlog is over 17,000 (surged from 10,000 to 11,000 previous cases), implying a 14-year wait time. If states withdraw from multilateral agreements, they could exempt aircraft from tariffs, further exacerbating supply chain restrictions and production restrictions.
Supply chain issues have had a major negative impact on airlines. Increased lease costs, increase the average fleet age to 15 years old (from 13 in 2015), reduce by half of 5-6% in 2020, reducing the efficiency of fleet utilization (for example, using larger aircraft than required on some routes).
In 2025, 1,692 aircraft are expected to be delivered. This marks the highest level since 2018, but is almost 26% lower than annual AGO estimates. A further downward revision is possible given that supply chain issues are expected to continue in 2025 and perhaps until the end of the decade.
Engine problems and shortages of spare parts have made the situation worse and have caused record grounds for certain aircraft types.
The number of stored aircraft in less than 10 years is currently above 1,100, accounting for 3.8% of the total fleet, compared to 1.3% between 2015 and 2018. Almost 70% of these grounded aircraft are equipped with PW1000G engines.
Manufacturers continue to disappoint airline customers. All airlines are unhappy with these issues continuing for so long. And the indication that it can take until the end of the decade to fix them is unacceptable.
Oil prices
Oil prices are the main driver of airline profitability. A complex set of factors affecting crude oil prices (including forecasts for economic growth, volume of extraction activity, decarbonization, sanctions, availability of refinement capabilities, and transport occlusion policies) can have a major impact on the airline's financial outlook and create a rapid shift in price volatility.
The last line
Cumulative airline profits reach $36 billion this year, not all darkness and destiny for the continental aviation industry.
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