The airline industry in Africa is expected to generate $200m net profit in 2025, an increase from an estimated $0.1 billion in 2024, according to the latest report by the International Air Transport Association (IATA).
The industry will make $1 in net profit per passenger from $0.9 in 2024, while demand for 2025, measured in revenue passenger kilometers (RPK), is expected to grow by 8 per cent, IATA indicated.
However, Africa's carriers face high operational costs and a low propensity for air travel expenditure in many of their home markets. A significant issue is a shortage of US dollars in some economies which, along with infrastructure and connectivity challenges hinder the airline industry's expansion and performance.
The projected growth in the region is consistent with the global outlook. Globally, the industry is expected to rake in more than $1 trillion total revenues, an increase of 4.4 per cent from 2024.
However, the expenses are also estimated to grow by 4 per cent to $940 billion.
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"We're expecting airlines to deliver a global profit of $36.6 billion in 2025. This will be hard-earned as airlines take advantage of lower oil prices while keeping load factors above 83 per cent, tightly controlling costs, investing in decarbonization, and managing the return to more normal growth levels following the extraordinary pandemic recovery," said Willie Walsh, IATA's Director General.
"All these efforts will help to mitigate several drags on profitability which are outside of airlines' control, namely persistent supply chain challenges, infrastructure deficiencies, onerous regulation, and a rising tax burden," he added.
Walsh said that the margins remain thin as airlines continue to watch every cost and insist on similar efficiency across the supply chain, given that there is monopoly over infrastructure supply.
"Looking at 2025, for the first time, traveler numbers will exceed five billion and the number of flights will reach 40 million. This growth means that aviation connectivity will be creating and supporting jobs across the global economy."
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Hospitality and retail sectors are expected to benefit from the growing number of airline passengers as connectivity increases.
IATA highlighted that airline employment is expected to grow to 3.3 million in 2025. Airlines are the core of a global aviation value chain that employs 86.5 million people and generates $4.1 trillion in economic impact, accounting for 3.9 per cent of global GDP, as of 2023.
