Despite Robust Passenger Demand, Structural Barriers Keep Continent’s Carriers Among World’s Least Profitable
African airlines are projected to earn just $1.3 in net profit per passenger in 2025—a pittance compared to their global counterparts—underscoring how fragile the continent’s aviation recovery remains even as worldwide carriers ride a wave of post-pandemic travel demand.
According to the latest outlook from the International Air Transport Association (IATA), African carriers are expected to post a collective profit of approximately $200 million in 2025, translating into a net margin barely above 1 percent. That figure represents just 0.5 percent of the $36 billion in global airline profits projected for the same year, revealing the stark disparity between Africa and the rest of the world’s aviation sector.
“Demand for air travel in Africa is rising faster than in many other parts of the world, but profitability is not keeping pace,” said Kamil Al-Awadhi, IATA’s regional vice president for Africa and the Middle East. “With margins of just 1.3 percent, African airlines are capturing only a fraction of aviation’s economic value.”
The contrast with other regions is striking. Middle Eastern carriers—bolstered by their role as global connecting hubs and favorable regulatory environments—are projected to earn $28.90 in net profit per passenger, more than 22 times what African airlines will make. European carriers will average $10.60 per passenger, while North American airlines are expected to earn $9.50. Even Latin American carriers, despite their own challenges, will outperform African peers at $7.30 per passenger.
The disparity extends to net profit margins. While the global airline industry is expected to achieve a 3.6 percent net margin in 2025, African carriers will operate at 1.1 percent—the lowest of any region—leaving virtually no buffer against unexpected shocks. Middle Eastern airlines, by contrast, are projected to achieve a 9.3 percent margin, nearly nine times higher.
The roots of Africa’s aviation crisis run deep, shaped by persistent operational challenges that no single carrier can overcome alone.
High Operating Costs: African airlines face unit costs that average approximately 140 US cents per available tonne-kilometer (ATK), nearly double the global industry average. This cost burden stems from multiple sources: jet fuel is often significantly more expensive on the continent than at global hubs, while airport taxes, statutory charges, and regulatory fees can consume a substantially larger share of operating budgets than in competing regions.
“The into-wing price of jet fuel in Africa remains among the highest globally, adding to already elevated operating costs,” according to IATA’s analysis of regional cost structures. This reflects limited competition in fuel supply chains, high logistics costs, and low purchasing leverage due to smaller volumes.
Aging Fleets: African carriers operate aircraft that are, on average, five years older than the global norm—a gap that continues to widen. Older planes consume more fuel, require more frequent and costly maintenance, and experience longer downtimes. Compounding the problem is the difficulty in sourcing replacement parts, which are not only more expensive in Africa but also subject to extended lead times due to global supply chain constraints.
Fragmented Markets: The continent’s balkanized market structure limits economies of scale. African carriers often operate in smaller, isolated markets with limited traffic volumes and constrained frequencies, forcing them to spread fixed costs—aircraft ownership, crew salaries, overhead—across a much narrower base than their international counterparts. This structural inefficiency means per-unit costs remain stubbornly high.
Tax Burden: Africa’s average corporate income tax rate of 28 percent—the highest among all regions—further erodes profitability and limits carriers’ ability to reinvest in fleet renewal or operational improvements.
Currency and Financing Challenges: Foreign exchange shortages in several African economies restrict airlines’ ability to access hard currency for aircraft leasing, fuel purchases, and maintenance contracts, while also hampering their capacity to invest in digital systems and other efficiency-enhancing technologies.
Demand Growth Cannot Offset Structural Barriers
Paradoxically, African aviation is among the world’s fastest-growing segments. The continent is expected to see passenger numbers expand 6.0 percent in 2025—faster than the global average—driven by rising middle-class populations, improved visa accessibility, and growing intra-African business travel. Over the next 20 years, Africa’s aviation market is forecast to grow at 4.1 percent annually, reaching 411 million passengers and capturing the third-fastest growth rate globally.
Yet this traffic expansion is not translating into profitability. “Despite above-average demand, the financial outlook remains challenging,” IATA noted in its regional assessment. The problem is that African airlines lack the pricing power to capitalize on growth. Low GDP per capita across much of the continent makes air travel highly price-sensitive, constraining airlines’ ability to raise fares even as costs mount. Visa restrictions, restrictive bilateral agreements, and high passenger charges further dampen demand elasticity.
The result is a vicious cycle: airlines must accept lower yields to fill seats, which, combined with high operating costs, leaves insufficient margin for investment and resilience.
Investment and Modernization at Risk
The profitability crisis threatens the continent’s aviation future. With margins of just 1 percent, African carriers have minimal resources to invest in new aircraft, digital infrastructure, and sustainability measures that are reshaping global aviation.
This poses a structural challenge. Globally, airlines are transitioning to newer, more fuel-efficient aircraft and implementing advanced systems to boost productivity and cut emissions. African carriers, constrained by weak balance sheets and limited access to capital, risk falling further behind, reinforcing dependence on foreign carriers to connect African economies and tourists to international markets.
“Without stronger balance sheets, the continent risks falling further behind,” the IATA assessment warned, highlighting that the gap between African and global airline profitability threatens to widen if structural barriers remain unaddressed.
Industry leaders and policymakers have identified potential remedies, though implementation remains uneven.
Reducing Cost Burdens: IATA and regional aviation bodies are urging African governments to rationalize taxes and charges on airlines and passengers. Streamlining regulatory processes and reducing airport fees could significantly lower operating costs, improving margins without requiring carriers to cut service or accept reduced demand.
Market Liberalization: The Single African Air Transport Market (SAATM)—a flagship initiative of the African Union Agenda 2063—offers a pathway to unlock new routes, stimulate competition, and enable airlines to achieve greater scale. According to IATA, if just 12 key African countries fully opened their markets and increased connectivity, an additional 155,000 jobs and $1.3 billion in annual GDP would be created. Full SAATM implementation could reduce costs and enable carriers to operate more efficiently by connecting fragmented markets into a unified air transport space.
Consolidation and Strategic Partnerships: Industry leaders stress that African carriers need stronger corporate governance, strategic partnerships, and potential consolidation to build resilient, commercially viable networks capable of competing globally.
Infrastructure Investment: Improving airport infrastructure, air traffic control systems, and ground handling services would reduce operational delays, fuel waste, and maintenance issues, helping to lower unit costs.
While the outlook for 2026 shows modest improvement—African carriers are projected to earn $1.3 per passenger (unchanged from 2025 projections) with a 1.0 percent margin—the trajectory underscores that incremental gains are insufficient.
“Demand for air travel in Africa is rising faster than in many other parts of the world, but profitability is not keeping pace,” Al-Awadhi reiterated. “Addressing the barriers that constrain growth is essential to ensure the region’s traffic expansion also delivers financial strength.”
The case is clear: African aviation has enormous potential, with traffic growing faster than many developed regions and populations increasingly eager to travel. But realizing that potential requires urgent action on the structural barriers that keep the continent’s carriers among the world’s least profitable. Without decisive policy reforms—liberalization, cost reduction, infrastructure investment, and strategic consolidation—African airlines will continue to struggle, unable to fund the modernization and resilience their economies desperately need.
