African airlines are projected to generate a modest net profit of $72 million in 2025, representing just 0.2 percent of the world’s total air transport profit, according to the latest industry forecasts from the International Air Transport Association (IATA). This profit translates to an average of $1.3 in net profit per passenger—the lowest among all global regions.

While the global airline industry is expected to reach record revenues of over $1 trillion and net profits of $36 billion, Africa’s share remains limited. The continent’s carriers face persistent challenges, including high operational costs, heavy statutory taxes and charges, infrastructure gaps, and a chronic shortage of foreign currency in several economies. These factors continue to constrain growth, despite an expected 8 percent rise in passenger demand for African airlines in 2025.

“Africa’s carriers face high operational costs and a low propensity for air travel expenditure in many of their home markets. A shortage of aircraft and spare parts is dampening growth in the region. The shortage of foreign currency in some economies, particularly US dollars, is adding to the region’s challenges. Despite these challenges, there is sustained demand for air travel in Africa.”

Globally, the average net profit per passenger is forecast at $7, making Africa’s $1 per passenger profit a stark contrast to more profitable regions such as North America and the Middle East. The collective net profit margin for African airlines is expected to be the weakest globally at 1.1 percent.

Despite these hurdles, the sustained demand for air travel in Africa and incremental improvements in profitability signal cautious optimism for the region’s aviation sector. However, the gap between Africa and other world regions highlights the urgent need for structural reforms and investment to unlock the continent’s full aviation potential.

As Ethiopia seeks to expand its exports of clothing, fruits, and vegetables, the country is encountering significant challenges in the European Union’s fast-paced and highly competitive “fast fashion” market. Despite recent infrastructure investments and a track record of success in the U.S. market, logistics bottlenecks and supply chain inefficiencies are hampering Ethiopia’s ability to meet the EU’s demanding seasonal cycles and rapid turnaround requirements.

These issues took center stage at the National Logistics Conference, organized by the Ethiopia Freight Forwarders & Shipping Agents Association (EFFSAA) in partnership with Bahir Dar University. Industry experts and stakeholders gathered to discuss solutions for the country’s logistics sector, which is increasingly seen as the linchpin for Ethiopia’s export ambitions.

Matthew Crighton, Head of Trade & Investment at the international consultancy Triple Line, highlighted the stark differences between the U.S. and EU apparel markets. “The EU market for apparel is really different, it’s more fast-fashioned and trendy. The EU has four seasons, with buyers prioritizing fashion for each season. As buyers prioritize quick response and flexibility, suppliers need these to be done quickly,” Crighton explained.

Ethiopia’s current export model, however, is struggling to keep pace. Sourcing inputs from Asia can take 10–20 days, and garment production requires another 20 days. Shipping times to Europe, once around 25 days, have ballooned to more than 40 days due to disruptions in the Red Sea. This extended timeline makes it difficult for Ethiopian exporters to respond to the EU’s fast-changing fashion cycles and stringent delivery schedules.

While Ethiopia has made strides in infrastructure and attracted major international buyers such as Decathlon and Monoprix, its export growth in the apparel sector lags behind global competitors. Bangladesh, for example, has grown its apparel exports from $26 million to $40 billion, and Vietnam from $21 million to $30 billion over the same period. Even smaller economies like Cambodia and neighboring Kenya have seen significant gains, with Cambodia’s exports reaching $8 billion and Kenya tripling its clothing exports.

Industry insiders acknowledge that Ethiopia’s logistics remain a major bottleneck. “Although we have made progress, we have invested heavily into our critical infrastructure developments, and Ethiopia is still at a low level,” Crighton noted. Companies operating in Ethiopia report that the long-awaited rapid growth in apparel exports has been stymied by persistent logistics challenges.

To compete in the EU market, Ethiopia must urgently improve logistics efficiency. Crighton advocated for a shift toward “barrierless logistics,” where goods move seamlessly from production centers to borders without unnecessary delays. He called for solutions tailored to future needs, such as implementing “no-stop orders” instead of the current “one-stop” approach, which still introduces friction and slows down the supply chain.

Beyond apparel, Ethiopia is also targeting the EU, Middle Eastern, and Far Eastern markets for its horticultural products, including avocados, mangoes, bananas, and pineapples. However, the lack of a strong cold chain infrastructure remains a critical gap. Air freight is often too expensive for most fruits and vegetables, and while demand for sea freight is rising—especially for flowers seeking to reduce CO2 emissions—there is no integrated cold chain from rural production centers to ports.

This results in significant post-harvest losses, with up to 50% of horticultural products lost due to inadequate refrigeration and connectivity. The shortage of refrigerated trucks and the absence of links from rural transformation centers to cold ports further exacerbate the problem.

Crighton emphasized that the private sector will be the main driver of Ethiopia’s logistical transformation. “The real driver of innovation, the real driver of Ethiopia’s logistical transformation, will be the private sector,” he said. He urged rapid reforms to create a competitive logistics market, ensuring a level playing field for public and private, domestic and foreign companies. Expanding port options beyond Djibouti was also highlighted as crucial for fostering competition among service providers.

Ethiopian Shipping and Logistics (ESL) has announced its readiness with sustainable and competitive IT technology on a global scale. Timely financial reporting is a crucial factor for its forthcoming participation in the capital market, and the company aims to complete its Oracle Transportation Management (OTM) implementation by the end of the year.

Over the past eight years, the state-owned logistics giant has been committed to adopting advanced technologies to enhance its global competitiveness and operational efficiency. ESL has successfully implemented Oracle’s cutting-edge Enterprise Resource Planning (ERP) system, a globally recognized back-office solution that has significantly improved all areas of its operations.

Abera Diriba, Director of the Information Communication Technology (ICT) Department at ESL, explained that various modules of the ERP system, which integrates and automates business processes to enhance efficiency and decision-making, have been gradually installed since 2019.

“We chose Oracle’s back-office system, one of the leading global solutions, because it encompasses all departments, including finance, human resources, procurement, and asset management,” Abera stated.

Since the ERP system went live, all ESL branches—including its office in Djibouti, eight dry ports, global agents, and vessels—are now seamlessly connected to the headquarters in Addis Ababa.

The system effectively manages procurement processes from planning to delivery, as well as human resource administration.

“One of the key successes since the ERP implementation is that ESL can now efficiently maintain its financial records,” Abera remarked. “We have eliminated past inefficiencies and resolved all financial report backlogs.”

With the new technology, the company can generate financial reports for any timeframe. “We are currently preparing an interim report for the first half of this budget year, which was previously impossible,” he added.

The robust financial reporting system will also support ESL’s participation in the upcoming securities exchange. Additionally, the ERP system has reduced operational redundancies by streamlining workflows.

Abera, an ICT specialist with extensive experience in various public institutions, emphasized that logistics depend heavily on the seamless flow of information from loading ports to customers’ destinations.

“With a centralized, state-of-the-art IT system managing workflows, efficiency has markedly improved, directly enhancing customer satisfaction,” he stated.

However, he acknowledged the vital role of local stakeholders and port operators in ensuring effective service delivery.

ESL now provides faster customer service, allowing clients to track cargo movements in real time. The new system also streamlines customs payments, reducing delays and unnecessary costs like demurrage.

“Ethiopia is unique in having a shipping company that operates vessels without a seaport,” Abera noted. “With this technology, ESL is now globally competitive.”

The scalability of the ERP system ensures its adaptability to future technological advancements, including AI and Redwood. Since 2019, 38 ERP modules have been implemented.

OTM System to Revolutionize Logistics Operations

As part of its logistics enhancement initiative, ESL is implementing the Oracle Transportation Management (OTM) system to optimize shipping, inland transport, freight forwarding, and related documentation. Launched in October 2024, the OTM project is expected to be fully operational by November 2025.

“For years, ESL relied on Sealiner, an outdated container tracking and logistics management system, which is now being replaced with modern technology,” Abera explained.

Given ESL’s collaborations with international agents, shipping companies, and other stakeholders, it is essential to adopt globally compatible systems. “For example, we operate slot leases with other shipping lines, so our systems must align with theirs,” he added.

The OTM system will enhance inland fleet management by enabling real-time truck monitoring, dispatch coordination, and maintenance scheduling.

Customers will also benefit from online services, including quotations, invoicing, and a more comprehensive website featuring branch operations and complaint handling.

In line with the government’s digital strategy, ESL plans to introduce paperless office automation soon.

“OTM is widely used by global companies due to its scalability,” Abera noted. While technology requires significant investment, it is indispensable in today’s digital era.

“IT used to be a support function, but now it is a governance priority, receiving strong leadership attention at ESL,” he said. “As a global player, we must stay competitive by adopting the latest trends—otherwise, our future would be uncertain.”

With over 600 vehicles and 10 ships, ESL is now the only operator of commercial deep-sea vessels on the continent. It recently completed a 750 million birr investment in the purchase of 100 heavy-duty 6×4 truck tractors.

The British International Freight Association (BIFA) has established a partnership with its Ethiopian counterpart, the Ethiopian Freight Forwarders and Shipping Agents Association (EFFSAA), to attract investors to Ethiopia and enhance collaboration in the logistics sector.

On Tuesday, May 27, BIFA and EFFSAA formalized a Memorandum of Understanding (MoU) aimed at facilitating knowledge and experience sharing.

Dawit Woubishet, President of EFFSAA and Chairperson of FIATA’s Air Freight Institute, described the agreement as a significant step towards transformative collaboration in Ethiopia’s freight and logistics industry.

Steve Parker, Director General of BIFA, expressed enthusiasm about the partnership, stating, “This agreement will not only benefit Ethiopia but also enrich our work in the UK, as it represents a two-way exchange.”

Regarding investment promotion, Parker confirmed BIFA’s commitment to supporting Ethiopia’s initiatives. “We will inform the UK’s Department of Business and Trade about this collaboration, allowing them to communicate the news to trading companies,” he explained. “We will also notify our 1,600+ members, encouraging them to explore business opportunities in Ethiopia.”

Dawit emphasized the MoU as a significant breakthrough for Ethiopia’s logistics sector. “We have recently signed similar agreements with organizations in the UAE and Turkey, expanding our global partnerships and knowledge-sharing in logistics,” he stated.

He noted that the agreement with BIFA presents a major opportunity not only for EFFSAA and its members but for Ethiopia as a whole. “BIFA’s leadership and members bring extensive experience that will help develop Ethiopia’s logistics sector while attracting potential investors,” Dawit added.

At the signing ceremony in Addis Ababa, Dan Hart, Lead Private Sector Development Advisor at the British Embassy in Ethiopia, acknowledged the challenges facing Ethiopia’s logistics sector. He highlighted the need for diversified port access to strengthen logistics operations and affirmed the UK government’s support for Ethiopia’s efforts to secure alternative sea routes.

Worku Lemma, Director of the Logistics Transformation Office at Ethiopia’s Ministry of Transport and Logistics, reiterated the necessity for expanded regional port access to support the economic growth of Ethiopia, which has a population of over 130 million.

This partnership represents a strong commitment to enhancing Ethiopia’s logistics capabilities while fostering international investment and collaboration.