Airlines to return to profitability by end 2024 (IATA)
The world's airlines lost USD 42 billion last year. According to the International Air Transport Association (IATA), the bleeding should ease this year and the first green lights are expected from the next fiscal year.
The African airline industry is expected to return to profitability by the end of 2024 (compared to 2023 globally). This was stated by the International Air Transport Association (IATA) Regional Vice President for Africa and the Middle East, Kamil Alwadhi, when he addressed the Aviation Africa forum on Monday 12 September 2022.
In July 2022, passenger traffic in Africa was at 73.8% of its July 2019 level (global demand was at 74.6% of pre-VIOC levels). In detail, capacity was at 93.4% in East Africa, 93.1% in North Africa, 63.5% in Southern Africa (mainly due to the suspension of South African Airways flights, and their reduction by over 80%) and +8.7% in West Africa.
However, this optimistic projection could be dampened by several factors. The first is the steep rise in fuel prices. Since the beginning of the year, jet fuel prices have averaged USD 143 per barrel. This means that airlines will spend $133 billion more on fuel in 2022 than they did last year.
The second obstacle is the blockage of airline revenues on the continent. At the end of June, more than $1.3 billion in carrier funds were trapped in 12 African countries. Nigeria recently released $265 million of the $464 million it owed as of July 2022.
"We urge other countries blocking the funds to follow Nigeria's example, and accelerate the full release of all airline revenues they are currently withholding," Alwadhi said.
The last fact that may slow down the recovery of air transport in Africa is the delay in the implementation of the African Continental Free Trade Area, and its pillars, namely the protocol on the free movement of people, the African Single Passport and the Single African Air Transport Market (SAATM).
"For the African Continental Free Trade Area and SAATM to realise their full potential, they must be fully implemented. This requires greater collaboration between governments, who must deliver on their commitments," warns IATA's regional vice-president for Africa and the Middle East. Currently, inter-African connectivity is weaker than that between Africa and Europe.
