Africa’s airlines to post lowest global profits in 2025 – IATA
African airlines are likely to make just $1.30 in profit per passenger, much less than the $11.10 (Sh1,433) in North America and $8.90 (Sh1,149) in Europe.
A new report by the International Air Transport Association (IATA) has revealed that African airlines will register the least amount of net profits in 2025, pointing to an industry that is plagued by structural and operating challenges.
According to the latest financial outlook by IATA, African airlines are expected to collectively record $200 million (approx. Sh25.8 billion) in profits this year, representing a 1.1 per cent gain from the figures reported a year earlier, the lowest among all regions surveyed.
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On the other hand, the report, released on Monday on the sidelines of the ongoing IATA annual general meeting in New Delhi, India, indicates that global airlines are expected to record net profits of $36 billion (Sh4.6 trillion) this year, up from $32.4 billion (Sh4.2 trillion) in 2024
Compared to other regions, North America is expected to have the highest total profits at $12.7 billion (Sh1.6 trillion), while the Middle East will have the highest profit per passenger, totalling $27.2 billion (Sh3.5 trillion).
"Africa's aviation sector remains one of the most vulnerable despite strong demand fundamentals. High operating costs, aircraft shortages, and currency constraints continue to drag down profitability across the continent," said IATA director-general Willie Walsh.
Additionally, the IATA report states that globally, a record 4.99 billion passengers will use air travel in 2025, with total industry revenues projected to hit $979 billion (Sh126.4 trillion). This has been attributed to a 1.6% growth in passenger revenues and steady jet fuel prices, which are now expected to be $86 (Sh11,103) per barrel, 13% lower than last year.
"The biggest positive driver is the price of jet fuel, which has fallen 13% compared with 2024 and 1% below previous estimates," said Walsh.
Air travel demand in Africa is projected to rise by 8 per cent in 2025, but the increase in available flights will be slower, at only 7.3 per cent, because of challenges such as a shortage of aircraft, limited spare parts and difficulties accessing foreign currency in important markets like Nigeria and Zimbabwe.
African airlines are likely to make just $1.30 in profit per passenger, much less than the $11.10 (Sh1,433) in North America and $8.90 (Sh1,149) in Europe.
Cargo revenues are also expected to be $142 billion (Sh18.3 trillion) in 2025, a 4.7% decrease from 2024. This is primarily based on the expected impact of reduced GDP growth, largely influenced by trade-dampening protectionist measures, including tariffs.
As a result, air cargo growth is expected to slow to 0.7% in 2025 from 11.3% in 2024. The cargo yield is also expected to reduce by 5.2%, reflecting a combination of slower demand growth and lower oil prices.
In 2025, around 1,692 new aircraft are expected to be delivered, marking the highest number since 2018. However, this figure is still nearly 26% lower than earlier predictions and may decrease further due to ongoing supply chain challenges.
The global aircraft backlog has surged to over 17,000 planes, causing wait times of up to 14 years. Issues such as engine problems, a shortage of spare parts, and potential new tariffs on aircraft imports are worsening delays.
"Manufacturers continue to let their airline customers down. Every airline is frustrated that these problems have persisted so long. And indications that it could take until the end of the decade to fix them are off-the-chart unacceptable!" said Walsh.
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