African carriers suffered cumulative losses of about $3.5 billion (about N1.625 trillion) over the past three years, a deficit that’s set to persist as restrictive fuel costs and taxes weigh on carriers.
The International Air Transport Association (IATA) revealed this in an email on Wednesday, according to a Bloomberg report.
Daily Trust recently carried the IATA monthly passenger traffic report for February showing that African airlines’ traffic rose 90.7 per cent in February 2023 versus a year ago while February capacity was up 61.7 per cent and load factor climbed 11.4 percentage points to 75.0 per cent.
Domestic traffic for February rose 25.2 per cent compared to the year-ago period. Total February 2023 domestic traffic was at 97.2 per cent of the February 2019 level.
However, the Bloomberg report stated that the gains could have been eroded by high cost of fuel and taxes, adding that the aviation industry in Africa last made money in 2010, according to data from IATA, with another loss of $213 million anticipated this year. High costs of aviation fuel and energy, elevated charges, statutory taxes and levies and regulatory barriers are inhibiting African carriers’ return to profitability.
The continent accounts for just 2.1% of air transport activity despite being home to about 18% of the world population. Air travel in Africa is only expected to fully recover from the COVID-19 pandemic in 2024.