African airlines expect better gains in operating profits in 2025, demand rises seen

Nairobi, Kenya (PANA) - Demand for air travel in Africa is focused to increase in 2025 as airlines increase seats available on their routes, the International Air Transport Association (AITA) has said in its industry outlook.

The African carriers face high operational costs and a low propensity for air travel expenditure in many of their home markets.

A significant issue is a shortage of US dollars in some economies which, along with infrastructure and connectivity challenges, hinder the airline industry’s expansion and performance. 

Despite these obstacles, there is sustained demand for air travel, which is expected to improve the region’s profitability marginally in 2025.

IATA announced its financial outlook for the global airline industry in 2025, which shows a slight strengthening of profitability amid ongoing cost and supply chain challenges.

While the global picture is one of strengthened profitability and a 3.6% net profit margin, the picture in Africa reflects the current environment of sustained demand against high operational costs – including many statutory taxes and charges on air transport –  relatively weak economies and low foreign exchange reserves.   

IATA expects African carriers will achieve a US$0.2bn profit in 2025 with a net US$1.00 profit per passenger.

All regions of the world are expected to show improved financial performance in 2025 as compared to 2024, and all regions are expected to deliver a collective net profit in both 2024 and 2025. 

Profitability, however, varies widely by carrier and by region. 

For example, the collective net profit margin of African airlines is expected to be the weakest at 0.9% while carriers in the Middle East are most likely to be the strongest at 8.2%.

However, demand for air travel is expected to increase in Africa in 2025 by 8% compared to the 7.7% in 2024.

Net profits are expected to be US$36.6 billion in 2025 for a 3.6% net profit margin for the worldwide aviation industry. 

-0- PANA AO/MA 11Dec2024