On Monday, during the margins of the continuing IATA annual general assembly being held in New Delhi, India, the most recent financial forecast for the aviation sector was unveiled.
Although global airlines anticipate a net profit of $36 billion for this year—an increase from $32.4 billion in 2024—African carriers are projected to generate only $200 million combined, translating into a meager net profit margin of 1.1%, which is the lowest across all geographical areas.
In sharp contrast to other areas like North America—which is anticipated to see the largest net earnings at $12.7 billion—and the Middle East—with top-notch profitability per passenger at $27.2—Africa’s aviation market continues to be highly susceptible even though fundamental demand indicators remain robust," stated Willie Walsh, Director General of IATA. "Persistently high operational expenses, limited availability of aircraft, and financial restrictions persistently hamper overall profitability throughout Africa." Worldwide, air carriers anticipate transporting around 4.99 billion travelers in 2025—a milestone figure—noted for achieving an all-time high; combined revenue projections amounting to approximately $979 billion, mainly spurred by a modest uptick in ticket sales by 1.6% alongside steady pricing trends for jet fuel currently estimated at about $86 per barrel, marking a decrease of roughly 13% compared to previous forecasts. Nonetheless, IATA warned against mistaking surface-level prosperity for solid stability: "$36 billion in aggregate means just $7.20 earned individually from each traveler," explained Walsh. "Such slim margins leave little room for error; hence additional levies, regulations, or unforeseen events might swiftly negate these advancements." Even amid slower worldwide economic expansion pegged back to 2.5%, the airline business demonstrates tenacity chiefly attributable to enhancements in productivity, hitting a peak occupancy rate of 84% among flyers, coupled with reduced price pressures stemming from lower inflation rates.
Nevertheless, passenger yields are anticipated to decline by four percent, which will make air travel more accessible—projected average return fares are expected to be around $374, representing a 40% decrease from 2014 levels.
Across Africa, the demand for air travel is anticipated to increase by eight percent in 2025; however, capacity expansion is projected to remain constrained at just 7.3 percent. This limitation stems from issues such as inadequate aircraft fleets, a shortage of spare parts, and restricted access to foreign currencies in crucial markets including Nigeria and Zimbabwe.
African airlines are anticipated to make only $1.3 profit per passenger, significantly lower than the $11.1 per passenger in North America and $8.9 in Europe.
Even with these limitations, IATA identifies potential opportunities. "There is genuine demand," stated Walsh. "However, what lacks is an ecosystem that better supports airlines—ranging from regulatory adjustments to improvements in infrastructure and increased financial flexibility." A number of African airlines are struggling as well, particularly due to planes being out of service because of engine performance problems and a worldwide queue exceeding 17,000 aircraft. This situation has led to the average age of Africa's aviation fleet rising to around 15 years old.
Freight VolumesRegarding cargo shipments, international air freight is anticipated to decelerate considerably in 2025 as a result of protective trade measures. Predictions indicate that cargo earnings will decrease by 4.7% to reach $142 billion, whereas volume expansion is projected to be minimal at only 0.7%, down from the previous year’s robust increase of 11.3%.
In the realm of international air cargo markets, Africa has been a minor participant and is anticipated to be disproportionately affected because of its minimal involvement in worldwide supply networks.
The IATA also expressed worries about the expenses and accessibility of Sustainable Aviation Fuel (SAF), emphasizing how this imposes an unfair strain particularly on airlines from smaller and emerging markets.
In 2025, SAF costs are expected to be around 4.2 times higher than those of conventional jet fuel, with European SAF regulations likely increasing provider prices. This situation puts additional financial strain on African carriers, most of which are already facing economic challenges. As a result, these airlines confront mounting pressures.
Read: Hard choices for African airlines as EU pushes use of biofuelMeanwhile, Corsia (Carbon Offsetting and Reduction Scheme for International Aviation) compliance costs are expected to hit $1 billion globally in 2025, further squeezing margins, particularly for lower-revenue regions like Africa.
The report also highlights significant geopolitical and macroeconomic dangers. These include continuing disputes, trade disagreements, and the disintegration of international aviation norms, according to IATA, which suggests this uncertainty might disrupt the carefully hopeful forecasts.
In the case of Africa, susceptibility to external shocks is heightened due to limited financial reserves and fluctuating policies across multiple markets.
Nevertheless, IATA continues to remain optimistic. "Given the appropriate reforms and investments, African aviation has the potential not just to expand but to flourish," stated Walsh. "However, time is running out." Provided by SyndiGate Media Inc. Syndigate.info ).
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