High Costs, FX Constraints Limit Growth Of African Airlines, Says IATA

The International Air Transport Association (IATA) has projected that global airlines will collectively earn a net profit of $36bn in 2025, up from $32.4bn in 2024.

However, African carriers are expected to contribute a marginal $200m, just 0.6 per cent of the total, highlighting the persistent challenges facing the continent’s aviation industry.

According to IATA’s 2025 Airline Industry Financial Outlook seen by THE WHISTLER, Africa’s airline sector will post a net profit margin of just 1.1 per cent, the lowest among all global regions.

The report attributed the underperformance to a combination of high operational costs, restricted access to aircraft and spare parts, and severe foreign exchange (FX) constraints in several African countries.

“Africa’s carriers face high operational costs and a low propensity for air travel expenditure in many of their home markets. A shortage of aircraft and spare parts is dampening growth in the region,” the report stated.

Despite these constraints, demand for air travel across the continent has remained robust. However, IATA noted that structural and financial barriers continue to stifle the sector’s full recovery and potential for growth.

Globally, the airline industry is forecasted to achieve a net profit margin of 3.7 per cent in 2025, up slightly from 3.4 per cent in 2024. Total operating profits are projected to rise to $66bn in 2025 from $61.9bn in the previous year.

This performance, IATA says, is supported by declining fuel prices—jet fuel is expected to drop by 13 per cent alongside increases in both passenger and cargo volumes.

Passenger numbers worldwide are anticipated to reach a record 4.99 billion in 2025, a four per cent increase over 2024. However, this is still below IATA’s earlier forecast of 5.22 billion passengers. Similarly, global air cargo volumes are expected to grow modestly to 69 million tonnes.

Total industry revenues are projected to hit an all-time high of $979bn in 2025, a 1.3 per cent increase on 2024 levels. This figure, however, falls short of the $1trn benchmark forecast in December 2024.

Commenting on the outlook, IATA’s Director General, Willie Walsh, emphasized the resilience of the global aviation sector in the face of ongoing geopolitical and economic uncertainties.

“Airlines are demonstrating their ability to navigate difficult operating environments by improving margins and flying more people and goods. The industry is making solid progress, though some regions like Africa still face disproportionate challenges,” Walsh noted.

High Costs, FX Constraints Limit Growth Of African Airlines, Says IATA is first published on The Whistler Newspaper