According to Kamil Alawadhi, the regional vice president for Africa and the Middle East at the International Air Transport Association (IATA), Africa's aviation industry exhibits significant growth potential, with an expected increase in passenger numbers and industry revenue. However, it faces critical hurdles, notably the prevalence of blocked airline funds and high operational costs, which hinder industry development.
Alawadhi reported that worldwide, blocked airline funds amount to $1.2 billion, with Africa accounting for approximately 79% of this total—around $954 million. Algeria has recently topped the list for blocked funds, holding $307 million, prompting calls from IATA for the government to simplify bureaucratic processes. Additionally, regional challenges related to currency restrictions remain a key issue, affecting airlines' ability to repatriate revenues and maintain operational liquidity.
Operational Challenges and Costs in Africa
The sector's struggles are compounded by high operational expenses, with fuel costs 17% above the global average and taxes, fees, and charges significantly higher than in other regions. Aircraft older than the global average, which leads to increased fuel consumption and maintenance, alongside supply chain disruptions, further burden African airlines.
Limited market access, infrastructure issues, and restrictive bilateral agreements restrict competition, resulting in high airfares and lower intra-African connectivity, with only 19% of routes offering direct flights. Despite these hurdles, recent initiatives such as visa liberalization and the implementation of e-visa systems signal positive trends towards improving accessibility and regional integration.
“Africa’s aviation sector is poised for growth, with forecasts indicating a 6% increase in 2026 and reaching 149 million passengers,” said Alawadhi. “Addressing the issues of blocked funds, high costs, and connectivity is crucial to unlocking this potential.”
The industry is also exploring sustainable growth avenues, with Africa being a prime candidate for sustainable aviation fuel (SAF) development. Several countries, including South Africa, Uganda, Egypt, Kenya, and Ethiopia, have conducted feasibility studies or entered agreements to produce SAF, aiming to reduce carbon emissions and bolster environmental sustainability.
Despite the pandemic-related setbacks, African aviation is expected to grow at an annual rate of 4.1% over the next 20 years, presenting substantial opportunities for economic development and job creation across the continent.
