African carriers post growth despite turbulent times

Sunday January 13 2019

Ethiopian Airlines is flying high in terms of passenger numbers and profitability. PHOTO | MAHEDER HAILESELASSIE TADESE | AFP


African airlines posted an impressive growth in passenger traffic in November 2018, despite a turbulent business environment.

Data from the International Air Transport Association (IATA) shows that African carriers recorded a 5.7 per cent increase in passenger demand, over the same period in 2017.

The performance, however, represented a decline from October, when the industry posted 6.4 per cent growth.

In November, capacity rose by 3.9 per cent and load factor rose 1.2 percentage points to 68.9 per cent.

Passenger traffic growth in Africa is being realised despite the economic challenges facing the continent’s largest economies, Nigeria and South Africa, and the fact that many African carriers are struggling to remain airborne.

Apart from Ethiopian Airlines, which is flying high in terms of passenger numbers and profitability, other carriers are stalling due to challenges like high taxes, airfare and cost of jet fuel, poor airport infrastructure, international competition and unfavourable policies.


Global contribution

This has seen Africa’s contribution to the global aviation sector remain low with the continent currently accounting for only 2.2 per cent of the global airline passenger market.

IATA projects that African carriers will post a $300 million net loss in 2019 (slightly improved from the $400 million net loss in 2018), making Africa the weakest region, as it has been over the past four years.

On the global front, the aviation industry recorded healthy but moderate passenger traffic in November.

Total revenue passenger kilometres (RPKs) rose to 6.2 per cent, from 6.3 per cent in October.

Capacity (available seat kilometres) increased by 6.8 per cent, and load factor dipped 0.4 per cent to 80 per cent. It was the third time in two years that load factor fell on a year-to-year basis.

“Traffic is solid. But there are clear signs that growth is moderating in line with the slowing global economy. We still expect 6 per cent demand growth this year. But trade tensions, protective tariffs and Brexit are all uncertainties that overhang the industry,” said Alexandre de Juniac, IATA’s director-general.

According to IATA, international passenger demand rose by 6.6 per cent in November, up from 6.2 per cent in October.