IATA Bemoans High Airlines’ Operating Costs in Africa
The International Air Transport Association (IATA) has expressed concern over the high operating costs of airlines in Africa.
IATA Regional Vice President Kamil Al-Awadhi revealed this through a document presented at the ongoing 81st IATA Annual General Meeting in New Delhi, India.
The document revealed that African airlines spent an additional 17 per cent on fueling, 12-15 per cent on taxes and fees, 10 per cent more on air navigation charges, 6-10 per cent of their revenues on maintenance, insurance, and cost of capital.
The document partly read, “It’s expensive to do business in Africa. African airlines face unique cost challenges, particularly high operational costs, which are significantly higher than the global average.
“A few examples like fuel prices, 17 per cent higher than the global average, accounting for 40 per cent of operating costs in Africa, compared to 25 per cent globally (2024 data).
“For taxes, fees & charges: 12-15 per cent higher than in other regions. Also, Air Navigation Charges are 10 per cent higher in Africa, while maintenance, insurance, and cost of capital are 6-10 per cent more expensive.”
However, the IATA official stated that Africa’s air transport potential is held back by various barriers. He emphasised that Africa accounts for just 2–3 per cent of global air traffic, despite a growing population and economy of 175m passengers projected in 2024.
He added that the continent is also challenged with weak regional links, stressing that 80 per cent of flights emanating from the continent are international, while only 20 per cent serve intra-African routes, limiting regional integration and economic development.
“Also, over 75 per cent of international passengers fly on non-African carriers, showing the urgent need to strengthen local airline competitiveness,” he added.
Amidst the unpalatable development, the IATA executive also revealed that at least $1.28bn of airline funds are still trapped globally, with 85 per cent of such funds blocked in Africa and Middle East countries as of April 2025.
Statistics from IATA indicated that the $1.28bn was down from $1.7bn in October 2024. IATA mentioned that 29 AME countries blocked funds with five of such as top debtors. It stated that as of October 2024, AME countries held $1.1bn of airlines’ blocked funds.
According to the document, the countries include Mozambique, $205m; Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea and Gabon (XAF Zone), $191m; Algeria, $178m, Lebanon, $142m, and Angola with $84m.
However, Nigeria is no longer on the list of indebted nations as the country cleared its backlog in 2024. Reacting to the development, the Managing Director of Aero Contractors, Capt Ado Sanusi, agreed with the IATA report, saying the extreme burden of taxation was responsible for the woes of airlines in Africa and particularly in Nigeria.
He added that unless a deliberate effort is made toward addressing multiple taxation in the country, efforts made by the authority to develop the industry will continually fall on infertile ground.
“The taxes are high, especially in Nigeria, compared to other parts of the world. We cannot tax or use the airlines to fund the parastatals, or as a source of revenue to federal coffers. It can’t just work.
“Many things add to the cost of operation in this part of the world. If we really want to be serious and want to achieve the development that we are all pursuing, there must be a deliberate attempt to address the issue of taxation for airlines.”
SOURCE: The PUNCH
