While the global aviation picture is one of enhanced profitability, the picture in Africa reflects the current environment of robust demand against high operating costs, including many statutory air transport taxes and fees, relatively weak economies and low foreign exchange reserves.
International airlines
According to IATA’s financial forecast for the global airline industry in 2025, international net profit is expected to reach US$36.6 billion (R647.8 billion) in 2025, against a net profit margin of 3.6% is from the $31.5bn (R562.2bn) expected net profit in 2024 and 3.3% of net profit margin.
Global airline average net profit per passenger is expected to be $7.0 (R125), down from a high of $7.9 (R140) in 2023, but an improvement to $6.4 (R114) in 2024.
Passenger demand (RPKs) is expected to grow by 8.0% in 2025, outstripping the expected capacity expansion (ATK) of 7.1%.
African airlines
IATA expects African carriers to achieve net profit of $200m (R3.6bn) in 2025, against a net profit margin of 0.9%.While the collective net profit margin of African airlines is expected to be the weakest internationally, this a slight improvement to net profit of $100m (R1.8bn) in 2024 and Compared to a net profit margin of 0.8 percent.
In addition, 2025 profit per passenger forecasts exceed 2024 forecasts by $0.1 (R1.8) to a net profit per passenger of $1.0 (R18).
Africa’s passenger demand is in line with international trends as it is expected to grow by 8%, while capacity is forecast to beat international expectations and grow by 7.7%.
African carriers face unique challenges, including a shortage of US dollars in some economies, which, along with infrastructure and connectivity challenges, hinders the expansion and operations of the airline industry. which will improve the region’s profitability, the report said.
Stormy skies ahead
The report found that airlines are facing increasing costs, a complex environment and supply chain challenges as profitability strengthens.
Key cost drivers include wage pressures and one-time costs from labor strikes and maintaining an aging global fleet.
Factors that could affect the aviation industry include the spread of global conflict in the Middle East and Eastern Europe, potential tariffs and trade wars by the Trump administration, and the mercurial state of oil and fuel prices.
IATA reports that severe supply chain problems will continue until 2025, driving up costs and hampering growth.The average age of the global fleet has reached a record 14.8 years. Although the 2025 aircraft supply forecast is expected to exceed the 2024 level, it is still below the 2018 level.
“Supply chain issues are a triple whammy for every airline’s revenue, costs and environmental performance. Load factors are at record highs, and there’s no doubt that if we had more planes, they could be deployed profitably, so our revenues are at risk Over time, the aging fleet used by airlines has higher maintenance costs, burns more fuel and takes more capital to keep flying. for,” he says. Willie WalshDirector General of IATA.
“And on top of this, leasing rates have risen more than interest rates as competition between airlines has intensified the scramble to find every possible way to expand capacity. This is a time when airlines need to repair their damaged post-pandemic balance sheets, but progress.” is effectively limited to the supply chain issues that manufacturers need to address.”