African carriers are heading into 2026 with profitability still stuck at the lower end of the global industry spectrum, as structural pressures that have long constrained the continent’s aviation sector show little sign of easing.

The latest financial outlook from the International Air Transport Association (Iata), released on December 9, projects another year of modest gains for African airlines despite stronger traffic growth than the global average.

The outlook, released on the sidelines of Iata Global Media Day in Geneva, highlights a widening performance gap between Africa and the rest of the world, driven by entrenched structural constraints – fragmented markets and policy frameworks as well as fuel that costs 20 percent more than elsewhere- that continue to weigh heavily on the continent’s aviation prospects.

African airlines are expected to earn a net profit of $200 million in 2025, representing a 1.1 percent margin—the lowest of any region.

Profit per passenger is forecast at $1.40, a fraction of the global average of $7.90.

The outlook for 2026 shows little change; profits remain at $200 million, while margins slip slightly to 1 percent, with profit per passenger easing to $1.30.

Passenger traffic is projected to grow by 6 percent, outpacing the global forecast of 4.4 percent, but capacity is expected to rise by only 5.7 percent.

According to Iata, African carriers continue to face the highest operating costs in the world, with average cost per available tonne-kilometre, nearly double the global average.

A combination of high fuel prices, older fleets, fragmented markets, and taxes averaging 28 percent — the highest globally — continues to limit their resilience.

Demand is further restricted by visa challenges, restrictive bilateral agreements, and high passenger charges, keeping travel highly price-sensitive across much of the continent.

Net marginGlobally, airlines are projected to generate $1.008 trillion in revenue in 2025, increasing to $1.053 trillion in 2026.

Net profit for 2025 is estimated at $39.5 billion, rising slightly to $41 billion again in 2026—a record figure, though still representing a modest 3.9 percent net margin.

Iata director-general Willie Walsh noted that while stability is welcome, profitability remains thin relative to the industry’s economic importance and capital intensity.“Airlines are expected to generate a 3.9 percent net margin and a $41 billion profit in 2026. That’s extremely welcome news considering the headwinds the industry faces,” Walsh said, pointing to supply chain bottlenecks, geopolitical volatility, rising regulatory burdens and infrastructure constraints.

Despite improved margins, the industry will still fall short of covering its cost of capital in 2026, with return on invested capital at 6.8 percent versus a weighted average cost of capital of 8.2 percent.

Air cargo continues to be a bright spot, defying earlier predictions of decline. Shipments tied to e-commerce and semiconductor manufacturing — fuelled by demand for AI-related technologies — have supported steady performance.

The sector has also benefited from early shipments ahead of US tariff deadlines, as well as re-routing of goods to new markets.

Supply chain issues are slowing fleet renewals, pushing the average global aircraft age above 15 years—the oldest on record.

Sustainable Aviation Fuel (SAF) costs are also climbing, with incremental expenses projected to hit $4.5 billion in 2026 as airlines increase compliance with global emissions reduction schemes.

For Africa, the Iata outlook underlines a long-standing dilemma. Traffic growth is accelerating, yet profitability remains stuck at near-break-even levels.

Low GDP per capita across much of the continent limits discretionary spending, making air travel highly price sensitive and restricting its growth potential.

Without relief on costs, taxes, and market fragmentation, the region’s airlines are likely to continue operating with limited buffers even as demand expands.

The report suggests that easing visa regimes, revisiting bilateral air service restrictions, reducing fuel markups, and addressing ageing fleets could help unlock the continent’s aviation potential—transforming growth into sustainable profit.

For now, African carriers remain caught between rising passenger demand and structural inefficiencies that erode margins, leaving them more exposed to shocks than their global counterparts.

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