African Aviation Sector Sees Growth Amid Challenges in Q2 2024

In the second quarter of 2024, the African aviation industry continued to show resilience and growth, navigating economic challenges and seizing opportunities. Airlines across the continent sustained their recovery, driven by a steady increase in passenger demand according to the African Airlines Association (AFRAA)

Growth in Seat Availability and Passenger Demand

The total seat availability in Global Africa saw a notable 6% increase, rising from 15 million seats in June 2023 to 16 million seats in June 2024. Intra-Africa routes experienced a modest 0.5% rise in seat availability, attributed to new route introductions, network expansions, and fleet upgrades. Additionally, Available Seat Kilometers (ASKs) for June 2024 surpassed June 2023 levels by 11%, while Revenue Passenger Kilometers (RPKs) showed a 5.8% year-over-year increase.

African carriers claimed 49.6% of international capacity and 37.0% of intercontinental capacity. The African Airlines Association (AFRAA) estimates a 15% growth in passenger traffic for African airlines in 2024 compared to 2023. On international routes, AFRAA predicts a capacity split of 49.6% for African carriers and 50.4% for non-African carriers. For intercontinental routes, African carriers hold 37.0% of the capacity, while non-African carriers dominate with 63.0%.

Expanding Connectivity and Increasing Revenues

Connectivity within Africa continues to expand, with major hubs such as Addis Ababa, Nairobi, Abidjan, and Lomé seeing significant increases in connections. African airlines are reporting improved passenger revenue, reflecting the overall traffic growth. AFRAA data indicates that passenger revenue in April 2024 reached $1.70 billion, up 2% from $1.66 billion in April 2023.

Fluctuating Jet Fuel Prices

The global price of Jet A1 fuel continues to fluctuate, ending the week of June 21, 2024, up 3.2% at $103.16 per barrel.

Regulatory and Industry Affairs

The African Civil Aviation Commission (AFCAC) has developed model economic regulations aimed at harmonizing regulations across the continent. These regulations cover economic licensing for scheduled and non-scheduled air transport services and allied services such as ground handling and catering. The regulations mandate financial monitoring and operational data submission for domestic airlines, ensuring transparency and efficiency. They also provide economic oversight of airports and air navigation service providers (ANSPs), emphasizing consumer protection through passenger rights and compensation guidelines.

AFCAC is validating these regulations in Lomé, Togo, from June 26-28 and in Kigali, Rwanda, from July 1-3, with AFRAA submitting the proposed regulations.

Challenges and Opportunities in SAATM Implementation

A survey conducted by AFRAA in the first half of 2024 revealed that several countries have yet to fully liberalize and implement the Single African Air Transport Market (SAATM), as evidenced by the denial of Fifth Freedom Rights. AFRAA plans to coordinate with AFCAC to facilitate the granting of these freedoms. The survey also identified political goodwill and reciprocity as significant hindrances to full SAATM implementation. Additionally, certain taxes and charges increase operational costs, prompting AFRAA to advocate for necessary petitions and encourage measures such as fleet modernization, free routing airspace, and participation in carbon offset programs for environmental sustainability.

Visa Policies and Their Impact

Namibia’s proposal to remove visa-free entry for citizens of 31 countries is expected to negatively impact tourism, business travel, and economic growth. In contrast, Angola, Botswana, Namibia, Zambia, and Zimbabwe plan to introduce a single tourist visa, similar to the Schengen visa, allowing entry to all five countries for a short period. Zambia and Zimbabwe have already started implementing the “UniVisa” for entry to both countries and short stays in Botswana.

Nigeria is launching a new e-visa system with electronic gates at major airports to streamline visa applications as per Nigeria Visa Policy 2020. Togo and São Tomé and Príncipe have signed an agreement for visa-free travel between their citizens, aiming to enhance movement and connectivity between the two West African nations.

Addressing Interconnectivity and Blocked Funds

Two studies conducted by Airbus and Boeing highlighted the need to address restrictive bilateral agreements, airline capacity challenges, and high operating costs to improve interconnectivity on the African continent. Despite Nigeria releasing almost 98% of the funds that were blocked in the country, the continent continues to grapple with blocked funds. AFRAA’s Task Force on Blocked Funds will engage with relevant government offices to facilitate the unblocking of these airline funds.

The African aviation sector continues to demonstrate resilience and adaptability, navigating challenges and seizing opportunities for growth and connectivity across the continent.