IATA: Africa most expensive region for airline operations in the world

..Jet fuel, taxes, others, reasons for the high cost of doing business in Africa
..Carriers operate on razor-thin net profit margin of 1.3%—the lowest globally

The International Air Transport Association (IATA) has listed jet fuel at 17%, taxes and fees at between 12 and 15%, air navigation charges at 10%, maintenance, insurance and capital at 6-10%, blocked funds at $954 million and high ticket prices as the reasons the cost of doing business in Africa is high.

According to the clearing house for over 300 global airlines, Africa is the most expensive region in the world for airline operations, noting that while the continent is projected to see air traffic growth of 6.0% in 2026 (surpassing the global average), its airlines operate on a razor-thin net profit margin of just 1.3%—the lowest globally.

Regional Vice President, Africa and Middle East, Kamil Alawadhi, in a paper he presented at the IATA Global Media Day, made available to the Aviation Metric, disclosed that African carriers face unit costs nearly double the global industry average ($140 per available tonne-kilometre vs. ~$70 globally).

Breaking it down, the IATA chief said jet fuel in Africa is typically 17% more expensive than the global average.

According to him, this is due to limited local refining capacity, supply chain inefficiencies, and a heavy reliance on imports. Fuel often accounts for up to 40% of an African airline’s operating expenses (vs. ~25% globally).

He reiterated that aircraft in Africa are, on average, five years older than the global average, hinting that older fleets require more frequent maintenance and consume more fuel.

He further stated that the lack of local Maintenance, Repair, and Overhaul (MRO) facilities forces airlines to source parts and services from overseas at a premium, while criticising many African governments for treating aviation as a “cash cow” rather than an economic enabler.

Airport and air navigation charges, he said, are roughly 10–12% higher than in other regions, adding that in some markets, taxes and fees can account for a large share of the ticket price.

He said, “For example, a $100 base fare might carry $60–$80 in additional statutory charges, making air travel a luxury for most of the population.”

One of the most unique and severe challenges in Africa, according to Alawadhi, is airlines’ inability to repatriate their earnings.

He stated that as of late 2025, Africa accounts for approximately 79% ($954 million) of the world’s total blocked airline funds.

“When governments restrict the conversion of local earnings into hard currency (like USD), airlines cannot pay for dollar-denominated expenses like aircraft leases, fuel, and insurance. This creates massive cash flow risks and often forces airlines to reduce service to those countries.”

Other issues that have hindered the continent’s aviation industry include a fragmented market and protectionism.

Statistics show that only 19% of intra-African routes offer direct flights. Many passengers are forced to transit through Europe or the Middle East to reach another African city.

Most African airlines are small and lack the economies of scale enjoyed by global giants. Protectionist policies and restrictive bilateral agreements prevent the level of competition that would naturally drive down prices.

Meanwhile, IATA presented its outlook for Africa as part of its 2026 global industry forecast at its Africa media roundtable.

While Africa is expected to outpace global traffic growth next year, the region continues to face some of the world’s most demanding operating conditions, resulting in the smallest share of global industry profits and fragile margins.

IATA forecasts global air travel growth of 4.9% in 2026, slightly below the 5.2% expected in 2025.

Africa is projected to exceed the global average with 6.0% growth in 2026. International cargo demand will grow 2.6% in 2026, while Africa’s development will be slightly lower at 2%.

Despite above-average demand, the financial outlook remains challenging. Of the $41 billion in global net profit forecast for 2026 (3.9% margin), African carriers are expected to generate just $200 million profit, representing a 1.3% margin—the lowest of all regions. This equates to $1.3 in profit per passenger, compared to a global average of $7.9.

Wole Shadare