Ailing African airlines stare at Sh20b losses
SEE ALSO: New effort to promote AfricaIata, a trade association of the world’s airlines, noted that poor connectivity in Africa, as well as high taxes and fees are to blame for the poor show by regional airlines. “African carriers continue to suffer structural problems of high costs – in large part owing to government taxes and fees – and low load factors,” said Iata in the December report. “Economic growth in the region has been relatively good and is expected to rise in 2020, but markets are extremely fragmented and inefficiently served in the absence, so far, of a Single Africa Air Transport Market. As a result, they are projected to show a loss of $200 million, similar to 2019.” Iata has been pushing for the opening of African skies through the adoption of the Single Africa Air Transport Market, an initiative of the African Union to liberalise the civil aviation market. It has, however, been opposed by some airlines on the continent who fear other more financially muscled carriers might crush them. “Africa is one of the weakest regions, as in the past five years. Breakeven load factors are relatively low, as yields are a little higher than average and costs are lower. However, few airlines in the region are able to achieve adequate load factors,” said Iata.
Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.