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African airlines lead in passenger numbers

NEWS
By Moses Omusolo | February 15th 2020

African airlines survived tough economic headwinds to lead the globe in passenger demand last year, a new industry report says.

Data from the International Air Transport Association (IATA) shows African carriers floored other rival global airlines to post a 5 per cent growth in passenger numbers, compared to the 4 per cent they posted in 2018.

This was as a result of increased connectivity to major world destinations.

“Economic growth in the African region has been relatively good and is expected to rise in 2020,” IATA said in their survey conducted in December.

According to the aviation agency, the increased numbers are expected to propel African carriers to profitability after a decade of loss-making.

For example in Kenya, the national carrier posted a pretax loss of Sh8.56 billion in the first half of 2019,  compared to a loss of 3.99 billion shillings in the same period in 2018. 

KQ's operating costs jumped 15.4 per cent to Sh61.4 billion from Sh53.2 billion in the period under review.

Most African carriers have attributed their losses to high operating costs driven in large part by government taxes.

Painting a picture of the global economic situation, IATA Director General Alexandre de Juniac said slowing economic growth, trade wars, geopolitical tensions, social unrest, and the uncertainty surrounding Brexit all contributed to a tough economic environment for global airlines. 

 "This comes even as restructuring and cost-cutting has continued to pay shareholders dividends,” Mr Juniac said.  

The agency, in the survey, also asserted that African airlines have a reason to be optimistic this year.

This is because global spending by consumers on air transport is expected to reach Sh91.3 trillion ($908 billion).

This is equivalent to 1 per cent of global Growth Domestic Product. The airlines that African airlines were gauged against were drawn from Asia-Pacific, Europe, Middle East, North America and Latin America.

Latin American airlines' traffic increased only by 3 per cent, compared to the 7.5 per cent the airlines recorded in 2018.

IATA represents some 290 airlines comprising 82 per cent of global air traffic.

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