Release date: 06 April 2023
Airline Performance: In March, the traffic carried by African airlines reached 94.8% of the full year 2019 level. Domestic market share was at 37%, intra-Africa at 31% and intercontinental at 32%. AFRAA estimates that by end 2023, total passengers carried by African airlines will reach 85 million, this being about 10 million short of the full year 2019 passenger traffic.
The total number of intercontinental routes operated by African airlines exceeded pre-Covid levels since October 2022. In 8 African airports (Johannesburg, Nairobi, Addis Ababa, Lusaka, Cairo, Casablanca, Abidjan and Lome) intra-Africa connectivity reached or exceeded pre-Covid level since December 2022.
The year 2023 is witnessing a narrowing of airline revenue gap compared to 2022. In the first 3 months of the year, African airlines missed the levels attained in a similar period in 2019 by US$0.3 billion. This is expected to further narrow in the second quarter to US$0.2 billion according to AFRAA. Though the full year estimated revenue gap is yet to be computed, it appears 2023 will be a better year compared to the prior year. The 2022 full year revenue loss was US$3.5 billion for all African airlines combined.
Jet A1 price continued the downward trend in March with the global average price per barrel in the last week of March reaching US$102.5. However, this trend changed to a surge in April following the OPEC producers’ announcement of plans to cut crude output.
Blocked Funds: Nigeria, with US$743 million of airline-blocked funds, is currently ranked the second highest in the world after Venezuela. An AFRAA survey indicates that 3 African airlines alone, have about $44.2 million blocked in Nigeria. These 3 AFRAA airlines have a total of US$88.9 million blocked in 12 African countries at the end of 2022. Aside Nigeria, other African countries with blocked funds at the end of 2022 include Algeria, Libya, Cameroon, The Central African Republic, Ethiopia, Eritrea, Equatorial Guinea, Guinea Conakry, Burundi, Malawi, Sierra Leone, Zambia and Zimbabwe.
AFRAA is continuing its advocacy on blocked funds. According to the Secretary General of AFRAA, Abderahmane Berthé, “It is unacceptable for some States to hold on to airline generated revenues that is badly needed to cover operating costs and yet expect operations to continue undisrupted. The longer these funds are held, the bigger the financial burden these States impose on airlines supporting air connectivity and economic activities in these countries.”
Regulatory and Industry Developments
Canada – Single-use Plastics (SUP) Prohibition Regulations: The Canadian government published a regulation on single-use plastics (SUP) prohibitions in June 2022, which has implications for airline operators. Starting 20 December 2022, airlines are unable to buy or import 6 categories of SUP, including cutlery, foodservice ware, sticks and straws, etc. in Canada. See link for details: technical guidance.
Consultation on Balanced Approach Schiphol: The Dutch Ministry for Infrastructure and Water Management launched a consultation on the noise-balanced approach, in which they propose a combination of required noise restriction measures to reduce the 500k movement cap to attain the 440k movements cap, imposed by the government. However, on 5 April 2023 the Dutch Court halted the implementation of the proposed flight cuts after IATA pointed out that the reduction was in contravention of EU Laws. Details are available here English
Sierra Leone Airport Development Charge: Sierra Leone has made revisions to Aviation Security Charge and Foreign Travel Tax, including a revocation of Foreign Travel Tax for ECOWAS States. The government, through the civil aviation authority, plans to increase by 1400% Airport Development Charge to be borne by passengers. “This is a shot in the foot for a country that needs air connectivity to facilitate trade, business and general socio-economic development”, says AFRAA Secretary General, Abderahmane Berthé.
The African Airlines Association, also known by its acronym AFRAA, is a trade association of airlines from the member states of the African Union (AU). Founded in Accra, Ghana, in April 1968, and headquartered in Nairobi, Kenya, AFRAA’s mission is to promote, serve African Airlines and champion Africa’s aviation industry. The Association envisions a sustainable, interconnected and affordable Air Transport industry in Africa where African Airlines become key players and drivers to African economic development. AFRAA membership of 48 airlines cuts across the entire continent and includes all the major intercontinental African operators. The Association members represent over 85% of total international traffic carried by African airlines. Follow us on Facebook, LinkedIn, Twitter and YouTube.