Africa's Airlines Boom, But its Stay Grounded

May 3 , 2026. By BEZAWIT HULUAGER ( FORTUNE STAFF WRITER )

The Single African Air Transport Market (SAATM) seeks to create a liberalised market, moving away from restrictive bilateral agreements. Despite being a flagship project of the AU's Agenda 2063, the initiative often faces "political reluctance" and is frequently sidelined at high-level meetings. Experts argue that "borders in the African sky" continue to hinder growth, with some logistics costs now exceeding the cost of jet fuel

African aviation is entering a contradiction. The continent has the world’s fastest passenger growth, yet its airlines remain among the least profitable, squeezed by high charges, expensive fuel, blocked revenues and political hesitation over integration.

In March 2026, African carriers recorded a 20.6pc year-on-year increase in passenger traffic, the highest growth rate globally. But the average airline on the continent earns only $ 1.3 in net profit a seat flown. The industry is fragmented by regulation, weakened by costs and burdened by governments that often treat aviation less as economic infrastructure than as an easy revenue source.

However, the aviation sector supports 8.1 million jobs across Africa and contributes 75 billion dollars to the continent's GDP, including 42 billion dollars linked to tourism. Each year, it carries 110 million passengers, equal to 2.9pc of global passenger traffic, and moves 1.2 million tonnes of air freight. Experts following the continent's aviation business insist that aviation can create prosperity more durably than taxation when governments see it as a strategic enabler.

Ethiopian Airlines Group (EAG) offers both the promise and the pressure that the sector experiences. Already supporting two billion dollars in economic activities and more than half a million jobs across the aviation community, passenger demand is expected to triple over the next two decades. Ethiopian Airlines, the continent’s strongest carrier, performs above the African average, according to Mesfin Tassew, CEO of the Group, although he declined to disclose figures.

“The Ethiopian Airline’s profit margin is higher than the average,” he told Fortune.

He attributed the performance to the Group's strength and wider network of destinations. But he shifted focus to the wider market. Nearly half of the continent’s 50 airlines are operating at a loss. Japan Airlines performs better because it is more established and has a wider network. The comparison could be unforgiving.

African airlines collectively earn about 200 million dollars a year. Latin America, the next-least-profitable region, earns 10 times as much. Other regions record profits from 6.6 billion dollars to 14 billion dollars. Asia-Pacific airlines earn 3.2 dollars a passenger, nearly three times Africa’s level. In the Middle East, the figure reaches 28.6 dollars, more than 20 times Africa’s profit a seat. Other regions make between 5.70 dollars and 10.90 dollars.

For the past 10 years, African airlines’ global market share has remained at two percent.

Yet African tickets are among the world’s most expensive. Government taxes and infrastructure charges on the continent are about 15pc above the global average. Tanzania’s Advanced Passenger Information-Passenger Name Record (API-PNR) charge of 45 dollars to 48 dollars for a one-way ticket is cited as the highest globally.

“I can't understand the reason behind these numbers,” said Kamil Alawadhi, regional vice president for Africa & the Middle East of the International Aviation Transport Authority (IATA). “Travel restrictions are pushed even through the continent’s countries.”

Many in the industry see the cost base deeply punishing, for African carriers have the highest unit costs in the world, nearly double the industry average. Fuel prices are 17pc higher than global benchmarks. Air navigation charges are more than 10pc higher. Maintenance, insurance and capital costs are six percent to 10pc higher than in other continents. A 106.6pc year-on-year spike in jet fuel prices, driven by disruptions in the Middle East, has deepened the pressure.

Alawadhi rejected the idea that airline protectionism is uniquely African. There is “no proof that there is protectionism in African country airlines, since similar practices occur worldwide.”

"The issue is what protection should achieve," he said. "Governments should protect national interests and ensure aviation contributes to economic output and citizens’ welfare, regardless of airline ownership."

He would rather blame African governments for showing neglect. His team spent three years trying to engage the Cameroon Central Bank on the Zazo issue. Even a four percent drop failed to trigger a response. He believes such silence tells the sector that authorities “don't care what damage is done,” whether an airline is protected or not.

Blocked funds are the clearest dysfunction. As of March 2026, airlines had 774 million dollars stuck in African countries, the largest share of the global total of 900 million dollars. Algeria held 258 million dollars, followed by the Central Africa Zone, Mozambique, Eritrea and Angola. For airlines operating on narrow margins and rising costs, those knowledgeable of the industry fear that the inability to repatriate revenue weakens liquidity and confidence.

Policy borders still restrain the demand that aircraft can cross. Nearly half of intra-African travel still requires a visa before departure, keeping flying an elitist service rather than a tool for regional integration.

Safety also drags as Africa’s aviation accident rate, which stands at 7.86 per million sectors, the highest among all regions and far above the global average of 1.32. IATA insists governments should raise the implementation of ICAO standards and recommended practices, now at about 60pc in sub-Saharan Africa, and improve the publication of accident investigation reports.

“My one wish is to collect all the leaders of the countries on one table and make them agree to work together,” he said.

Yonatan Menkir, an aviation expert and pilot with more than a decade of experience, has an idea to pitch to achieve that. He urged the industry leaders to use the next African Union (AU) summit in Addis Abeba.

“That will be the best time to table SAATM to the leaders,” he said. “There will not be any better chance than having this with a team organised.”

SAATIM stands for the Single African Air Transport Market, an AU initiative to create one liberalised air transport market across Africa. The idea is to make it easier for African airlines to fly between African countries without relying on as many separate bilateral agreements. It is tied to the 1999 Yamoussoukro Decision and was launched by the AU in 2018 as one of the Agenda 2063 flagship projects.

However, Alawadhi had tried to table the idea four years earlier but found little attention at high-level AU meetings.

"Such discussions were often pushed to late sessions after many ministers had left," he recalled.

Alawadhi argued that initiatives such as SAATM address connectivity issues but not the deeper problem of unjustified charges and levies that restrict financial flows and development.

In a panel held last week at the Skylight Hotel, on Africa Avenue, Alawadhi raised the matter with Mesfin and Obinna Ejimofo, head of commercialisation at the Pan African Payment & Settlement System, which is exploring ways to address blocked funds. Despite Alawadhi's urging, Ejimofo avoided directly addressing the issue of resolving blocked-fund issues. Mesfin, too, avoided taking responsibility for bringing the leaders of all 54 countries to the next AU meeting.

For aviation experts on the continent, the question is not whether African aviation can grow, but whether governments can remove constraints that make growth fragile.

The industry’s pillars are safety, cost competitiveness, ease of doing business and sustainability. They say the industry wants excessive taxes and charges reversed, residence-based corporate taxation preserved to avoid double taxation, airline revenues repatriated without delays, visa burdens reduced, infrastructure built cost-efficiently, training expanded, and participation in global carbon markets strengthened.

According to Yonatan, the sector requires a political rethink.

“Governments don’t believe that this is an engine for trade and a catalyst for investment,” he told Fortune. "Aviation is the backbone of investment, where governments still drive much of it."

He believes borders in the African sky are hindering regional growth, arguing that they were drawn to facilitate colonisation. Fleet acquisition, insurance, finance, fuel volatility and logistics costs deepen the pressure. In some cases, he observed, logistics alone cost more than jet fuel.

PUBLISHED ON May 03,2026 [ VOL 27 , NO 1357]