Introduction
I promised myself that I would never be one of them. You know – them? The ones who value efficiency over an extended experience of the wonder that is aviation. The data analyst who hopes she has the entire row to herself so she can work comfortably? The content creator who records a 20-minute video ranting about yet another delayed flight? The family on vacation complaining bitterly about a 2-hour layover becoming a 9-hour jail sentence in an airport? Them! Alas, I have been at least two of these characters at some point in time, and these frustrations from a passenger perspective describe some of the many metrics we can use to assess the health of Africa’s aviation industry.
In the previous article titled What Matters More, Demand or Networks? Yes!, we introduced a high-level framework describing the aviation industry or ecosystem in three major parts: aviation operations, financial investments and economic impact. Leveraging that framework, we will run a health check on Africa’s aviation industry.
Operational Health Check
A passenger in Africa is 1.5-times more likely to be sitting in an empty row than in the rest of the world on average based on load factor data from AFRAA. Great news for the passenger, right? Wrong! Load factors are a crucial KPI measuring the percentage of available seat capacity that is actually sold across flights. The trouble with low load factors is that the total fuel, crew and trip preparation cost for each trip remains the same regardless of a full or half-empty flight. However, cost per passenger changes – so from an airfare perspective, that Data Analyst is better off being squished between two other passengers without elbow room.
Another crucial operations performance metric is On Time Performance or OTP. This is simply the percentage of flights that fall within 15 minutes of the scheduled departure and/or landing time. It is a key measure used by airlines to signal reliability which is most appreciated by business-travel passengers (arguably the most valuable passenger for airlines). An OAG September snapshot for OTP across airlines around the world reveals Africa being at the bottom of the log versus the world. Compared to Africa’s 71%, regions like the Middle East, North America and Latin America are in the 80% range.
As a result of this and many underlying factors, Africa is severely under-represented from a passenger traffic (RPK) perspective. Africa drove ~2.7% of the world’s passenger air traffic in 2024, and yet there is opportunity to drive double that at the very least!
These performance statistics are a clear warning sign that Africa’s aviation industry is not firing on all cylinders. Operational health status: lagging.
Financial Investment Health Check
… the global aviation industry only started making a profit on a per passenger basis in 2023… compared to the world average of approximately US$6 per passenger, Africa is barely breaking even!
COVID was a rough time for all industries, but I will stick my neck out and say the aviation industry had it the roughest (second to the health care industry of course!). As a result, the global aviation industry only started making a profit on a per passenger basis in 2023! On a regional level Africa followed the trend, making 50 US cents profit per passenger in 2023 and 90 cents in 2024. However, compared to the world average of approximately US$6 per passenger, Africa is barely breaking even!
Viewing the situation from an EBIT margin perspective, Africa is consistently operating on the tightest margins. Where regions like the Middle East and Latin America enjoy EBIT margins of 12 – 15%, Africa manages a thin wallet, operating in the 3% range.
This is a clear indication that Africa faces either a severe cost disadvantage or strong market pressures limiting allowable mark-ups when pricing airfare. It goes without saying, but I’ll say it anyway: the fact that airlines can barely cover their daily operational expenses implies a short runway for Africa when it comes to investing in operational improvement or infrastructure and system upgrades. Financial investment health status: mayday!
Economic Impact Health Check
IATA’s connectivity index is useful in measuring how well Africa is doing regarding free movement of people … Most recent data claims that travelling in Africa is 3 to 24 times harder than in other regions in the world!
Economic impact is the key substantiating factor behind the call to move aviation up Africa’s priority list, and performance in this area further demonstrates significant room for improvement. In the previous article, we alluded to how the aviation industry promotes freer and faster movement of goods and people. IATA’s connectivity index is useful in measuring how well Africa is doing regarding free movement of people; and this is where we fasten our seatbelts because the facts today are stark and sobering.
Most recent data claims that travelling in Africa is 3 to 24 times harder than in other regions in the world! At face value, this either implies barriers in opening routes, limited seat capacity, scheduling limitations or all of the above in Africa.
We also made the claim that freer and faster movement of goods stimulates trade activity, further increasing economic growth. As of 2022, Africa’s trade levels within the continent made up 17% of total export trade for the continent. This sounds low, but exactly how low is it? Well, considering Africa’s two key trade partners Europe and Asia sit at 69% and 49% respectively, I would say our 17% is very low! We have all heard the occasional trade horror story of two African countries needing a third European country as a logistical middle man just to trade amongst themselves, and this is the result. Economic health check: SOS!
Final thoughts
This indeed was a turbulent ride, with a couple of oxygen masks dropping from the ceiling towards the end there! Jokes aside, the performance metrics assessed today reveal a sobering story. On every dimension from load factors to flight connectivity, Africa is at the bottom of the log. Does that mean Africa is making no progress at all? Of course not. Taking load factors as an example, AFRAA data shows that Africa improved from 67% in 2014 to 75% in 2024, an 8 point increase!
Although the world on average only saw a 4 point shift from 80% to 84% in that same period, the fact remains that Africa was at the bottom of the log then and is still at the bottom now.
Does this mean we throw in the towel? Accept our fate? Of course not! It just means a radically accelerated improvement path is required. However, we can only improve or fix issues after we have deeply understood their root causes. In the articles to come, we will deep-dive into each part of the ecosystem, assess root causes of key challenges, and explore existing or innovative solutions to enable Africa’s Leapfrog Story.
Thank you for flying with us during this Industry Primer series of articles! See you on our next flight 😉
