Rising aviation costs, high levies squeeze African airlines’ profits

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African airlines are facing growing financial pressure from high taxes, passenger charges and regulatory levies, with the International Air Transport Association (IATA) warning that rising costs are undermining the profitability and expansion of carriers across the continent.

IATA Regional Vice President for Africa and the Middle East Kamil Alawadhi said governments were increasingly treating aviation as a source of revenue rather than a strategic sector capable of driving trade, tourism, investment and economic growth. “African governments are squeezing and milking the aviation industry more and more out of their airlines. Aviation should not be treated primarily as a source of revenue but as an engine of economic development,” Alawadhi said.

He said the cost burden was being compounded by limited funding, ageing airport infrastructure, intense competition from international carriers and higher fuel costs linked to geopolitical tensions.

Alawadhi spoke during the 10th Africa Aviation Summit in Nairobi.

He singled out charges imposed on airlines and passengers for Advance Passenger Information (API) and Passenger Name Record (PNR) systems, which are used to strengthen border security and facilitate immigration processing. According to Alawadhi, some countries are charging up to $30 (Sh3,870) per passenger for the systems, turning what he described as a government border-security responsibility into a revenue-generating activity.

He called for governments implementing API and PNR programmes to follow internationally recognised standards and establish clear legal and operational frameworks.

“Border security is a government responsibility and related costs, including those associated with API and PNR programmes, should be funded by governments rather than airlines or passengers through excessive charges,” he said.

The IATA executive also raised concerns over passenger levies in several African markets, citing Tanzania, where charges can reach $45 per sector for a one-way journey, Gabon at $30 and Equatorial Guinea at $50.

He warned that such costs could make air travel more expensive, constrain passenger demand and weaken the ability of airlines to expand their networks.

The cost pressures were among issues discussed during the aviation summit, which brought together industry stakeholders to examine challenges affecting airlines and air travel in Africa. Other concerns included blocked airline funds, safety, infrastructure constraints and the implementation of API-PNR systems.

He urged governments to finance and implement the programmes in line with internationally agreed standards and International Civil Aviation Organisation (ICAO) principles contained in Doc 9082.

Aviation intelligence consultant Sean Mendis supported the call for governments to reconsider their approach to taxation, arguing that lower costs could stimulate demand and attract greater investment into the sector.

He cited Ghana’s decision in 2017 to remove a 17.5 per cent Value Added Tax on domestic airfares as an example of a policy aimed at reducing the cost of air travel and stimulating the market.

Mendis said governments needed to look beyond immediate tax revenues and consider the wider economic benefits generated by a growing aviation industry.

“The challenge with African aviation is that too many governments view aviation as something for their need and therefore they tax it accordingly and consequently end up raising prices so that only the elite can afford it,” he said.

He also called for reforms in the management of national airlines, urging governments to prioritise competitive recruitment and professional management.

Mendis said governments should avoid using airlines primarily as vehicles for creating employment, arguing that excessive staffing and political interference could weaken the financial performance of state-owned carriers.