African Airlines Face Up to 40% Fuel Cost Burden, Says IATA

The International Air Transport Association (IATA) has raised concern over the high operating costs confronting African airlines, highlighting fuel expenses as a major burden that continues to erode the profitability and competitiveness of carriers on the continent.

According to a document presented by IATA’s Regional Vice President for Africa and the Middle East, Kamil Al-Awadhi, at the 81st IATA Annual General Meeting held in New Delhi, India, African airlines spend up to 40 percent of their total operating costs on fuel, a figure significantly above the global average of 25 percent.

The report noted that fuel prices in Africa are 17 percent higher than the global average, due to limited local refining capacity, supply chain inefficiencies, and high import dependency. These cost pressures are compounded by elevated taxes, air navigation charges, and capital costs.

“It’s expensive to do business in Africa. African airlines face unique cost challenges, particularly high operational costs, which are significantly higher than the global average,” the IATA document read.

IATA further outlined that taxes, fees, and charges are 12–15 percent higher in Africa compared to other regions. Air navigation charges are 10 percent higher, while maintenance, insurance and cost of capital consume an additional 6–10 percent of airlines’ revenue, placing further strain on airline balance sheets.

Despite Africa’s growing population and projected 175 million air passengers in 2024, the continent accounts for only 2–3 percent of global air traffic, a reflection of its underutilized air transport potential.

IATA cited weak regional connectivity with only 20 percent of African flights serving intra-African routes, as a critical barrier to integration and sectoral growth.

Additionally, more than 75 percent of international traffic involving African destinations is operated by non-African carriers, underscoring the need to enhance the competitiveness of local airlines through strategic reforms.

Compounding the region’s operational challenges, IATA disclosed that as of April 2025, $1.28 billion of airline funds remain trapped globally, with 85 percent of the blocked funds concentrated in Africa and the Middle East (AME).

While this figure is a decline from the $1.7 billion recorded in October 2024, five African countries still account for a substantial portion of the backlog.

Countries such as Mozambique ($205 million), Algeria ($178 million), and the XAF Zone nations (including Cameroon, Central African Republic, and Gabon) with $191 million collectively represent the largest share of the blocked funds. Nigeria, however, is no longer listed among the debtors, having cleared its backlog in 2024.

Commenting on the report, Capt. Ado Sanusi, Managing Director of Aero Contractors, acknowledged the persistent cost burdens facing Nigerian carriers, particularly in the area of taxation.

“The taxes are high, especially in Nigeria, compared to other parts of the world. We cannot use airlines as a tool for raising government revenue. That model is unsustainable,” Sanusi said.

He emphasized the need for a deliberate policy shift to eliminate multiple taxation and reduce the cost of doing business in the sector.

“Many things add to the cost of operation in this part of the world. If we really want to achieve the development that we are all pursuing, there must be a deliberate attempt to address the issue of taxation for airlines,” he added.

IATA’s report adds to growing calls for a coordinated regional response to reduce operational inefficiencies, implement the Single African Air Transport Market (SAATM) agenda and incentivize investment in aviation infrastructure.

With rising jet fuel costs, high inflation, and foreign exchange challenges continuing to weigh on airline margins, analysts say unlocking Africa’s air transport potential will require bold regulatory reforms, liberalization of routes and harmonization of policies to foster sustainable aviation growth across the continent.