Many African airlines want to expand their fleets and networks, but there’s more to the story…
The past 12 months have been exciting but equally challenging for African airlines. The year started with the aim of recovering from the effects of the pandemic, as well as improving operational practices to match global standards. Development is expected to continue in 2024, so let’s see what we should expect.
Full return to pre-pandemic traffic
Africa’s passenger traffic saw tremendous recovery in 2023, with some countries witnessing pre-pandemic numbers as early as the first quarter of the year. On a global level, passenger traffic is expected to fully recover in 2024. This year, it stood at about 99% of 2019 levels and will reach at least 109% next year. On a regional level, all regions, except for Asia-Pacific, saw full recovery in 2023.
According to data from the International Air Transport Association (IATA), passenger traffic in Africa is at about 101% of 2019 levels. The December report, titled “Africa Media Briefing,” notes that this is expected to grow to 105% in 2024. While traffic surpassed pre-COVID levels on a regional scale, this is not the case for all sub-regions.
Northern and Eastern Africa were expected to lead the continent in traffic recovery this year, reaching over 103% and 102% of 2019 levels, respectively. On the other hand, traffic in Southern Africa remained below pre-crisis levels, with full recovery expected in 2024. Southern African countries and airlines continue to be affected by longstanding structural and economic constraints.
More aircraft acquisitions
This year, some of Africa’s largest carriers, like Egyptair, Ethiopian Airlines, and TAAG Angola Airlines, made headlines with significant aircraft orders. Other carriers took delivery of new aircraft from orders placed over the last few years and from new deals with OEMs and lessors.
All these acquisitions align with the various fleet expansion and modernization strategies set by African carriers and governments. Ethiopian Airlines will continue progressing with its ambitious “Vision 2035” strategy. Already with the largest fleet in Africa, the airline plans to add over 130 new aircraft over the next 12 years. As such, we expect more orders from the Star Alliance member airline in 2024. More importantly, the carrier will receive its first A350-1000 next year.
Royal Air Maroc is also expected to make big orders in 2024. Last July, the carrier signed an agreement with the Moroccan government to boost its fleet from about 50 aircraft in 2023 to over 200 by 2037. To achieve this, it plans to add at least ten aircraft annually. The carrier was expected to issue a tender for the acquisition of 200 aircraft by the end of 2023, so this may be delayed to next year.
With these orders, African carriers are also modernizing their fleets with more advanced and fuel-efficient aircraft to meet their short-term sustainability goals. However, with industry-wide aircraft capacity shortages, together with these ambitious expansion plans, we might not see many airlines retiring older aircraft models next year despite Africa being home to some of the oldest planes.
Airlines to remain loss-making
Regarding the financial situation of African carriers, 2023 was projected to be a much better year compared to the previous 24 months. Companies have not published their 2023 financial results, but 2022 figures showed tremendous post-pandemic recovery for some airlines like TAAG Angola Airlines and Air Seychelles.
Despite the improvements, African airlines are expected to remain loss-making in 2024. According to the latest IATA statistics, all regions are expected to return to positive operating margin by 2024. In Africa, net profit will remain negative, but carriers will witness positive operating profits.
IATA forecasts that Revenue Passenger Kilometers (RPKs) will reach 2019 levels next year while load factors continue to improve. However, costs will remain significantly high while the gap between load factors and breakeven load factors remains small, resulting in positive operating results but moderate losses after tax.
New international routes
One of the most notable intra-continental route launches this year was Air Algerie’s Airbus A330 flights between Algiers and Johannesburg. We should expect to see more flights between North and sub-Saharan Africa as both the Algerian and Moroccan flag carriers are set to expand operations within the continent.
Morocco is also set to gain more international connections ahead of the 2030 FIFA World Cup and as part of the government’s directive to boost inbound tourism. Ryanair, already the largest European carrier by flights to Africa, plans 24 new international and 11 domestic routes in Morocco next year.
This year, South African Airways returned to the long-haul market, with flights from Johannesburg and Cape Town to São Paulo in Brazil. Although no official announcement has been made, the carrier is eyeing a return ‘down under’ to Perth, Australia, as an additional intercontinental destination. It also plans to have a fleet of at least 21 aircraft by February 2025.
Ultimately, 2023 comes to a close with African airlines reflecting on a much better operational year than the last. However, many challenges, like infrastructure constraints, ridiculously high costs and taxes, lack of connectivity, and trapped funds, continue to slow down the sector’s growth. Stakeholders hope these issues can be addressed in the near future to realize the full potential of African aviation.
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