Intervention by the Secretary General of the African Airlines Association (AFRAA) at the User Charges Workshop on 29 October 2024
Reiterating AFRAA’s vision to create a sustainable, interconnected, and affordable African air transport industry, Mr Berthé – AFRAA Secretary General, highlighted the areas of action for the airline industry to address the high cost of operations that is impacting the performance of African airlines.
“While Africa’s aviation industry continues to perform strongly, with increased passenger traffic and improved operational efficiency with key drivers including expanded routes, and rising domestic and international travel demand, one of the most fundamental factors determining an airline’s success or failure is the cost structure associated with its operations.” He stated. “If the cost is too high, the profitability is affected, making it more challenging to expand the network.” He added.
Noting that taxes and fees generally represent over 40% of airlines’ most affordable base fares and more than 20% of ticket prices, Mr Berthé remarked that, for a given average trip length, ticket fares are more expensive in Africa. “On average, they are twice or thrice as high as in Europe and Asia. Consequently, air transport is not affordable for African citizens with the lowest GDP per capita.” He said.
He further cited the disparities and non-harmonization across the continent, with West and Central Africa being the worst affected. Since taxes and charges imposed on African aviation are among the highest in the world, this hinders the industry’s growth and development and significantly affects its competitiveness. The current cost structure of most African carriers will not allow them to compete with the increasingly fierce international competition.
Mr Berthé called upon the governments to take various actions to address the challenge. “Aviation is not a luxury but a critical economic development and integration driver. This considers its direct links to economic growth, resulting from spillover effects by creating direct and indirect jobs in the industry and other auxiliary sectors, such as tourism, services, and logistics. As such, governments need to make the sector’s development a priority.” He said.
“Governments must reduce levies targeting airlines to create a conducive environment for air transport development.” Mr Berthé added.
Understanding that the industry can only thrive in an environment where air travel is made affordable, and more Africans can travel, all actors must ensure the sector is well-positioned for success.
Noting that high taxation is a significant obstacle to aviation development and Airline sustainability, industry stakeholders organised the Air Transport Sustainability Laboratory in 2022, hosted by AFRAA, in Nairobi. The Laboratory developed a roadmap, including recommendations regarding taxes and charges.
Mr. Berthé concluded his intervention by calling upon all stakeholders to play their role in implementing the roadmap of the Laboratory and the effective engagement of decision-makers in reducing taxes and charges on the continent. “AFRAA will continue our lobbying efforts to reduce these taxes to ensure the continent reaps the full benefits of an efficient air transport industry.” Mr Berthé stated.
