African airlines are expected to continue reporting losses next year with the rise in oil prices expected to compound their challenges. The International Air Transport Association (IATA) expects the industry in Africa to post a KSh80 billion ($800 million) loss in 2017.
The performance is comparable to what they reported in 2016. The losses will make Africa the only region that is not profitable for airlines with carriers in all other regions reporting profits.
Major African carriers including Kenya Airways and South African Airways have reported losses in the last year. Only Ethiopian Airlines has remained consistently profitable.
“Carriers in Africa are expected to deliver the weakest financial performance with a net loss of $800 million (broadly unchanged from 2016).
For each passenger flown this amounts to an average loss of $9.97. Capacity in 2017 is expected to grow by 4.7 per cent, ahead of 4.5 per cent demand growth,” said IATA in its latest industry update. READ MORE
“The region’s weak performance is being driven by regional conflict and the impact of low commodity prices.”The price of crude oil has started going up after the Organisation of Petroleum Exporting Countries (OPEC) agreed to cut production in a bid to push up prices.