African airlines projected to post improved revenues in 2023

African airlines projected to post improved revenues in 2023
African airlines projected to post improved revenues in 2023

Africa-Press – Eritrea. African airlines have narrowed the revenue gap almost hitting the pre-Covid-19 period due to increased travel.

In August 2023, the traffic carried by African airlines reached 98.4 percent of the 2019 levels majorly boosted by local market travel.

The African Airlines Association data shows that last month’s domestic market share was estimated at 34 percent, intra-Africa at 29 per cent, and intercontinental at 37 percent.

However, the total number of intercontinental routes operated by African airlines for the first time exceeded pre-COVID levels since October 2022.

“2023 is witnessing a narrowing of the airline revenue gap attributed to Covid-19 compared to 2022. In the first 3 months of the year, African airlines missed the levels attained in a similar period in 2019 by US$0.3 billion (Sh43.8 billion),” said AFRAA.

The association added that this is expected to further narrow in the second quarter to $0.2 billion (Sh29 billion).

In some major airports in Johannesburg, Nairobi, Addis Ababa, Lusaka, Cairo, Casablanca, Abidjan, and Lomé, intra-Africa connectivity has reached or exceeded pre-Covid level since December 2022.

The Associations says that though the full-year estimated revenue gap is yet to be computed, it appears 2023 would be a better year compared to the prior year.

The 2022 full-year cumulative airlines revenue gap was $3.5 billion (Sh511 billion) for all African airlines compared to 2019.

The Jet A1 price continues the upward trend, going up by over $22 in one month.

The global weekly average jet fuel price during the week ending 25 August 2023 was up 2.9 per cent at $126.37/bbl.

In July, the average weekly price was $103.64/bbl. The industry’s blocked funds reduced marginally in July to $2.2 billion compared to $2.274 billion in June.

Some 22 countries account for the blocked funds globally. 14 of the blocked funds countries are in Africa, accounting for about 70 percent of total blocked funds.

AFRAA has requested meetings with some central bank Governors and will soon meet them to agree on a solution to this recurrent problem as part of engagements to have the funds released.

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