This archive report was first published on 12 June 2021.
High Airfare Costs in Africa: A Concern for Aviation Stakeholders ¶
Published on June 12, 2021
High airfare costs in Africa have been a long-standing concern for frequent air travelers and industry stakeholders alike. In an effort to address this issue, top African aviation stakeholders met virtually early this year to discuss the factors responsible for the high cost of air travel and suggest ways to make it more affordable.
According to industry experts, high airfare costs result from a combination of factors, including the cost of goods sold, intermediary costs, government taxes, regulatory charges, time of purchase, fuel costs, market forces of demand and supply, and costs related to original equipment manufacturers.
Additionally, safety and security concerns, poor intra-African connectivity, market access limitations, and inadequate infrastructure were identified as some of the challenges facing the industry.
Tefera Mekonnen Tefera, Secretary-General of the African Civil Aviation Commission, noted that the aviation sector was seriously over-taxed and over-burdened with high charges and fees, making travel by air unaffordable in most parts of Africa.
"Airlines are equally faced with high jet fuel costs; however, the charges and taxes levied by far have the highest impacts on the prices of tickets for air travel in Africa," Mr. Tefera emphasized.
Industry stakeholders also lamented that jet fuel costs more in Africa, including in oil-producing countries, than in Europe or the Middle East.
Director-General of the Kenya Civil Aviation Authority Gilbert Kibe said that high aviation costs have hindered inter- and intra-African commerce, business, and leisure travel, which have diminished the competitiveness of African products in the global market.
"Lack of competition due to the monopolistic stranglehold of the big airlines has led to a few planes which charge the equivalent of traveling to European destinations," Mr. Kibe noted.
The outbreak of the COVID-19 pandemic has worsened the situation of African airlines, with the industry losing up to $6 billion last year due to the pandemic.
Industry stakeholders say that a restart and recovery must be an opportunity for African aviation to address high operational costs.
Chief executive of Crabtree Capital, a Dublin-based aviation consultancy, Mark Tierney, says that, "If we're serious about making civil air transport affordable for the majority so as to boost economic growth and development, there are only two ways to do it: subsidies or reduced unit costs."
