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7-Dec-2017 10:56 AM

IATA forecasts losses for African carriers continuing into 2018

IATA forecast (05-Dec-2017) airlines in Africa will make "small losses" of USD100 million in 2018, roughly matching the collective net loss of USD100 million in 2017. Stronger forecast economic growth in the region is expected to support demand growth of 8% in 2018, slightly outpacing the announced capacity expansion of 7.5%. IATA noted the region's wider economic situation is only improving slowly, hampering the financial performance of its airlines. Nigeria has just emerged from recession and growth in South Africa remains extremely weak. While traffic is growing, passenger load factors for African airlines are just over 70% which is over 10 ppts lower than the industry average. With high fixed costs this low utilisation makes it very difficult to make a profit. IATA stated stronger economic growth will help in 2018, but the continent's governments need a concerted effort to further liberalise to promote growth of intra-Africa connectivity. [more - original PR]

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