The International Air Transport Association (IATA) presented its outlook for Africa as part of the 2026 global industry forecast during today’s Africa media roundtable. While Africa is expected to outpace global traffic growth next year, the region continues to face some of the world’s toughest operating conditions—resulting in the smallest share of global industry profit and extremely thin margins.

Growth Ahead of Global Trends, but Profitability Remains Weak
IATA forecasts global air travel growth of 4.9% in 2026, slightly below the 5.2% expected in 2025. Africa is projected to exceed the global average with 6.0% growth in 2026. Cargo demand will grow 2.6% globally in 2026, while Africa’s growth will be slightly lower at 2%.

Despite above-average demand, the financial outlook remains challenging. Of the $41 billion in global net profit forecast for 2026 (3.9% margin), African carriers are expected to generate just $200 million in combined profits, representing a 1.3% margin—the lowest of all regions. This equates to $1.3 in profit per passenger, compared to a global average of $7.9.

“Demand for air travel in Africa is rising faster than in many other parts of the world, but profitability is not keeping pace. With margins of just 1.3%, African airlines are capturing only a fraction of aviation’s economic value. Addressing the barriers that constrain growth is essential to ensure the region’s traffic expansion also delivers financial strength,” said Kamil Al-Awadhi, IATA Regional Vice President, Africa and Middle East.

High Costs and Structural Barriers Constrain African Aviation
IATA emphasized that African airlines continue to operate in one of the world’s most difficult environments. Key constraints include:

Low GDP per capita: limiting demand and raising price sensitivity.
High operating costs compared to global average: Fuel prices: +17% higher, Taxes and charges: +12–15% higher, Air navigation charges: +10%, Maintenance, insurance, and capital costs: +6–10%.
Limited connectivity: Only 19% of intra-African routes have direct flights.
Blocked Funds: Africa Remains the Largest Contributor. Of the $1.2 billion in airline funds blocked globally as of October, Africa accounts for 79% ($954 million). Algeria is now the largest blocked-funds market.

Long-Term Potential Remains Strong
Despite current challenges, Africa’s aviation sector has substantial long-term opportunity. Over the next 20 years, Africa’s market is forecast to grow 4.1% annually, reaching 411 million passengers—the world’s third-fastest growth rate. Realizing this potential will require focused reforms to reduce barriers, improve affordability, and expand connectivity.

Recent progress on visa openness is an encouraging example:
Five countries now offer visa-free entry to all African nationals (Benin, The Gambia, Rwanda, Seychelles, Ghana).
28% of intra-African travel scenarios are now visa-free—up from 20% in 2016.
26 countries now offer e-visas, up from 17% in 2016.

These improvements demonstrate momentum toward greater mobility, trade, and regional integration.

Government Action Critical to Unlock Africa’s Aviation Potential
IATA called on African governments to work in collaboration with industry and pursue four priority actions:
Recognize aviation as a strategic economic enabler—not a revenue source—and avoid excessive taxes and charges.
Invest in efficient, scalable infrastructure without passing unsustainable costs to airlines and travelers.
Facilitate market access and competition by advancing the implementation of the Yamoussoukro Decision and SAATM.
Improve affordability and strengthen connectivity to unlock wider economic and social benefits.
“Africa’s aviation potential is immense. With the third-fastest growth rate in the world over the next two decades, the continent could serve more than 400 million passengers annually by 2044. We’re already seeing encouraging steps—like improved visa openness and e-visa adoption—that support greater mobility and integration. But turning potential into performance requires action. Governments must treat aviation as a catalyst for development, not a source of revenue. That means reducing costs, improving infrastructure, and advancing market liberalization through the Yamoussoukro Decision and SAATM. With the right policy support, aviation can be a powerful driver of economic transformation across Africa,” said Al-Awadhi.
Credit: IATA

• Africa, Middle East accounts for 93%

The International Air Transport Association (IATA) reported that USD 1.2 billion in airline funds are blocked from repatriation by governments as of the end of October 2025. A marginal improvement of USD 100 million has been made since last reported in April 2025. Out of total blocked funds reported, 93% are trapped in Africa and Middle East (AME).
IATA called on governments to lift all restrictions on currency repatriation and allow airlines to access their revenues in U.S. dollars from ticket sales, cargo sales and other activities, as guaranteed in bilateral air service agreements and treaty obligations. Restrictions include burdensome or inconsistent procedures to obtain repatriation approval, delays in obtaining approval, shortage or lack of foreign exchange or other limitations imposed by governments or central banks.
“Airlines need reliable access to their revenues in U.S. dollars to keep operations running, pay their bills, and maintain vital air connectivity. Governments have committed to unfettered repatriation of funds in bilateral agreements. With low margins and significant dollar denominated costs, airlines depend on governments fulfilling that commitment. It is also in the interest of governments to foster the economic catalyst that airlines provide by connecting their economies globally. That’s why we urge governments to facilitate the efficient repatriation of airline funds and prioritize this in foreign exchange allocations, even when currency is in short supply,” said Willie Walsh, IATA’s Director General.
Ten countries are responsible for 89% of blocked funds
Ten countries across Africa, the Middle East, and South Asia account for 89% of the total blocked funds, amounting to USD 1.08 billion.
Country                                                         Amount USD Million
Algeria ———————————————307
XAF Zone* —————————————-179
Lebanon ——————————————-138
Mozambique ————————————–91
Angola ———————————————81
Eritrea ———————————————78
Zimbabwe —————————————–67
Ethiopia ——————————————-54
Pakistan ——————————————-54
Bangladesh —————————————-32
*XAF Zone (Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea, Gabon)

Country Highlights
For the first time, Algeria sits at the top of the list of blocked funds countries. Significant increases have been reported due to a new approval requirement by the Ministry of Trade, adding to the already burdensome documentation requirements. IATA urges the government of Algeria to remove unnecessary processes and requirements for airlines.
While blocked funds in XAF Zone have slightly decreased since last reported in April 2025 from USD 191 million, airlines continue to face repatriation challenges despite submission of required documentation. We call on the BEAC to streamline the internal three-step validation process and improve processing times to continue clearing the backlog.
AME region accounts for 93% of total blocked funds across 26 countries, at USD 1.12 billion as of end October 2025.
“Political and economic instability are key drivers of currency restrictions across Africa and the Middle East, resulting in large sums of blocked funds. We recognize that allocation of foreign exchange is a difficult policy decision, but the long-term benefits for the economy and jobs outweigh short-term financial relief,” added Walsh.

Transparency
To provide greater transparency on the issue of blocked funds, IATA launched a web page to track progress quarterly, provide background information, and highlight developments.

Credit: IATA

The International Air Transport Association (IATA) updated its analysis of aerospace supply chain bottlenecks noting that aircraft availability remains one of the most significant constraints on industry growth in its just released global outlook.
While deliveries of new aircraft began to pick up in late 2025 and production is expected to accelerate in 2026, demand is forecast to outstrip the availability of aircraft and engines. The normalization of the structural mismatch between airline requirements and production capacity is unlikely before 2031-2034 due to irreversible losses on deliveries over the past five years and a record-high order backlog.
Notable points on the current situation include:
• Delivery shortfalls now total at least 5,300 aircraft.
• The order backlog has surpassed 17,000 aircraft, a number equal to almost 60% of the active fleet. Historically, this ratio was steady at around 30-40%. This backlog is equivalent to nearly 12 years of the current production capacity.
• The average fleet age has risen to 15.1 years (12.8 years for aircraft in the passenger fleet, 19.6 years for cargo aircraft, and 14.5 years for the wide-body fleet).
• Aircraft in storage (for all reasons) exceed 5,000 aircraft, one of the highest levels in history despite the severe shortage of new aircraft.
“Airlines are feeling the impact of the aerospace supply chain challenges across their business. Higher leasing costs, reduced scheduling flexibility, delayed sustainability gains and increased reliance on suboptimal aircraft types are the most obvious challenges. Airlines are missing opportunities to strengthen their top-line, improve their environmental performance and serve customers. Meanwhile travelers are seeing higher costs from the resulting tighter demand/supply conditions. No effort should be spared to accelerate solutions before the impact becomes even more acute,” said Willie Walsh, IATA’s Director General.
As production bottlenecks continue, new challenges and impacts are being revealed:
• Delivery delays are compounded by several factors, including:
o Airframe production is outpacing engine production (which is constrained due to issues with existing engines). This is resulting in newly completed airframes being parked until engines are available.
o Longer timelines for new aircraft certification (from 12-24 months to four or even five years) are delaying entry into production/service, particularly impacting long-haul fleet renewal.
o Tariffs on metals and electronics resulting from US-China trade tensions have worsened some supply bottlenecks and raised some maintenance costs.
o A shortage of skilled labor, especially in engine and component manufacturing, is constraining production ramp-up plans.
o The fragility of the aerospace supply chain network (often reliant on a limited number of suppliers for critical parts) can become an acute constraint amid economic uncertainty, changing tariff regimes and tight labor markets. As a result, even small disruptions can be difficult to resolve and balloon to significant production delays.
• Fuel efficiency improvements are slowing as the fleet ages. Historically, fuel efficiency improved by 2.0% per year, but this slowed to 0.3% in 2025 and is projected at 1.0% for 2026.
• The situation for the air cargo fleet risks evolving:
o Converted aircraft from passenger operations are in short supply as airlines keep them in use for passenger operations longer.
o New-build wide bodies face production delays.
o Older cargo aircraft which have been kept flying longer to compensate for slower fleet renewal will eventually reach hard limits on their useful life.
A recent study by IATA and Oliver Wymann estimated that the cost to the airline industry of supply chain bottlenecks will be more than USD 11 billion in 2025, driven by four main factors:
• Excess fuel costs (~USD 4.2 billion): Airlines are operating older, less fuel-efficient aircraft because new aircraft deliveries are delayed, leading to higher fuel costs.
• Additional maintenance costs (USD 3.1 billion): The global fleet is aging, and older aircraft require more frequent and expensive maintenance.
• Increased engine leasing costs (USD 2.6 billion): Airlines need to lease more engines since engines spend longer on the ground during maintenance. Aircraft lease rates have also risen by 20–30% since 2019.
• Surplus inventory holding costs (USD 1.4 billion): Airlines are stocking more spare parts to mitigate unpredictable supply chain disruptions, increasing inventory costs.
To help expedite solutions, the study pointed to several considerations:
• Open up aftermarket best practices by supporting Maintenance, Repair and Operations (MRO) to be less dependent on OEM-driven commercial licensing models, as well as facilitating access to alternative sourcing for materials and services.
• Enhance supply chain visibility by creating clearer visibility across all supplier levels to spot risks early, reduce bottlenecks and inefficiencies, and use better data and tools to make the whole chain more resilient and reliable.
• Use data more extensively in leveraging predictive maintenance insights, pooling spare parts, and creating shared maintenance data platforms to optimize inventory and reduce downtime.
• Expand repair and parts capacity to accelerate repair approvals, support alternative parts and Used Serviceable Material (USM) solutions, and adopt advanced manufacturing to ease bottlenecks.