(Ecofin Agency) - The year 2020 looks bleak for African airlines. According to the International Air Transport Association (IATA), these companies will record a collective loss of $200 million in 2020, a result similar to that expected at the end of the current year.
IATA says the bad performance is due to high government taxes and charges, a low load factor, and operating costs that are twice as high as the average for the global airline industry.
Despite relatively good economic growth in 2019, which is expected to increase in 2020, IATA found that African markets remain extremely fragmented and inefficiently served. This is the consequence of the absence, so far, of a Single African Air Transport Market (SAATM).
However, internationally, IATA expects 2020 to be a better and more stable year than 2019, which was marked by the impact of trade wars. Thanks to the truce, relatively low fuel prices and the weak threat of recession, airlines' revenues are expected to reach $872 billion (+4%) and net income will reach $29.3 billion (+13.13%).