Airlines are notoriously loss making. Sir Richard Branson of Virgin Atlantic is said to have quiped "If you want to be a Millionaire, start with a billion dollars and launch a new airline.".
Profitability in Africa is made worse by:
1. Barriers to trade created by countries to protect their loss making airlines
2. Continued operations by loss making airlines. Loss making airlines like South African Airways and KQ continue to fly because of national pride, protecting jobs and their position in their national economies. KQ brings a lot of additional traffic to JKIA.
3. Business exposure to external factors such as political and natural disasters. For example, TZ bans KQ flights when they feel agrieved politically just like the DRC did to Rwaindair.
4. Huge fixed costs. Though this is a common global problem.
I think ET is the only profitable airline in Africa. I invite you to provide data showing that Rwandair is profitable.
Sources:
It took several years of negotiations for fastjet, a low-cost private airline based in Tanzania, to get the traffic rights to fly between Harare and Bulawayo this July. The flying distance between these two major cities in Zimbabwe is only about 228 miles—a 45-minute trip. Worse still, it had...
www.africanliberty.org
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