Zimbabwe exorbitant airlines taxes comes under spotlight

Zimbabwe is among African countries imposing high taxes and statutory charges on airlines, with the heavy cost burden threatening the long-term viability of the aviation sector, Airlines Association of Southern Africa (AASA) chief executive officer Aaron Munetsi has warned.

Speaking at a regional aviation conference in Harare on Wednesday, Munetsi said governments across Africa were increasingly treating the aviation industry as a source of revenue instead of recognising it as a catalyst for trade, tourism and economic growth.

He said taxes, levies and statutory charges were significantly eroding airline profitability.

"If a passenger pays US$100 to fly from Harare to Bulawayo, up to US$31 goes directly to government taxes, fees and charges," Munetsi told delegates.

"From what remains, airlines still have to pay for fuel, aircraft maintenance, staff, insurance, leasing costs and airport services."

He said the financial pressure had left African airlines earning an average profit of just US$0.30 per passenger, highlighting the fragile economics of operating on the continent.

"Today, as we speak, the profitability for an African airline has come down to US$0.30," he said.

"If you have got US$0.30 in your pocket and you buy an orange or a cup of tea, you are actually at the same level as what an airline in Africa makes right now."

Munetsi warned that any further increase in taxes or statutory charges could push already struggling airlines into financial distress.

"If you add one more dollar in terms of taxes, you are sinking that airline. They will never recover," he said.

He noted that aviation fuel alone accounts for about 35 percent of airlines' operating costs, leaving carriers with limited capacity to absorb additional expenses or reduce airfares.

Quoting research by the International Air Transport Association (IATA) and the African Civil Aviation Commission (AFCAC), Munetsi said aviation taxes, fees and charges across Africa are approximately 49 percent higher than the global average.

While acknowledging Zimbabwe's investment in upgrading airport infrastructure to attract tourists, investors and international airlines, he argued that modern airports alone would not improve competitiveness if operating costs remained among the highest on the continent.

Munetsi urged Southern African countries to accelerate regional air transport integration by treating the Southern African Development Community (SADC) as a single domestic aviation market.

"In America, 80 percent of their traffic is domestic. So what if suddenly we started making SADC a domestic market?" he said.

"Suddenly, Fastjet has got access to 340 million customers. Suddenly, Air Zimbabwe has got access to 340 million customers."

He said Africa accounts for roughly 20 percent of the world's population but generates only about 2 percent of global air traffic, attributing the disparity to restrictive aviation policies, fragmented markets and high operating costs rather than a lack of demand.

Munetsi's remarks come as Zimbabwe continues implementing reforms aimed at improving the ease of doing business and attracting greater investment into key sectors of the economy, including aviation.