The International Air Transport Association (IATA) projects that African airlines will close the year at an improved net loss position of $500 million about (Rwf373 billion).

The association says lower fuel prices will help airlines to post results of up to $200 million (Rwf150bn) better than last year’s but still remain in loss-making territory.

The air transport body has revised its 2016 financial outlook for the global air transport industry upwards to $39.4 billion from the $36.3 billion announced in December.

"Lower oil prices are certainly helping – though tempered by hedging and exchange rates. In fact, we are probably nearing the peak of the positive stimulus from lower prices,” said Tony Tyler, IATA’s director-general and chief executive.

"In December, our projections were based on the cost of oil being $51 per barrel. Our revised position is based on $45 per barrel and this makes a significant difference,” he said.

Mr Tyler, who was speaking at the AGM’s opening ceremony in Dublin Ireland , added that the industry remains "resilient” even in the event that oil prices rise again, as is currently happening.

He added that some of their members are now paying debt following consecutive years of profits but added that "it will take a longer run of profits before balance sheets returned to full health.”

IATA sees African airlines growing their capacity by 5.3 per cent this year, staying ahead of demand growth which will go up 4.5 per cent.

The association’s earnings projection is good news for carriers such as the national carrier RwandaAir which is on its trajectory to expand its wings to far East and Europe by end of next year.

According to IATA, the main bottlenecks facing African airlines are intense competition from long-haul routes, political barriers affecting intra-Africa traffic, high costs as well as infrastructure deficiencies.

"In addition, many major economies in the continent have been hit hard by the collapse of commodity prices, and this has had an impact on revenues and the inflow of hard currencies,” said IATA.

Agencies