ACSA CEO Mpumi Mpofu Highlights Impact of Global Conflicts on Aviation Sector
Airports Company South Africa CEO Mpumi Mpofu highlights impact of global conflicts on aviation sector.
In a candid assessment of the challenges facing the industry, Airports Company South Africa (ACSA) CEO Mpumi Mpofu has revealed how global conflicts, shifting geopolitics, and US tariffs have weighed heavily on the aviation sector and ACSA’s operations during the past financial year. Speaking at the release of ACSA’s annual financial results for the year ended 31 March 2025, Mpofu explained that war zones like Gaza and Ukraine have become no-fly areas, forcing airlines to divert routes and incur significant costs, leading to reduced flights and impacting revenue. Despite these headwinds, ACSA posted a record net profit after tax of R1.1 billion, more than double the previous year’s R472 million, with revenue climbing 13% to R7.9 billion and pre-tax profit reaching R1.8 billion. This strong performance reflects strategic initiatives to navigate economic uncertainties, even as South Africa’s air traffic recovery lags at 92% of 2019 levels compared to the global figure of 9.5 billion passengers. Mpofu also noted declines in Sub-Saharan air cargo and business travel, underscoring the need for resilience in a volatile international landscape.
Global Conflicts and Geopolitical Shifts: A Costly Detour for Airlines
Mpofu highlighted how ongoing wars have disrupted aviation routes, turning conflict zones into restricted airspace that airlines must avoid. “Typically, what happens in the war zones is that they become no-fly zones, and the restriction of aviation above Gaza and Ukraine places an inordinate cost on the aviation and airlines that fly across those regions because they have to divert and go all the way round, avoiding those regions,” she said. This has led airlines to reschedule, reduce, or cancel high-cost flights, directly affecting ACSA’s aeronautical revenue, which saw a decline in the fourth quarter despite expectations of a surge.
The broader geopolitical tensions, including US tariffs imposed on South Africa, are now beginning to bite. “One of the negative impacts that this has had relates to our overall performance on aeronautical revenue, which in the fourth quarter we could have seen a surge, but because of this global economic uncertainty, the fourth quarter on aeronautical revenue was showing a decline,” Mpofu explained. These tariffs, part of wider trade disputes, have compounded issues like supply chain disruptions and increased operational costs, making it harder for airlines to maintain profitable routes to and from South Africa.
In Sub-Saharan Africa, the fallout includes reduced air cargo volumes, slower business travel, and hesitancy in infrastructure investments and cross-border partnerships. Mpofu noted: “We also have seen a decline in the Sub-Saharan region of Africa in air cargo and business travel, and uncertainty in infrastructure investments and cross-border airport partnerships.” This regional slowdown contrasts with global recovery trends, where air traffic has rebounded to 9.5 billion passengers, but South Africa remains at 92% of pre-pandemic 2019 levels, hampered by economic pressures and geopolitical ripple effects. [23]
ACSA’s Record Financial Performance: Resilience Amid Adversity
Despite these challenges, ACSA achieved remarkable financial results for the 2024/25 fiscal year, posting a net profit after tax of R1.1 billion, up from R472 million the previous year. [4] Revenue grew by 13% to R7.9 billion, driven by increased passenger traffic and strategic cost management, while pre-tax profit soared to R1.8 billion. [13] Mpofu attributed this success to the company’s ability to adapt: “In a year of challenges, ACSA delivered solid results, driven by resilience, accountability, and innovation.” [9]
The results reflect a recovery in passenger numbers, with ACSA’s nine airports handling over 36 million passengers in the year, nearing pre-COVID figures. [0] Key hubs like OR Tambo International Airport in Johannesburg and Cape Town International contributed significantly, benefiting from tourism rebounds and business travel. However, the geopolitical impacts tempered fourth-quarter growth, particularly in aeronautical fees from landing and parking charges.
Strategic Initiatives: Navigating Uncertainty and Building for the Future
To counter these pressures, ACSA has rolled out initiatives focused on diversification and sustainability. Mpofu said the company introduced measures to mitigate risks from global disruptions, including partnerships for alternative routes and investments in green technologies. [14] “So very often airlines take a decision to reschedule, reduce the number of flights that are high-cost, or to cancel them and to minimise that impact on their baseline,” she noted, adding that ACSA is working with carriers to optimise operations.
Looking ahead, ACSA plans to enhance infrastructure, with projects like expanding Cape Town International and upgrading regional airports to boost connectivity. [26] The company is also eyeing aerotropolises—integrated economic zones around airports—to drive job creation and growth. [26] These efforts align with South Africa’s broader aviation strategy, aiming for full recovery by 2026 amid global forecasts of strengthened airline profitability in 2025.
Broader Aviation Challenges: From Tariffs to Supply Chain Woes
Mpofu’s remarks echo industry-wide concerns outlined in reports like the Allianz Risk Barometer, which lists tariff wars, cybersecurity threats, and supply chain delays as top risks for aviation in 2025. US tariffs, stemming from trade disputes, have disrupted South African exports like citrus and steel, indirectly affecting air cargo volumes. Conflicts in Ukraine and Gaza have forced route diversions, adding fuel costs and reducing flight frequencies, with IATA estimating global airline profits at $36.6 billion for 2025 despite these hurdles.
In Africa, aviation growth is projected at 5% annually, but challenges like high fuel prices and infrastructure gaps persist. South Africa’s sector, contributing R74.7 billion to GDP and supporting 472,000 jobs, faces additional pressures from domestic issues like load shedding, but ACSA’s results show resilience.
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