In a country where more than 70 percent of people live on less than $3.65 a day, Ethiopia is planning something extraordinary. The government wants to build the largest airport on the African continent — a facility so ambitious that it would rival some of the world’s biggest aviation hubs.
The new Bishoftu International Airport, located about 45 kilometres southeast of Addis Ababa, is projected to cost $10 billion and handle up to 110 million passengers a year at full capacity. That would put it ahead of London’s Heathrow, which handled about 83 million passengers in 2023.
For a country whose GDP can’t rival even the city of London, the ambition is staggering.
The project is being driven by Ethiopian Airlines, a state-owned carrier that has quietly become one of the world’s most profitable airlines. The airline is funding 20 percent of the project itself and is seeking the remaining $7.8 billion from external creditors.
The African Development Bank (AfDB) has already committed to anchor $500 million in financing, a move that has given the project a degree of credibility among international lenders.
The new airport, designed by Dubai-based engineering firm Sidara, will feature four runways and is scheduled for completion in 2029. That timeline, if met, would give Ethiopia a facility that dwarfs anything currently operating on the continent.
The contrast with Ethiopia’s existing Bole International Airport could not be clearer.
Bole, which currently handles around 25 million passengers a year, was once ranked Africa’s third-busiest airport. But Ethiopia’s leaders are not thinking in terms of today’s numbers. They are betting that Addis Ababa, already one of the continent’s main aviation crossroads, can become something closer to a global hub. Ethiopian Airlines already operates one of the most expansive route networks in the world, flying to more destinations across Africa than any other carrier.
If you want to get from Accra to Nairobi, chances are you fly through Addis Ababa.
East African leader catch an airport fever
But Ethiopia isn’t the only East African nation with airport on its mind. Kenya, Rwanda, and other nations in the region are all spending billions on either building a new airline facility or upgrading their old ones.
There is also a political dimension that cannot be ignored. For African governments, airports are symbols of modernity and national prestige. A new, world-class airport signals to voters that their leaders are big on infrastructure projects.
Across East Africa, governments are spending at a scale that would have seemed unthinkable a decade ago.
In June, Kenya signed a 154.2 billion Kenyan shilling ($1.2 billion) deal with China Road and Bridge Corporation to modernise Jomo Kenyatta International Airport (JKIA) in Nairobi. The plan is to nearly triple the airport’s annual capacity, from 7.5 million passengers today to 22 million.
A new terminal building will be constructed, existing infrastructure modernised, and both airside and landside operations improved. It is one of the largest infrastructure contracts Kenya has signed in years.
The road to this deal was not smooth.
Kenya had originally tried to do the same thing through a public-private partnership with India’s Adani Group, a conglomerate controlled by billionaire Gautam Adani. That $2.5 billion deal, which would have given Adani a 30-year lease to operate the airport, sparked public protests, an airport workers’ strike, and a court challenge.
When Adani was indicted in the United States on bribery charges in late 2024, Kenya’s President William Ruto cancelled the deal entirely. The new contract with the Chinese state-owned firm is smaller in scope but more straightforward — a construction job, not a concession.
Rwanda on its part is pursuing the same logic but with an even more striking partner. The country is building the Bugesera International Airport, about 25 kilometres from Kigali, in a joint venture where Qatar Airways holds a 60 percent stake.
The project is expected to cost around $2 billion in total and will handle 7 million passengers annually in its first phase, rising to 14 million by 2032.
As of mid-2025, construction was only about 25 to 30 percent complete, and the deadline has already slipped from 2026 to 2028. In its 2025/26 national budget, Rwanda allocated $485 million to the project — a commitment that accounts for 1.5 percent of the country’s entire GDP in a single year.
The scale of spending is remarkable for a landlocked country with limited natural resources. The International Monetary Fund has already warned that the cost of the Bugesera airport will push Rwanda’s public debt to 86.3 percent of GDP by 2026 — a figure that would alarm most finance ministries. Rwanda’s finance minister defended the borrowing, arguing that the country is investing in assets rather than consumption. That may be true. But it also means that if the passengers and the revenues do not materialise as planned, Rwanda will be carrying a heavy debt load for a facility that cannot pay for itself.
Taken together, these are no small bets. They are, in total, a significant share of the combined national budgets of these countries, redirected toward aviation infrastructure in a region where many people have never boarded a plane.
The land may be closed, but the sky is wide open
To understand why East African leaders are making these bets, it helps to look at a map, or perhaps the sky.
Ethiopia has no coastline. Rwanda and Uganda are also landlocked, entirely dependent on road and air connections to reach the world’s major markets.
For these countries, aviation is not a just luxury. It is, in many ways, the only realistic pathway to deep integration into global trade and commerce. A truck driving goods from Kigali to the port of Mombasa can take days and face multiple border delays, checkpoints, and unreliable roads.
A cargo flight to Dubai or Frankfurt takes hours and faces none of those obstacles.
Countries like Nigeria or Tanzania can ship goods via sea at relatively low cost. For Ethiopia, Rwanda, and Uganda, the cost of moving goods overland to a port eats into whatever price advantage their products might have.
Coffee, flowers, and fresh vegetables — which Ethiopia, Kenya, and Rwanda all export in large quantities — are particularly time-sensitive. They lose value rapidly in transit.
For these products, air freight is not just convenient, it is often the only commercially viable option. Every improvement in airport capacity and connectivity directly translates into more exports and higher revenues for farmers and traders.
There is also a regional integration argument. East Africa is home to around 500 million people, spread across some of the world’s fastest-growing economies.
As incomes rise and a middle class emerges, demand for air travel is expected to climb sharply. The IATA projects that Africa’s passenger traffic will grow at around 6 percent annually in 2026, outpacing every other region such as Europe and America.
Governments building airports today are, in theory, positioning themselves to capture that growth before their neighbours do. The problem, however, is that the market reality is considerably messier.
Make it rain from the sky the Dubai way
Every government in East Africa building or expanding an airport has, at some level, been inspired by Dubai. The story of Dubai International Airport is one of the most remarkable in modern business history.
In 1985, Dubai was a modestly sized Gulf trading post. Its airport was handling a few million passengers a year. Then the government of Sheikh Mohammed bin Rashid Al Maktoum made a series of extraordinary bets: build a world-class airport, create a world-class airline (Emirates), abolish visa requirements for dozens of countries, and invest heavily in hotels, shopping malls, and tourism infrastructure. The results were transformational.
By 2024, Dubai International Airport had become the world’s busiest international airport, handling more than 88 million passengers. Emirates became one of the most profitable airlines on earth. The airport itself became an engine of economic growth, drawing in tourists, traders, logistics companies, and financial services firms from around the world.
The lesson that African leaders drew from Dubai is straightforward: build it and they will come.
If you create world-class airport infrastructure, airlines will add routes, passengers will arrive, trade will follow, and the economy will transform. Rwanda’s finance minister essentially used this argument to justify the Bugesera debt load. Kenya’s government made the same case when defending the JKIA expansion to a skeptical public. The model looks seductive enough to generate political support. After all, few leaders would turn down the promise of Dubai-like prosperity
But here is the catch: the conditions that made Dubai’s airport strategy work are almost entirely absent in East Africa.
Dubai sits at the intersection of three of the world’s most heavily travelled air corridors: Europe to South Asia, Europe to Southeast Asia and Australia, and North America to Asia via polar routes. It sits roughly equidistant between many of the world’s largest population centres. A traveller flying from London to Mumbai, or from Frankfurt to Singapore, can stop in Dubai with only a modest detour. That geographical advantage is irreplaceable and cannot be replicated by any East African city, however well-governed. Addis Ababa is a good transit point for African destinations, but it is not on the natural path between Europe and Asia the way Dubai is.
Dubai also had something else: oil money. When Sheikh Mohammed began building his airport city in the 1990s, Abu Dhabi’s oil revenues were underwriting the UAE government’s finances. Dubai could afford to run its airport and airline at a loss for years while waiting for the network effects to build.
None of the East African governments currently building airports have that kind of financial cushion. Ethiopia is still recovering from a civil war. Kenya is carrying a heavy debt load from earlier infrastructure projects, including the Standard Gauge Railway. Rwanda, as the IMF has noted, is already stretching its fiscal limits.
There is also the question of the underlying economy. Dubai’s airport revenues are not primarily driven by airport fees and passenger charges. They are driven by the enormous retail, hospitality, and real estate economy that grew up around the airport. The duty-free shopping at Dubai International generates more revenue than most African airports generate in total.
According to aviation economist and chief analyst at aviation consultancy OAG, Dr. John Grant, airport infrastructure alone rarely creates a revenue hub. “Airports do not generate demand by themselves.”
“The most successful aviation hubs combine geography, strong home carriers, liberal aviation policies, and large volumes of connecting traffic.” In East Africa’s case, the challenge is not simply building bigger terminals but attracting enough airlines and passengers to justify them.
East African cities are growing fast, but they do not yet have the retail or tourism ecosystems that would allow an airport to generate the non-aeronautical revenues that make big hubs financially viable.
The pie in the sky may need some grounded numbers
Moreover, the core challenge facing every East African airport expansion is simple: the passengers are not yet there in sufficient numbers to justify the investment, and when they do fly, the economics are brutal.
Africa as a whole accounts for just 2 percent of global air passengers, despite being home to 17 percent of the world’s population. Africa’s total passenger traffic in 2025 was around 273 million, a number that sounds large until you compare it with a single region: the Asia-Pacific handles more than 3.6 billion passengers a year.
East Africa’s share of that already thin African market is a fraction of the total. Nairobi’s JKIA, before the planned expansion, handled about 7.5 million passengers per year — roughly what London Heathrow handles every six weeks.
The structural problem is not simply that people are poor, although low incomes do suppress demand. The bigger problem is that flying in Africa is shockingly expensive relative to incomes, and much of that cost is driven by governments themselves. Passengers in Africa pay an average of $68 in taxes, fees, and charges on international departures, compared with about $30 in Europe and $34 in the Middle East.
Taxes and levies make up 35 to 40 percent of ticket prices in Africa, compared with a global average of about 20 percent. Airport charges in Africa run 12 to 15 percent above global norms. Building a bigger airport does not break this cycle on its own.
The profitability numbers are equally sobering. African airlines are expected to earn just $1.30 in net profit per passenger in 2026, compared with a global average of $7.90 and more than $28 in the Middle East. The combined net profit of all African airlines in 2026 is projected at around $200 million — a figure that represents less than the cost of a single aircraft for a major carrier.
These are not margins that encourage airlines to add routes aggressively, buy new planes, or invest in the service standards that attract premium travellers. An airline earning $1.30 per passenger cannot easily offer the kind of product that fills a new terminal with passengers willing to spend money in duty-free shops and airport restaurants.
Cargo tells a slightly more optimistic story, but even there the fundamentals are challenging. Africa’s cargo volumes grew by an impressive 16.6 percent in 2025, the fastest rate in the world. But the base is still very small. Africa’s share of global air cargo remains well below its population or economic weight. The types of goods Africa exports by air — flowers, vegetables, and seafood — are relatively low-value and highly competitive. Building enormous cargo terminal capacity does not automatically attract the electronics, pharmaceuticals, and high-value manufacturing exports that make cargo hubs like Memphis or Frankfurt so valuable.
The scale of the mismatch between supply and projected demand is illustrated by a single number.
Rwanda’s new Bugesera Airport is designed to handle 7 million passengers in its first phase. Rwanda’s entire population is around 14 million people. At current income levels, the vast majority of those people will never board a plane. The airport is betting almost entirely on transit passengers and international visitors — people passing through Kigali on their way to or from somewhere else. That is not an unreasonable bet,but it is a very specific bet. And it depends on airlines actually choosing Kigali as a hub rather than routing passengers through Addis Ababa, Nairobi, or Johannesburg instead.
Airport revenues cannot justify the budget allocation
The financial case for these airport expansions faces a fundamental arithmetic problem.
Airports generate revenue from two main sources: aeronautical charges (landing fees, terminal fees, and passenger taxes paid by airlines and travellers) and non-aeronautical income (retail, parking, hotels, and advertising).
In mature markets with high passenger volumes, non-aeronautical revenue often exceeds aeronautical revenue and is the main driver of profitability. Heathrow makes enormous sums from its shops and restaurants. Changi Airport in Singapore is as famous for its retail experience as it is for its flights. These revenues depend on large numbers of passengers with money to spend in airports.
East African airports are nowhere near that model. The numbers at JKIA illustrate the gap. The airport handles roughly 7.5 million passengers a year and generates revenues that, even after the planned expansion to 22 million passengers, would take many years to service a $1.2 billion loan at commercially viable interest rates.
Kenya’s plan to borrow up to $780 million and put in $390 million in equity is designed to leverage future revenues from the airport. But those future revenues depend on passengers materialising in numbers that do not yet exist. The model assumes that capacity creates its own demand — a belief that sometimes proves true, but not always.
Rwanda’s situation is even more acute. The IMF has warned explicitly that the Bugesera project will push public debt to 86.3 percent of GDP by 2026, and that risks of cost overruns on large infrastructure projects need to be carefully managed. The airport’s initial budget was $1.3 billion; it has already risen to $2 billion, a 54 percent increase before the facility has even opened. Rwanda’s finance minister has pushed back the country’s target for reaching a sustainable debt-to-GDP ratio from the original timeline to 2033. That is a significant fiscal sacrifice for a country that has worked hard over two decades to build a reputation for sound public financial management.
There is also the question of what else these governments could buy with the same money. Kenya’s $1.2 billion on JKIA is equivalent to the annual healthcare budget of a country with millions of people who lack access to basic medical services. Airport projects tend to generate excitement and ribbon-cutting ceremonies. The opportunity costs tend to receive less attention.
“The question is not whether an airport can pay for itself through landing fees alone,” Hannah Ryder, founder of Development Reimagined and a specialist in African infrastructure financing, said in a statement. “The question is whether it unlocks trade, tourism, investment, and jobs at a scale that justifies the public cost.”
This contradiction sits at the heart of the East African aviation model, and it is not one that any government has yet convincingly resolved.
If dreams were airlines, East African would fly
The future of East African aviation will be decided by two forces: the pace at which incomes rise and liberalisation advances, and the discipline with which governments manage the costs and expectations tied to their new airports.
The good news is that both are moving in the right direction, even if slowly. IATA projects that Africa’s passenger market could reach 411 million travellers annually by 2044, the third-fastest growth rate in the world.
The Single African Air Transport Market, a continent-wide liberalisation initiative that has 38 member states, is gradually opening up routes and reducing the restrictive bilateral agreements that keep fares high. Rwanda’s visa-on-arrival policy and open-sky agreements have already helped Kigali punch above its weight as a destination.
In addition, Ethiopian Airlines is the region’s most compelling case for optimism. It has achieved something that almost no other African airline has managed, which is sustained profitability. If any airline can fill a 110-million-passenger airport, Ethiopian Airlines probably has the best chance. But even Ethiopian Airlines operates in a continent where African airlines collectively earn $1.30 per passenger, compared with $28.60 for Middle Eastern carriers.
There is nothing inherently wrong with bold infrastructure bets. But the size of the bets being made in East Africa, relative to the size of the economies making them, deserves more scrutiny than these projects typically receive. The ribbon-cutting ceremonies will come. The harder question — whether the economics will follow — will take many more years to answer.
