IATA: Air passenger growth remains solid, yields have stabilised

IATA released (06-Sep-2013) its airlines financial health monitor for Jul/Aug-2013. Highlights include:

• Worldwide airline shares fell 6% in Aug-2013, underperforming the market as crude oil and jet fuel prices rose. In the US and Europe airline share prices are well above levels a year ago, reflecting improvements in financial performance. The opposite is true for airlines in Asia Pacific;
• 2Q2013 financial results show solid improvement in profits in the US and Europe, but a decline in Asia Pacific, reflecting the importance of cargo and persisting regional weakness;
• Jet fuel prices reached USD130/bbl in Aug-2013 as geopolitical developments raised concerns over supply disruptions. Prices have also received a boost from more optimistic views on oil demand growth in the months ahead, with positive economic indicators from the US and an end to the Eurozone 18-month long recession;
• Air freight markets continue to improve modestly as downward pressure from advanced economies eases. Factors supporting the current improvement in air freight volumes remain shaky;
• Air passenger growth remains solid, up 5% in Jul-2013, supported largely by performance in emerging markets. There was a contraction in global RPKs month-on-month, but this was an adjustment to recent growth acceleration;
• Capacity continues to expand, but at a moderated rate as growth in new aircraft deliveries slows. Growth in capacity has been strong during most of 2013, largely in line with traffic expansion, keeping load factors high. The rate of expansion is strong and aircraft utilization rates could come under downward pressure if the current easing trend does not continue;
• Passenger load factors remain high despite a slip in Jul-2013, and air freight loads stabilised but at low levels. Solid growth in demand has supported load factors and ensured stability over the period;
• Passenger yields have stabilised in local currency terms and remain close to year ago levels.