IATA released (20-Jul-2010) its Airline Business Confidence Index Jul-2010, which showed a majority of respondents, across all regions, reported improvements during 2Q2010 and expect either stability or further improvement over the next 12 months. IATA upwardly revised its 2010 industry loss forecast from USD2.8 billion to USD2.5 billion in Jun-2010. Confidence about further improvements in profitability over the next 12 months remains high while the outlook for further yield improvement also remains strong – attributable to strong demand, returning premium traffic and high load factors. Meanwhile, more than 80% of respondents reported passenger and cargo growth in 2Q2010 while 80% expect passenger growth over the next 12 months and 74% expect cargo traffic growth over the next 12 months. [more]
IATA releases Airline Business Confidence Index Jul-2010
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Periodically speculation arises over the potential opportunity for a low cost airline to break into Peru’s market. The country’s growth prospects certainly warrant examination of stimulative opportunities in Peru, but so far the country lacks a true low cost airline.
Monarch Airlines: group receives new cash from Greybull Capital but profit outlook is down
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Nevertheless, Monarch continues to face significant challenges. Europe's short/medium-haul markets are feeling significant downward pressure on unit revenue – particularly in the leisure markets that Monarch serves. This is due to overcapacity and concerns about terrorism in key Monarch markets. Brexit and the sharp devaluation of GBP (it has fallen by 30% against the EUR over the past 12 months) are further challenges for the LCC.
Although Monarch quickly quashed rumours of its financial difficulties in late Sep-2016 and then secured new funds, its commentary indicated that its profit for the year to Oct-2016 would be lower than in the previous year. It has an uneven track record of profitability and has often flown with close to empty cash reserves. Those reserves have been partially replenished, but only sustainable improvements in profitability will avoid the need for further cash calls in the future.