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13-Jul-2018 9:23 AM

IATA: Airline financial data shows profitability strengthening in 1Q2018

IATA released (12-Jul-2018) its Jun-2018 Airlines Financial Monitor. Key points include:

  • Latest airline industry financial data shows profitability strengthening in 1Q2018 compared to 1Q2017, while cash flow generation in the industry also picked up;
  • Global airline share prices fell for the fifth consecutive month in Jun-2018, which indicates that forward-looking investors expect more difficult conditions ahead than was the case in 1Q2018. The global airline share price index has now fallen by 14.3% since the start of 2017, compared to a 1.7% decline in the global equity index;
  • Oil prices have trended upwards since early 2017 and are a key reason why airline shares are underperforming the market. The price of jet fuel is currently sitting just above USD90 per barrel, around 55% higher than the same time in 2017;
  • The global average passenger yield has tracked broadly sideways since early 2017. However, yields in the less price-sensitive premium-class cabin have trended upwards over much of the past year, which reflects the fact that airlines have been able to pass on higher input costs to a greater extent than in the economy cabin;
  • Passenger demand has continued to trend upwards and freight volumes have picked up in the past few months too. A rising passenger load factor is helping to boost unit revenues in the face of the sideways trend in yields. [more - original PR]

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