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13-Oct-2017 8:28 AM

IATA reports overall small moderation in airline industry profitability

IATA released (12-Oct-2017) its Airlines Financial Monitor for Sep-2017. Key points include:

  • 2Q2017 airline financial data shows the year-on-year decline in profit margins was "quite small for the industry in aggregate" and masked strong increases in the case of European and Latin American carriers. North American airlines achieved the widest profit margins, albeit slightly narrower than 2016;
  • Industry wide RPKs grew by 7.2% year-on-year in Aug-2017. 2017 is on course to be another year of above trend RPK growth. The seasonally adjusted (SA) upward trend in RPKs has moderated. The SA passenger load factor remains at a historically high level. Industry wide ASKs increased by 6.3%;
  • Global freight volumes posted double digit annual growth for the fifth time in six months in Aug-2017 (+12.1%). AFTKs grew by 4.7% and the SA freight load factor rose to a three year high;
  • Industry wide passenger yields posted positive, if very modest, year-on-year growth in Jul-2017. This is the second consecutive month of yield growth. Passenger yields have continued to trend higher at an annualised rate of around 3.5%;
  • Global airline share prices rose by 0.9% in Sep-2017, driven by a gradual recovery in the North American index following two sharp monthly declines. By contrast, European and Asia Pacific airline shares both fell modestly;
  • Oil prices have trended higher in recent months, reflecting supply constraint on the part of OPEC and Russia, as well as a weaker US dollar. The price of Brent crude rose to a 26 month high of USD58.50 per barrel during Sep-2017;
  • Stronger global trade conditions are helping to support demand for premium class travel, particularly to/from Asia. Premium's share of passenger revenues rose to 26.3% in the first seven months of 2017, from 26.0% a year ago. [more - original PR]

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