12-May-2016 10:02 AM

IATA: Oil stimulated demand from lower airfares may be over, premium airfares holding up better

IATA released (11-May-2016) its Airlines Financial Monitor for Apr-2016:

  • Global airline share prices fell by 6.9% in Apr-2016 erasing the gains seen during the first two months of the year
    1Q2016 financial results released so far indicate a "robust overall start" to 2016 for industry profitability;
  • Oil prices rose to a six-month high at the end of Apr-2016, although the market still expects prices to stay below USD50 per barrel until into 2018;
  • IATA estimates that airfares fell by around 4% in constant exchange rate terms in early-2016. However, with oil prices up 65% since their Jan-2016 low, the biggest stimulus to demand from lower airfares "now appears to be behind us";
    • Premium airfares held up better than those in economy on many of the key premium routes so far in 2016, and premium traffic continues to offer an important buffer for overall airline financial performance;
  • The global air passenger market enjoyed a robust start to 2016 during 1Q2016, bolstered, in part, by the leap year;
  • Passenger load factors came in unchanged in year-on-year terms in Q1 2016, but have slipped in recent months;
  • After a one-off boost to air freight owing to disruption at US west coast seaports in Q1 2015, air freight volumes fell 2.1% year on year in 1Q2016. Freight load factor dropped by 3.8 ppts. [more - original PR]

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