2-Feb-2017 11:55 AM

IATA: European carriers show best EBIT margin performance across all IATA regions in 3Q2016

IATA released (Jan-2017) its 'State of the Region Monitors: Europe' review of regional economics and airline performance. Key highlights include:

  • Economics:
    • Business confidence in main European countries, "Generally moved higher" in Jan-2017. IATA noted the UK's Purchasing Managers' Index (PMI) was at its highest level in a two year period, while both Russia and the Eurozone reported five year highs;
    • The RUB increased 6% year-on-year (y-o-y) in Dec-2016, while the GBP and TRY both "eased further" to be down by around 20% y-o-y;
  • Passenger market:
    • European RPKs reached a nine month high growth rate of 7.6% y-o-y in Nov-2016. IATA stated this was preceded by a "modest easing" of +5.8% in Oct-2016, and the recovery was due to European carriers appearing to have, "Adjusted to the disruption caused by terrorism and political instability;
    • RPKs within Europe increase 8.4% y-o-y in Nov-2016;
    • Russia registered a notable RPK increase of 15.5% y-o-y in Nov-2016;
    • RPKs between Europe and the Middle East increased 9.8% y-o-y in Nov-2016;
  • Overall European industry performance:
    • European carriers have increased both passenger and freight capacity by more than the overall industry rate over the past year. For passengers, ASKs of the European airlines have grown by 7.1% y-o-y compared to the global average of 6.5%;
    • European carriers recorded an 80.1% load factor in Nov-2016, eclipsing the global average of 78.9%;
    • Passenger yields for Nov-2016:
      • Within Europe: -9.4% y-o-y;
      • Russia domestic: -2.5% y-o-y, slipping back into negative after +13% in Oct-2016;
      • Europe-North America: -13.3% y-o-y;
      • Europe-Asia: -10% y-o-y;
      • Europe-Middle East: -12.4% y-o-y;
      • Europe-Africa: -12.6% y-o-y;
      • Europe-South America: -11.4% y-o-y.
      • Passenger yields for the main European markets are now all lower than Nov-2015 levels. Most yields are in or very close to double-digit decline, reflecting recent exchange rate movements;
    • 3Q2016 financials show a strong operating (EBIT) margin performance of 18.5% by the European carriers - currently the strongest across all IATA regions. [more - original PR]

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