IATA expects recovery "to be volatile and weaker than previous recoveries"

IATA released (01-Sep-2009) its Airlines Financial Health monitor for July-August 2009. Details include:

• Financial indicator:
  • Debt and equity: Airlines raised USD3 billion in equity and USD12 billion in new debt since the start of 2009;
  • Fuel costs: Jet fuel prices rose back above USD80 per barrel. The cash impact of higher fuel prices remains negative and "particularly damaging" given passenger/cargo yield declines;
• Demand: Passenger/freight volumes starting to improve, but remain well below levels seen in 2008. Travel stabilising at end of 1Q2009, "but future recovery is likely to be volatile and weaker than previous recoveries". Freight driven by the inventory cycle, stabilising in 1Q2009 and recovering in 2Q2009, "as destocking began to fall";
• Capacity: Capacity cuts slowing, with published schedules suggesting future growth. Parking of freighters/reduction in widebody capacity has cut freight more than passenger capacity;
• Load factors: Passenger load factors stabilised for the first time this year in July, "but could mark a high point for the industry". Air freight load factors are still falling;
• Fleet expansion: 87 new aircraft delivered in July, 12 taken out of service, 18 retired. International fleet expanded by 487 aircraft (2%) this year. Of 1,500 aircraft scheduled for delivery this year, 772 have been taken by airlines. "2009 fleet expansion forecast at 20-25% below previous expectations". [more]