IATA: Fall in airline profit margins slowed in 4Q2018

IATA reported (17-Apr-2019) the following key highlights from its Mar-2019 Airlines Financial Monitor:

• 4Q2018 data confirm that the fall in profit margins slowed compared to 3Q2018. The outcome is mixed at the regional level. North America and Asia Pacific carriers recorded less intense profit squeeze, but the trend was opposite for European carriers, which did not benefit from falling oil prices due to high hedging ratios. Initial 1Q2019 information indicates an improvement for North America profit margins but less so for Europe;
• Global airline share price developments underperformed the wider equities market in Mar-2019 amid uncertainty about jet fuel price developments and the direction of industry profitability;
• OPEC supply cuts and US sanctions on Venezuela and Iran pushed crude oil and jet fuel prices higher in Mar-2019. Crude oil is around USD71 per barrel while jet fuel is close to USD84 per barrel, in both cases the highest level since Nov-2018;
• Global base fare yields eased in Jan-2019, after a short lived improvement in Dec-2018. With premium cabin yields ticking up modestly, the difference between the premium and economy cabin yields continues to widen further in early 2019;
• Annual growth in industry wide RPKs moderated to 5.3% year-on-year in Feb-2019, down from 6.5% in Jan-2019. For freight, volumes were 4.7% lower, the weakest outcome of the past three years. [more - original PR]