9-Oct-2013 12:11 PM

IATA: Industry 2Q2013 financial results show solid improvement in profits

IATA released (07-Oct-2013) its ‘Airlines Financial Monitor’ for Aug/Sep-2013. The association outlined the following key points:

  • Worldwide airline shares rose 11% in Sept-2013, outperforming the market as crude oil and jet fuel prices eased. Airlines in all regions saw share prices improve. The US airline share price index has almost doubled compared to a year ago, reflecting better financial performance, while profit weakness in the Asia-Pacific has seen regional airline shares rise just 6% on a year ago;
  • 2Q2013 financial results show solid improvement in profits. The most significant improvement occurred in North America, where airlines are seeing the benefits of structural changes and consolidation. European airlines have managed to turn year-ago losses into profits. The Asia-Pacific, by contrast, saw financial performance decline on a year ago, reflecting the importance of cargo and persisting regional weakness;
  • Jet fuel prices fell back below USD130/bbl in Sep-2013, as concerns over supply disruptions lessen;
  • Air freight volumes continue to rise modestly as advanced economy indicators show further improvement. Air freight markets are benefiting from improvements in the demand environment, especially airlines in the Middle East and Europe. AFTK growth has been accelerating, due to additional belly capacity in the passenger fleet. The expansion in air freight capacity has mostly outdone any improvements in demand, keeping load factors low;
  • Air passenger growth remains strong, up 6.8% in Aug-2013, with all regions experiencing solid growth. Growth in demand has outstripped the rise in passenger capacity. Passenger load factors picked up in Aug-2013, after recent weakness in domestic loads;
  • Overall capacity continues to expand, but at a moderated rate as the number of aircraft leaving storage declines;
  • Passenger yields have improved in the US but show weakness globally due to declines in the Asia-Pacific. Global fares, measured in USD, continue to trend downward. This is partially a result of weakness in passenger yields in the Asia Pacific region, but it also reflects distortions from exchange rate effects and the exclusion of fuel surcharges and ancillary revenues. [more – original PR]

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