12-Jun-2013 1:08 PM

IATA: Passenger markets are robust, freight demand stabilising after earlier declines

IATA released (11-Jun-2013) its airlines financial monitor, including the following key indicators of airline financial strength:

  • Financial indicators: Airline share prices up 15% so far this year, outperforming world equity markets, with a 2% gain in May-2013 compared to Apr-2013. First quarter results show operating profits are continuing to improve across most regions. The results indicate solid performance at the operating level, compared to a year ago, with USD500 million of operating profit and all regions except Latin America up at an EBIT level compared to a year ago;
  • Fuel costs: Fuel prices were stable in May-2013, after a significant drop in Apr-2013. Prices fell by USD25 per barrel in Apr-2013 compared to the most recent peak in Feb-2013. Current price levels - averaging USD115 per barrel in May-2013 - are at the lowest since mid-2012. The recent easing in crude oil prices results mostly from new supply, largely due to contributions from the US, as well as a slowdown in demand growth in 1Q2013 compared to the end of 2012;
  • Demand: Passenger markets “continue to increase robustly”, with global RPKs up almost 5% in Apr-2013 compared to a year ago – in line with the historical trend. Freight volumes were flat in Apr-2013, after two consecutive months of contraction;
  • Capacity: Growth in capacity has accelerated over the past six months, but for the most part airlines have kept ASK growth in line with the acceleration in demand. In Apr-2013, ASK growth slightly exceeded demand, but load factors remain close to record levels. Growth in seats is accelerated in Apr-2013, as aircraft come out of storage, despite a decline in new aircraft deliveries. Passenger load factors remain high but freight loads have weakened further. Airlines in Africa saw the largest improvement in load factors, as the slowdown in ASK growth seen over the past year continues;
  • Yields: Passenger yields turned up during the last quarter of 2012, and have shown improvement in 2013, consistent with stronger traffic demand and higher load factors. Global fares in US dollar terms continue to trend lower. [more - original PR]

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