IATA: Passenger yields starting to weaken in early 2Q2015

IATA issued (13-May-2015) its Airlines Financial Monitor for Mar/Apr-2015. Key highlights include:

• Worldwide airline share prices fell 1.5% in Apr-2014. Declines in fuel costs, which had provided a boost to airline share prices in late 2014, are being offset by the strengthening US dollar. Values are still up 23% on a year ago;
• Crude oil prices rallied in April/May-2015, up 20% on the Mar-2015 low. The recent increase in oil prices has largely come as a result of changes in supply conditions, as growth in inventories slows in the US;
• Initial 1Q2015 financial results show continued gains in the US, where consolidation and cost cutting has resulted in a significant boost to profitability and lower fuel costs, and a positive turn-around in the Asia Pacific. Chinese carriers have recorded solid 1Q2015 profit results, owing to strong demand and improved operational efficiency;
• Passenger yields in the US have started to weaken and fares in other regions fell further, reflecting downward pressure from earlier declines in fuel related costs as well as exchange rate distortions;
• Air transport volumes continued to expand robustly, as FTKs volumes moderate after the Feb-2015 spike;
• Growth in seats rebounded in Mar-2015, but remains below expansion in volumes;
• Air freight load factors continued sideways trend in Mar-2015 as passenger loads start to improve;
• Despite lower oil prices, airlines have been increasing capacity at a slower rate than growth in demand. [more - original PR]