13-Apr-2017 7:34 AM
IATA publishes Financial Monitor for Mar-2017
IATA published (Apr-2017) its Airlines Financial Monitor report for Mar-2017. Key points include:
- Average passenger yields are "showing preliminary indications of having possible bottomed", after falling steadily for around four years;
- Brent crude oil prices fell "substantially" in Mar-2017, ending about 6.4% lower than Feb-2017 at USD52.40 a barrel. Oil prices increased 30% year-on-year, and "are still expected to rise only gradually" over the next two to three years. A "modest" increase in oil prices, to around USD60, is expected "over the coming years";
- Despite an improved performance by European carriers, the latest financial results for 4Q2016 confirm a "modest easing" in industry wide profitability - albeit from historically high levels. IATA however noted margins "remain robust";
- Global airline share prices decreased 1.5% year-on-year in Mar-2017, "unwinding recent gains", with a correction in the North American index more than offsetting modest gains in Europe and Asia Pacific;
- Latin America was the only region with a positive free cash flow outcome, mainly due to a significant drop in capex;
- Premium airfares continue to hold up better than those of the economy cabin, supporting airline finances. Of the top 10 premium markets, in only two (Europe-Asia and North and Mid Pacific) markets did the premium fares underperform economy;
- The momentum passenger and freight demand carried into 2017 "may be starting to wane", however growth "remains strong". IATA said it is "too early to call an end to the strong upwards trend - we will be seeking a clearer signal from upcoming data"
- The industry wide passenger load factor remains steady, while the freight load factor has "eased a little after a strong recovery" in 2016. [more - original PR]