IATA releases Dec-2016/Jan-2017 Airlines Financial Monitor

IATA released (Feb-2017) its Airlines Financial Monitor for Dec-2016/Jan-2017. Key highlights include:

• Initial financial results for 4Q2016 indicate a continued solid performance for the air transport industry, albeit with ongoing signs that momentum in the profitability cycle has weakened;
• Global airline share prices began 2017 on a positive note, rising 1.5% in Jan-2017 and a healthy 6.8% over 2016. However, the industry has lagged the overall performance of global equities on both measures:
• • Asia Pacific index rebounded strongly, up 7% in Jan-2017, after a 3% fall in Dec-2016;
  • European airlines gained another 3.5%, building on the (similar) Dec-2016 performance;
  • North American index unwound some of the 7% surge in Dec-2016, slipping back by almost 2% in Jan-2017.
• Brent crude oil prices have been broadly stable around USD55 per barrel since the start of Dec-2016 and spent Jan-2017 trading in a tight range:
• • Despite the rebalancing in the oil market that is now underway, financial markets are still only pointing to a modest and gradual rise over the next two to three years. Oil prices are expected to remain below USD60 over this period.
• Downward pressure on industry-wide passenger yields remains, despite increases in key cost components, particularly fuel and, in some markets, labor. The aggregate, however, masks differences in individual markets;
• Both passenger and freight demand ended 2016 on a strong note, delivering above-average growth for the year. Likewise, load factors also performed strongly in 2016, with the passenger measure registering a record annual outcome;
• Premium airfares continue to generally hold up better than those of the economy cabin, helping to support airline financial performance. [more - original PR]