IATA releases Jun-2016 airlines financial monitor

IATA released (Jul-2016) its Airlines Financial Monitor report for Jun-2016. Key points include:

• The latest financial results continue to point to a "robust" 1Q2016 for industry profitability. Cash flow metrics from 1Q2016 also improved relative to the same period a year ago, despite higher capital investment. EBIT margins increased in all regions compared to 1Q2015;
• The strongest financial results were once again posted by North American airlines;
• Uncertainty following the 'Brexit' vote has taken a heavy toll on airline shares, particularly in Europe - their 24.6% month-on-month fall was the biggest monthly decline since Sep-2001;
• Global airline shares made the worst start to a year since 2008, and have underperformed the wider equity market by 21% so far in 2016;
• Brent crude oil ended Jun-2016 slightly below USD50 per barrel and broadly unchanged from where it started the month. The market still expects prices to remain reasonably low for the foreseeable future (under USD60 per barrel for the next three years);
• Yields have fallen by around 6% year-on-year in constant exchange rate terms in 2016 so far. But with oil prices up more than 80% since Jan-2016, the downward influence on yields from lower oil prices is likely to wane. The global average yield ticked up in seasonally adjusted terms in Apr-2016, but it is too soon to call the end in the recent downward trend;
• Premium airfares have held up better than their economy counterparts on many of the key premium routes so far in 2016, and the segment continues to offer an important buffer for overall airline financial performance;
• The global air passenger market has made a robust start to 2016 this year to date, although demand conditions have eased in recent months and annual growth in traffic remained unchanged at a 16-month low of 4.6% in May-2016;
• With the wider global trade backdrop remaining weak, annual growth in freight volumes dropped to 0.9% in May-2016;
• Rising freight capacity and low freight loads are keeping intense pressure on cargo yields and revenues. [more - original PR]