4-Nov-2009 11:00 AM
IATA sees threat to recovery in fares and yields; danger of renewed capacity increases
IATA released (03-Nov-2009) its airlines financial monitor for Sep-Oct-2009. Key points include:
- Financial indicators:
- Stronger capital markets allowed airlines to raise USD8 billion in new funds in past two months;
- Airlines equity prices moved in line with market in Oct-2009, Asian carriers outperformed, while US airlines underperformed;
- Early results for 3Q2009 show an improvement in financial performance, but IATA maintained its 2009 industry loss forecast of USD11 billion.
- Fuel costs:
- Oil hit USD85 per barrel in mid-Oct-2009, the year-on-year advantage of lower fuel prices is disappearing;
- Further rises expected by futures markets;
- Travel volume growth positive in Sep-2009 (+0.3%), first positive figure in a year;
- Seasonally adjusted RPKS are 5% higher than 1Q2009 lows, but still down 6% on early 2008 levels;
- FTKs up 12% over Dec-2008 low, but remain 17% below early 2008 levels.
- IATA questions whether capacity restraint will continue, as published schedules suggest some increase;
- Load factors on international services returned to levels and pattern seen in 2007;
- Aircraft utilisation down 3% for narrowbodies and 4% for widebodies;
- Marked improvement in Sep-2009 freight load factors, moving back towards pre recession levels;
- New aircraft deliveries again exceeded 100 in Sep-2009, 911 new aircraft delivered this year, with 213 retired and 156 in storage;
- Commercial aircraft fleet expanded overall by 2%.
- Still very weak, but more favourable than in 2Q2009;
- Load factors returning to pre-recession levels, leading to a rise in average fares;
- Pace of yield improvement is slow and levels remain well down on 2008;
- Low levels of aircraft utilisation and planned deliveries suggest a threat to fares and yields.