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Moody's raises airline industry outlook from negative to stable

8-Jun-2010 11:31 AM

Moody's Investors Service revised its outlook for the global airline industry from "negative" to "stable" on expectations of modest growth in passenger volumes and yields in 2010 and 2011 (MarketWatch, 07-Jun-2010). However, Moody's warned that it could return the industry outlook to negative if the current positive trends are reversed and passenger counts declined markedly or oil prices exceeded USD90/barrel. 

Moody's Investors Service: "We expect profitability in the global airline sector to improve as we gain distance from the 2009 trough of the recession. While a contraction of consumer confidence and still-high unemployment remain risks that could temper improvements in yields, the airlines' careful capacity management, if maintained, should be effective in mitigating these risks," Jonathan Root, Airline Analyst. Source: MarketWatch, 07-Jun-2010.