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8-Jun-2010 11:31 AM

Moody's raises airline industry outlook from negative to stable

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.