GLOBAL AIRLINE INDUSTRY SEES ROBUST Q4 2017 EARNINGS

KUALA LUMPUR, Malaysia The global airline industry saw robust earnings before interest and tax (EBIT) profit margin of 8.6 per cent of revenues in the fourth quarter of 2017 (Q4 2017) broadly unchanged compared with the same period in 2016.

The International Air Transport Association (IATA) said the industry’s performance reaffirmed signs that industry profitability stabilised in the second half of 2017 from the weakness seen earlier in the year.

The industry-wide results masked a modest decline in operating margins for North American and European carriers, offset by an increase in Latin America and a marginal improvement in Asia Pacific, it said in the January-February 2018 edition of its Airlines Financial Monitor released today.

On global airline shares, IATA said share prices fell broadly in line with global equities during the market sell-off in early February 2018, but rebounded to a greater extent over the second part of the month, driven by gains in the Asia Pacific index.

In respect of industry-wide passenger yields, it said yields were currently trending broadly sideways.

We continue to forecast passenger yields to rise moderately in 2018 alongside a robust global economic backdrop and increases in key-input costs, including crude oil and labour costs, IATA said.

It also said crude oil prices fell back from recent highs in February, alongside wider volatility in financial markets and rising crude oil production levels in the United States, but Brent crude oil prices remained around 16 per cent higher than a year ago.

On passenger volumes, IATA said temporary factors, including the later timing of this year’s Chinese New Year, contributed to a slower year-on-year growth in passenger volumes in January 2018.

However, the bigger picture is that both passenger and freight traffic carried momentum into 2018, it added.

IATA said premium-class cabin accounted for 5.3 per cent of total international origin-destination passenger traffic in 2017, and contributed 27.2 per cent of total international revenues, up from 25.9 per cent in 2016.

Premium-class demand has been supported by stronger global trade activity, it said.

Source: NAM News Network