IATA Airlines Financial Monitor – February 2019

Lauren Eldershaw
By Lauren Eldershaw March 26, 2019 15:35

IATA Airlines Financial Monitor – February 2019

The International Air Transport Association (IATA) has published the February report of the Airlines Financial Monitor.

The latest Q4 2018 financial data indicate that the intense squeeze on industry-wide airline profitability has moderated in the final quarter, with North American carriers seeing much smaller declines in EBIT margin compared to Q3 and Q2.
Airline share price movements were generally muted in February, underperforming the global equity index on both an industry-wide and regional level.

Oil and jet fuel prices both moved higher for a second consecutive month, averaging around US$64/bbl and US$80/bbl, respectively in February. Given OPEC’s supply cuts and the Venezuela & Iran sanctions on one side and rising shale production in the US and indications of a moderation in global economic activity on the other, the oil price outlook remains uncertain.

There was a modest rise in overall base fare yields (excluding ancillaries and surcharges) this month, but the downwards trend remains in place. For the less price-sensitive premium cabin yields, airlines have been able to recover some of the previous rise in fuel and other costs. Guidance on yields for Q1 was positive, at least in the US.

Passenger demand started the year on a positive note, with both seasonally adjusted (SA) volumes and year-on-year growth ticking up modestly compared to a year ago. Meanwhile, the story is less positive on the freight side, with annual growth in industry-wide freight tonne kilometres remaining in negative territory and SA volumes trending downwards.

Virgin Atlantic to fly to South America for the first time
Virgin Atlantic will be launching flights between London Heathrow and São Paulo, Brazil in 2020. Flying daily between London Heathrow and São Paulo Guarulhos International Airport, the 11 hr 55 min flight is Virgin Atlantic’s first foray into the South American continent.

The airline will operate a Boeing 787 aircraft with Virgin Atlantic’s Upper Class, Premium and Economy Delight, Classic and Light offering.

Brazil’s position of being the number one import and export country in South America will also make São Paulo a popular cargo route. With multiple tonnes of capacity each day, Virgin Atlantic expects to carry regular shipments of car parts, pharmaceuticals, food and agricultural products.

Juha Jarvinen, Virgin Atlantic Executive Vice President – Commercial, commented: “2019 marks the start of a new phase of growth for Virgin Atlantic as we work to become the most loved travel company. São Paulo represents an incredible opportunity for our business, and we’re very excited to be flying to a brand new continent for the first time. There are a significant number of corporate customers, and multi-national businesses, located in this Powerhouse of South America who can now enjoy the Virgin Atlantic experience on this busy international route.”

“But it’s not all about business – I’m also thrilled to introduce an exciting new destination to our leisure customers.”
Finance News

Lauren Eldershaw
By Lauren Eldershaw March 26, 2019 15:35