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IATA reports airline health for January 2017

The International Air Transport Association’s (IATA) has stated that the initial financial results for Q4 2016 indicate a continued solid performance for the air transport industry, albeit with ongoing signs that momentum in the profitability cycle has weakened. The remarks are made in the associations airline health monitor for January 2017.

Global airline share prices began the year on a positive note, rising 1.5% in January and a healthy 6.8% over the past year. However, the industry has lagged the overall performance of global equities on both measures, according to the IATA report.

Brent crude oil prices have been broadly stable around $US55/bbl since the start of December and spent January trading in a tight range. Prices are expected to rise only gradually.

Downward pressure on industry-wide pax yields remains, despite increases in key cost components, particularly fuel and, in some markets, labor. The aggregate, however, masks differences in individual markets.

Both pax and freight demand ended 2016 on a strong note, delivering above-average growth for the year. Likewise, load factors also performed strongly in 2016, with the passenger measure registering a record annual outcome.

Premium airfares continue to generally hold up better than those of the economy cabin, helping to support airline financial performance.

Date: February 14, 2017
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