Moody’s: Global airline industry outlook remains stable; fuel costs and capacity to be key to upcoming earnings trend

Moody’s Investors Service is maintaining its stable outlook on the global airline industry, reflecting the rating agency’s expectations of declining but still-strong operating margins relative to the sector’s historical levels. Moody’s projects the aggregate operating margin of rated airlines to approach 9% in 2017 and about 8% in 2018, from a projected 10.8% in 2016. This trend reflects declines in operating profit of the rated airlines of about 11% in 2017 and about 12% in 2018, widening from a projected 1.2% contraction in 2016. These rates of change fall within Moody’s -20% to 20% range for a stable outlook. “US