Global airline share prices up 14% in November, says IATA

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KUALA LUMPUR (Dec 7): Global airline share prices rose 14% in November, supporting by continued decline in the price of crude oil and jet fuel, according to the International Air Transport Association’s (IATA) Airlines Financial Monitor for Oct-Nov 2014.

The financial monitor said airline shares outperformed the broader market by a significant rate, with the FTSE Global All Cap gaining just 1% in November compared to October.

It explained that growth in airline share prices had weakened in Q3 due to a combination of economic slowdown in key regions like the Eurozone and concerns over the spread of the Ebola virus.

“The rise in airline share prices over the past two months reflects continued decline in crude oil and jet fuel price,” it said.

The IATA said crude oil prices were down 36% since the mid-year peak, reflecting appreciation of the US dollar as well as continued growth in supply, particularly in the US.

“Q3 financial results show improvements in the US being partially offset by weakness in other regions;

“US passenger yields remain up on a year ago, but weakness continues in other regions;

The IATA also said air freight volumes continued to expand and the trend in air travel growth remains positive, supported by improving economic conditions in the US and strong trade growth in Asia Pacific

“Growth in available seats fell to an annualized rate of 1%, well below the pace of growth in demand, which should support aircraft utilization rates;

“Passenger load factors weakened slightly in October, but air freight load factors continue to show steady improvement on the back of growth in demand,” said the IATA’s financial monitor.