Global airline share price index has fallen by 14.3% YTD, says IATA

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KUALA LUMPUR (July 13): Global airline industry profitability was strengthening in Q1 2018 compared to the same quarter a year ago, while cash flow generation in the industry also picked up, according to the International Air Transport Association (IATA).

In its June 2018 Airlines Financial Monitor released yesterday, IATA said global airline share prices fell for the fifth consecutive month in June by 6.4%, which indicates that forward-looking investors expect more difficult conditions ahead than was the case in Q1.

It said the global airline share price index has now fallen by 14.3% since the start of the year, compared to a 1.7% decline in the global equity index.

IATA said oil prices have trended upwards since early-2017 and are a key reason why airline shares are underperforming the market.

It said the price of jet fuel is currently sitting just above US$90/bbl – around 55% higher than it was a year ago.

“The global average passenger yield has tracked broadly sideways since early-2017.

“However, yields in the less price-sensitive premium-class cabin have trended upwards over much of the past year, which reflects the fact that airlines have been able to pass on higher input costs to a greater extent than in the economy cabin,” it said.

IATA said passenger demand has continued to trend upwards and freight volumes have picked up in the past few months too.

It said a rising passenger load factor is helping to boost unit revenues in the face of the sideways trend in yields.