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IATA: Premium airfares continue to hold up better than economy

IATA: Premium airfares continue to hold up better than economy

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IATA Issued their  April report of the Airlines Financial Monitor.
Key points in the report includes:

  • Global airline share prices rose by 2.5% in April, partly reflecting expectations that the squeeze on margins will diminish. The monthly increase was driven by European airlines, with modest increases in Asia Pacific and North America.
  • The initial financial results from Q1 2017 highlight the extent that airline profit margins were squeezed in the opening months of the year by a combination of higher costs and weak yields.
  • Brent crude oil prices fell sharply in mid-April, and dropped below US$50/bbl in early-May for the first time since the end of November. Forward markets still expect oil prices to rise only gradually over the next 2-3 years.
  • Passenger yields remain well below their level a year ago, but there are ongoing signs that the long-standing downward trend in the seasonally adjusted series may be bottoming out.
  • Passenger and freight demand growth has made a strong start to 2017. The passenger load factor remains steady close to a record high level, while the freight load factor has recovered back to levels last seen in early-2015.
  • Premium airfares continue to hold up better than those of the economy cabin, supporting airline finances.

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