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IATA: Strong final quarter of 2017 for airline industry

IATA: Strong final quarter of 2017 for airline industry

IATA released the January report of the Airlines Financial Monitor today.

The initial airline financial results from the final quarter of 2017 indicate that the industry-wide EBIT profit margin remained broadly unchanged during Q4 relative to the same period in 2016, at a robust 10.7% of revenues.

Global airline share prices rose by 2.9% in January, with increases in Europe and Asia offsetting a modest decline in N.America. The airline index has fallen broadly in line with the global equity market during the early-Feb sell-off.

Industry-wide passenger yields in late-2017 were largely unchanged in year-on-year terms. We forecast passenger yields to rise modestly in 2018 alongside a strengthening in global economic activity and rises in key input costs.

Oil prices rose to a three-year high during January, but fell back sharply in early-February driven by record-high levels of oil production in the US. At the time of writing, the Brent crude oil price is currently around $63/bbl.

Passenger and freight volumes grew by 7.6% and 9.0% respectively in 2017 as a whole and are both carrying solid momentum into 2018. The passenger load factor posted a record high for a calendar year in 2017 (81.4%), while the freight load factor climbed by 2.5 percentage points compared to 2016.

Stronger global trade conditions have helped to support premium-class demand. Premium’s share of total international passenger revenues increased to 27.0% in the first 11 months of 2017, up from 25.9% a year ago.