IATA airlines financial monitor – August 2014

Worldwide airline share prices rose 3% in August compared to July, slightly ahead of the broader market on further easing in fuel prices


air freight airlines financial monitor August 2014 IATA International Air and Transport Association jet fuel


IATA, the International Air and Transport Association, released the latest airlines financial monitor. Here are the key points:

–          Worldwide airline share prices rose 3 per cent in August compared to July, slightly ahead of the broader market on further easing in fuel prices;

–          Initial Q2 financial results show strong gains for US airlines’ performance, but declines in Asia Pacific due to cargo revenue weakness and cost pressures for Chinese carriers from the depreciating Yuan;  

–          Jet fuel prices eased slightly in August as a weakening demand outlook pushed crude oil prices down to a 15-month low;   

–          US passenger yields are up after declines in Q1, but weakness continues in other regions;   

–          Air travel volumes continue to expand steadily and air freight demand recorded a solid increase in July, supported by improving conditions in Asia, including a rebound in trade volumes;   

–          Expansion in available seats moderated in July, but continues to exceed growth in demand;  

–          Passenger load factors fell on the back of strong capacity expansion, but air freight load factors have now reversed recent declines.

Airlines earn a majority of revenues in Q2 and Q3, so the expectation is for solid results at this time of year. IATA’s sample of 50 airlines shows that airlines were also able to improve financial performance on the year ago period, at both the operating and net profits levels. The improvement has been driven by the performance of North American airlines. By contrast, in Asia Pacific, a combination of weakness in cargo revenues as well as rising cost pressures for Chinese carriers due to a depreciating local currency have had negative impacts on regional financial performance.