IATA: 1Q2018 financial results strong, but share prices down and oil prices are up

    IATA released (09-May-2018) its May-2018 Airlines Financial Monitor. Key highlights include:

    • 1Q2018 initial data indicates a year-on-year pick-up in airline financial performance. The improvement was broad based, with every region except Europe posting a widening in EBIT margin;
    • Airline global share prices fell 4.8% in Apr-2018 and underperformed the wider equity market by the widest margin in 10 months. The decline in Apr-2018 was led by North America, where investor concerns of the impact of rising capacity and fuel prices saw airline shares fall by nearly 12% since the start of 2018;
    • Oil prices rose to their highest level since late 2014 in Apr-2018, driven by tighter market supply and geopolitical tensions. As of 09-May-2018, the Brent crude oil price is around 50% higher than a year ago;
    • Seasonally adjusted trends in passenger and freight demand diverged in recent months. While industry wide passenger capacity is still growing broadly in line with demand, slower freight demand has seen the freight load factor decline recently;
    • Premium cabins accounted for 5.4% of total international origin-destination passenger traffic and just over 30% of revenues for the first two months of 2018, illustrating the importance of the premium cabin for airline finances. [more – original PR]