IATA: Airline profits continue to fall in 1Q2019; passenger growth and yields also easing

    IATA, via its Airlines Financial Monitor for Apr-2019, reported (20-May-2019) the following key airline financial highlights for 1Q2019:

    • Initial financial results indicate a further year-on-year fall in aggregate profits for the airline industry. The outcome is mixed at the regional level, with broad stability in North and Latin America, improvement in Asia Pacific but a significant weakening in Europe, although the sample so far is small;
    • The global airline share index outperformed the wider equities market in Apr-2019 with better than expected earnings outcomes and earnings guidance in some regions. However, the global airline index has lagged the wider equity market since the beginning of 2019 (a 7.2% vs 15% increase in the first four months) as investors were concerned about Brexit uncertainty and the cost increases driven by higher oil prices and the Boeing 737 MAX grounding;
    • Oil and jet fuel prices climbed again in Apr-2019, driven by the ending of US sanction waivers on Iranian oil imports. The Brent crude oil price is now around USD72 per barrel (36% higher than the end of 2018) as a result of increased tensions in the Middle East;
    • Global base fare passenger yields continued to decline in Feb-2019, with both premium and economy cabin yields under pressure;
    • Annual growth in industry-wide RPKs eased to 3.1%, the weakest annual outcome since early 2010;
    • Freight volumes grew 0.1%, following a sharp annual fall of 4.9% in Feb-2019. [more – original PR]