Moody’s: Stable 2018 outlook for global airlines and aircraft leasing sector

    Moody’s maintained (11-Dec-2017) its stable outlooks for global airlines and aircraft leasing, as well as the global shipping and North American railroads, under its 2018 outlook for the global transportation sector. Key highlights include:

    • Global airline industry’s stable outlook is driven by projections for 8.5% to 10% operating margins for Moody’s-rated airlines through 2019, with US carriers remaining the most profitable. Moody’s projects industry revenue will grow by about 4%, offsetting higher labor and fuel costs. Moody’s VP – senior credit officer Jonathan Root said: “Steady global economic growth will support rising demand for air travel over the next 12 to 18 months. Developing countries will continue to lead capacity growth, followed by Europe and the US.”
    • Aircraft leasing industry will see stable net interest margins of 8% to 9% over 2018, though competition from new entrants will limit the upside. Global air travel growth is currently tracking about two ppts above its long-term trend of around 4.5%, with capacity expansion remaining in line with growth in demand. [more – original PR]

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