The International Air Transport Association, IATA Airlines Financial Monitor indicated that the global airline share prices fell by 3.0 percent in May 2016, which have now fallen by nearly 11percent since the start of the year 2016.
According to IATA’s Financial Monitor, the latest financial results continue to indicate a robust Q1 2016 for industry profitability; while Brent crude oil prices broke through the $50/bbl mark at the end of May. Although the market still expects prices to remain at reasonably low levels for the foreseeable future (below $55/bbl until mid-2018).
IATA in their key points indicated that airfares have fallen by around 5percent year-on-year in constant exchange rate terms in 2016 so far. But with oil prices up more than 80 percent since January, adding that the stimulus to demand from lower airfares is likely to fade in H2 2016.
The International Airline body observed that premium airfares continue to offer an important buffer for overall airline financial performance, and have held up better than their economy counterparts on many of the key premium routes so far this year.
The body noted that disruption from the Brussels terrorist attacks weighed on annual growth in air passenger traffic in April, although the global market made a robust start to 2016 this year to date; while annual growth in freight volumes jumped to 3.2percent in April, as the one-off boost to air freight from disruption at US west coast seaports in Q1 2015 dropped out of the annual comparison.
However, rising capacity and low freight loads are keeping intense pressure on cargo yields and revenues, IATA said.