Key Points:

· Global airline share prices fell by 6.9% in April, erasing the gains seen during February and March;

· The financial results released so far from Q1 indicate a robust overall start to 2016 for industry profitability;

· Crude oil prices rose to a six-month high at the end of April, although the market still expects prices to stay below $50/bbl until into 2018;

· We estimate that airfares fell by around 4% in constant exchange rate terms in early-2016. However, with oil prices up 65% since their January low, the biggest stimulus to demand from lower airfares now appears to be behind us;

· Premium airfares have held up better than those in economy on many of the key premium routes so far this year, and premium traffic continues to offer an important buffer for overall airline financial performance;

· The global air passenger market enjoyed a robust start to 2016 during Q1, bolstered, in part, by the leap year. Passenger load factors came in unchanged in year-on-year terms in Q1 2016, but have slipped in recent months;

· After a one-off boost to air freight owing to disruption at US west coast seaports in Q1 2015, air freight volumes fell by 2.1% year-on-year in Q1. The freight load factor in Q1 2016 dropped by 3.8 percentage points compared to the same period in 2015, and this is keeping intense pressure on cargo yields.