Global Airlines Financial Monitor: December 2016

The latest round of financial results from Q3 2016 underlined another solid quarter for industry financial performance, but there are ongoing signs that momentum in the profitability cycle has weakened;
Global airline share prices outperformed the global equity market in H2 2016. This outperformance was driven mainly by North American shares, on renewed optimism that such airlines can stabilize unit revenues in 2017;
Brent crude oil prices have been broadly stable around $US55/bbl since the start of December. A rebalancing in the oil market is slowly taking place, but prices are expected to trend upwards just modestly from here;
The intense downward pressure on yields has eased since earlier in 2016, but the trend is still pointing downwards;
Premium traffic growth lagged behind that of its economy counterpart on most key routes in 2016, but premium airfares generally held up better. The premium segment remains a key buffer for airline financial performance;
Annual growth in passenger volumes accelerated to its fastest pace in nine months in November, with the seasonally-adjusted load factor rising to a record high;
November’s data underlined a strong 2016 peak season for air freight, with freight volumes up 6.8% year-on-year. The freight load factor has recovered partly in recent months from its early-2016 low.