Global Airlines Financial Monitor: March 2017

Despite an improved performance by European carriers, the latest financial results for Q4 2016 confirm a second quarter of modest easing in industry-wide profitability – albeit from historically high levels.
Global airline share prices fell by 1.5% in March, unwinding recent gains, with a correction in the North American index more than offsetting modest gains in Europe and Asia Pacific.
Brent crude oil prices fell substantially in March, ending ~6.4% lower, at $US52.40/bbl. Oil prices are 30% higher compared with a year ago and are still expected to rise only gradually over the next 2-3 years.
Although still well down on their year-ago level, average passenger yields are showing preliminary indications of having possible bottomed, after falling steadily for around 4 years.
The momentum that passenger and freight demand carried into 2017 may be starting to wane, although the data are always more volatile at this time of the year. The industry-wide passenger load factor remains steady at historical record highs, while the freight load factor has eased a little after a strong recovery in 2016.
Premium airfares continue to hold up better than those of the economy cabin, supporting airline finances.