Global Airlines Financial Monitor: March 2018

The final data for Q4 2017 confirms the stabilisation in airline financials in 2H17. The industry-wide EBIT profit margin was a robust 8.7% of revenues in Q4 2017 – effectively unchanged from Q4 2016.
The broad-based global equity market sell-off in March also impacted airline shares, although the 2% decline for airlines was less than the market generally (down 2.4%). Looking through the monthly volatility, airline shares have risen by 22% over the past year, easily outpacing the overall equity market (up almost 13%).
Oil prices rose in March, recovering some of the ground lost in February. Although jet fuel prices were largely unchanged this month, both oil & jet prices are currently around 30% higher than their level of a year ago.
As the 2018 Lunar New Year disruption in the data clears, both passenger and freight demand remains robust. Industry-wide capacity is now growing broadly in line with the pace of demand growth.
The premium cabin accounted for 5.3% of total international origin-destination passenger traffic but almost 30% of revenues in January, highlighting the importance of the premium cabin for airline finances.