Global Airlines Financial Monitor: November 2017

The latest financial data show that the industry-wide profit margin remained broadly unchanged in Q3 compared to a year ago, at a robust 15.7% of revenues. All regions except North America posted annual increases in profitability.
Underlying industry-wide passenger yields have trended broadly sideways over the past 12 months or so. An increase in the US dollar, as well as weather-related disruption, have both influenced recent yield developments.
Global airline share prices increased by 4.6% in November – the biggest monthly gain since May – driven by a strong increase for North American airlines. Airline shares have outperformed the wider market over the past year.
Oil prices rose to a 17-month high of more than US$64/bbl during November, in anticipation of the recent agreement by OPEC and Russia to extend oil production cuts until the end of next year.
Once again, passenger and freight volumes both posted robust year-on-year growth in October, but the seasonally adjusted (SA) upward trends in each of the series have eased. The passenger load factor posted a record-high for the month of October (80.8%), while the SA freight load factor is maintaining levels last seen in late-2014.
Despite an ongoing spread in performance at a route level, stronger global trade conditions are continuing to support premium-class demand on markets to, from, and within the key manufacturing region of Asia.