IATA July 2018 Airlines Financial Monitor. Q2 squeeze on profits. Aviation fuel 40percent more expensive than last year

IATA July 2018 Airlines Financial Monitor.

Key points: 
  • The initial Q2 2018 data points to a moderate squeeze on airline profitability compared to the same quarter last year. However, industry-wide cashflow generation increased this quarter compared with Q2 2017.

  • Global airline share prices rose for the first time since January and outpaced developments in the overall global equity index. The improvement in the airline share price index was dominated by North America, with modest gains in Europe & Asia Pacific.
  • Airline shares are still 10percent lower than at the beginning of the year.

  • Oil prices eased slightly again in July, but the upward trend remains in place. Jet fuel prices dipped back below US$90/bbl this month, but remain almost 40percent higher than their level of a year ago.

  • Notwithstanding rising input costs, there are signs of renewed downward pressure on passenger yields. Yields in the less price-sensitive premium-class cabin have generally proven to be more resilient than the economy cabin, despite signs of weakness in May.

  • Passenger demand carried solid momentum into the peak Northern Hemisphere summer period, but freight demand is showing signs of some moderation.
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