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With a 4 percent fall in global airlines’ shares in December compared to November 2013, aviation fuel, known as Jet A-1 prices continue to rise, especially in December before easing slightly in early January.
But compared to the start of 2013, worldwide airline shares are up 21 percent driven by United States and European carriers, according to the International Air Transport Association (IATA).
Tony Tyler, director general of IATA however noted that the third quarter (2013) financial results show a solid improvement in airline profits on a year ago, particularly in the US and Europe.
“Jet fuel prices eased slightly in January, but remain within range of past 3 years, despite supply improvements; Air freight markets picked-up in November on a rise in international trade, but passenger growth moderated.
“Growth in available seats increased slightly to 4 percent, as the net number of aircraft entering storage declined but passenger load factors are now slipping from earlier highs as capacity growth moves ahead of demand; air freight loads, by contrast, have finally started to improve and are now above levels of a year ago”, he said.
He disclosed in the financial analysis released by IATA that passenger yields moderated in the US in Q4, but showing weakness in most other regions.
“Taking a longer term view, worldwide airline shares are up 21 percent compared to the start of 2013, with US and European airlines seeing the strongest gains (78 percent and 48 percent) from significant improvements in financial performance. The opposite is true for Asia Pacific airlines, where shares have fallen 9 percent compared to the start of 2013.
“But Q3 financial results indicate that airlines are continuing to improve financial performance in most regions. The industry normally generates a majority of its profits in Q2 and Q3 so strong results are expected. But the sample of 61 airlines shows operating and net profits are up overall compared to the year ago period.
“North American airlines have improved most, reflecting the benefits of restructuring and consolidation. Performance of airlines in Asia Pacific remains down on a year ago, hampered by cargo market weakness”, he added.
In terms of air freight market, Tyler explained that growth in air travel volumes has slowed recently, but the outlook remains broadly positive adding that key demand drivers, including rising business confidence and a pick-up in world trade growth, suggest acceleration in air travel growth in months ahead.
“Growth so far this year compared to a year ago is still solid, above 5 percent|”, he noted.
By: Sade Williams
