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The State of the Airline Industry according to IATA’s financial monitor

The state of the airline industry was laid out by IATA, the International Air Transport Association Financial Monitor report for January 2017

The state of the airline industry was laid out by IATA, the International Air Transport Association Financial Monitor report for January 2017

The initial financial results for Q4 2016 indicate a continued solid performance for the air transport industry, albeit with ongoing signs that momentum in the profitability cycle has weakened.

Global airline share prices began the year on a positive note, rising 1.5% in January and a healthy 6.8% over the past year. However, the industry has lagged the overall performance of global equities on both measures.

Brent crude oil prices have been broadly stable around $US55/bbl since the start of December and spent January trading in a tight range. Prices are expected to rise only gradually.

Downward pressure on industry-wide pax yields remains, despite increases in key cost components, particularly fuel and, in some markets, labor. The aggregate, however, masks differences in individual markets.

Both pax and freight demand ended 2016 on a strong note, delivering above-average growth for the year. Likewise, load factors also performed strongly in 2016, with the passenger measure registering a record annual outcome.

Premium airfares continue to generally hold up better than those of the economy cabin, helping to support airline financial performance.