IATA reports “a robust start to 2016”, with net profits up 12%

IATA reports “a robust start to 2016,” with net profits up 12%

MONTREAL — IATA has released its Airlines Financial Monitor for March-April 2016, which reports that although global airline share prices fell a few notches, Q1 financial results indicate “a robust start to 2016.”

According to the report, global airline share prices dropped by 6.9% during April, ending the month more than 8% below their start-year level. North American airlines saw the biggest month-on-month fall (-12.5%), while European and Asia Pacific airlines saw more modest declines (-3.8% and -3.1% respectively).

The initial financial results from the first quarter of 2016 show a strong, albeit mixed, start of the year for industry profitability. Net post-tax profits from Q1 were 12% higher than in the same period in 2015. The strongest financial results were once again posted by North American airlines, with an operating margin of over 15%.

Other key findings include average global fares in reported U.S. dollar terms (excluding taxes, fees and surcharges) have fallen by around 9% year-on-year so far this year. Airfares are expected to decline further in the near future as prior declines in jet fuel prices feed through. That said, with oil prices up 65% since their January low, the biggest stimulus to demand from lower airfares now appears to be behind us.

Global passenger traffic grew by 7% year-on-year in the first quarter, helped by the fact that 2016 is a leap year. In terms of capacity, there has been a slight acceleration in capacity growth in recent months, with March being the second consecutive month in which annual growth in passenger capacity exceeded that of passenger traffic.