- The initial financial results for Q4 2016 indicate a continued solid performance for the air transport industry, albeit with on-going 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, labour. 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.
