Oil price rises haunt airlines

GENEVA, 16 March 2015: Worldwide airline share prices fell 3% in February as crude oil prices rebounded from January lows, according to IATA’s latest aviation performance report.

After falling more than 50% by the end of 2014, crude oil prices have rebounded to USD60/bbl, IATA reported.

The rebound in fuel prices has reduced investor optimism about the outlook for airline financial performance.

Airline share prices weakened 3% in all regions during February after share gains of 40% in 2014.

inside no 7However, Q4 financial results show continued gains in the US and signs of a positive turn-around in Asia Pacific.

A sample of 45 airlines showed that the industry financial performance improved significantly when compared to the same period last year. The increase was driven by North American airlines, where consolidation and cost cutting has resulted in a significant boost to profitability.

Net profits for North American carriers were down on a year ago due to significant fuel hedge losses.

Asia Pacific airlines are starting to show signs of improvement on a year ago, reflecting a combination of stronger demand and efficiency gains by some carriers.