Airline profits in North America and Europe saw significant improvements while Asia declined and South America increased its losses in the third quarter of 2015, the International Air Transport Association (IATA) says.
In its December 2015 Airlines Financial Monitor, IATA says the 77 sample airlines made a net post-tax profit of $12.9 billion in the third quarter of 2015 compared to $9.4 billion in 2014. North American airlines almost doubled their profits from $3.9 billion in the third quarter of 2014 to $6.9 billion in 2015 while European profits rose from $4.2 billion to $5.5 billion. Airline profits in Asia-Pacific fell from $1.4 billion in 2014 to $940 million in 2015 due to weak cargo volumes while Latin America increased its losses from $88 million to $530 million.
IATA says: “The improvement was driven by carriers in the US and Europe. In Asia, by contrast, Q3 profits are down on a year ago, mostly reflecting weakness in cargo volumes and yields. Similarly, airlines in Latin America continue to struggle with falling yields and recession in major economy Brazil.”
IATA says airline share prices increased by three per cent in December compared to November, helped by further falls in fuel prices. Crude oil prices ended the year at about $38 a barrel, lows not seen since 2005, due to excess supply and weak demand. The December price was $27 a barrel below the mid year peak, and brought the year average down to $54 a barrel.
The association comments: “The recent lows in crude oil prices reflect expectations of supply increases from producers like Iran, as well as no clear signal that OPEC will reduce production.”
“In addition, the demand outlook has weakened with slower than expected global economic growth, especially in key economies like China.”
