IATA: Profits grow in third quarter but momentum weakening

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The airline industry had a solid third quarter with profits up on the same period last year but there are signs the momentum for profitability has weakened, the International Air Transport Association (IATA) says.

In its Airlines Financial Monitor December 2016, IATA says third quarter (Q3) profits are up to $13.3 billion compared to $12.8 billion in 2015, with Asia-Pacific seeing particularly strong growth, Latin America making a profit but North America seeing a slowdown.

Profits in Asia Pacific grew from $584 million in Q3 2015 to $2.4 billion while Latin America turned its 2015 $522 million loss into a $206 million profit. North American profits fell from $6.9 billion to $4.8 billion, while Europe remained steady at $5.7 billion.

IATA says: “The latest round of financial results from Q3 2016 underlined another solid quarter for industry financial performance, but there are ongoing signs that momentum in the profitability cycle has weakened.”

Brent crude oil prices have remained stable at around $55 a barrel, and “prices are expected to trend upwards just modestly from here” IATA says.

Airfreight has seen a strong peak season with freight tonne kilometres growing 6.8 per cent in November, and capacity growth has slowed to 4.4 per cent, mainly due to fewer widebody passenger aircraft deliveries, particularly in Asia Pacific.