IATA's review of third quarter financial results show an improvement in airline performance, but the rebound was not strong enough to reverse the association's previous prediction of an $11 billion loss for the year.
Airline equity prices in October were up 15% for the year, IATA explains. But that still only values world airlines at 50% of their 2007 highs. Carriers also raised US$2.5 billion in cash since late November, but IATA points out the majority was achieved through debt transactions.
Carriers also gained some pricing leverage as IATA explains that average fares increased in August as higher load factors drove a shrinking of the availability of lower fare categories.
Yields still remain under pressure, but the declines are improving. During the second quarter premium fares were down 25%, but by August the decrease slowed to 15%.
IATA explains that cyclical pressures are starting to pull average fares and yields up from mid-year lows. But what remains unclear is "the extent to which there has been a structural reduction in premium fares, because business travellers are buying economy tickets or corporate buyers have improved their bargaining position".
A slow recovery continues in demand as IATA states both air travel and freight volumes have regained levels last seen at the end of the collapse in late 2008. Traffic in October increased 0.5% as freight volumes decreased by the same amount.
"However, both markets have only recovered half the loss suffered during 2008," IATA cautions. Travel has risen 6% from first quarter lows, but remains 5% below early 2008 levels.
Despite continued capacity reductions aircraft deliveries in October remained at roughly 100, IATA explains, as a net 40 aircraft were removed from service and placed into storage.
"Even if the storage figures underestimate some of the aircraft being parked it still seems the aircraft fleet is expanding, despite continuing efforts to cut seat and freight tonne kilometre capacity," says IATA.
The association estimates seat and freight tonne capacity fell by 5% and 9% respectively in 2008, and airlines cut seat capacity by a further 1.7% this year as freight tonne capacity declined an additional 4.6% in 2009.
Source: Air Transport Intelligence news
