The International Air Transport Association (IATA) has released its July report of the Airlines Financial Monitor, showing Premium services are still an important buffer for airlines against economic downturns.
“The premium segment continues to offer an important buffer for overall airline financial performance. Premium airfares have held up better than their economy counterparts on many of the main premium routes so far this year,” the association states.
- Initial financial results from Q2 2016 point to another solid quarter for industry profitability and cash flow
- Global airline share prices increased by 5.9% in July, but remain well down on where they started the year
- Brent crude oil prices fell back sharply in July, driven largely by a near-term glut in supply. Oil prices now expected to remain below $55/bbl for the foreseeable future
- Yields have fallen by around 6.5% year-on-year in constant exchange rate terms in 2016.
- Ongoing downward pressure on yields is expected to provide further stimulus to demand during the rest of the year.
IATA reports that the global air passenger market showed solid growth in annual terms during H1 2016, but the upward trend has eased in recent months driven by modest economic growth and the cumulative impacts of terrorist attacks.