The financial performance of airlines fell by five per cent in August compared to July, according to the International Air Transport Association (IATA), but the industry is doing significantly better compared to the same time in 2014.
The association announced the news in its August report of its Airlines Financial Monitor, where it sampled the balance sheets of 58 airlines across the industry.
The combined net post-tax profit of the carriers’ after the second quarter of this year was $8.7 billion, nearly double the $4.4 billion after the second quarter last year.
IATA says that the performance of carriers’ has been improving strongly up to the middle of the year. “The increase was driven by North American airlines, where consolidation and lower fuel costs have resulted in a significant boost to profitability.
“Airlines in Asia Pacific were also up on a year ago supported by cost-cutting measures and easing fuel cost pressure. Airlines in Latin America, by contrast, struggled with falling yields and recession in the major economy Brazil,” IATA notes.
The association also explains that performance on the stock markets has declined, and share prices fell five per cent in August compared to July.
These prices were dragged down by the fall in the broader market, which IATA says was down by six per cent over the month.
“Globally, markets were impacted by developments in the Chinese economy. China’s stock market experiencing its largest one-day fall in August since 2007 has increased concerns about further slowdown in the economy. Airlines in Asia Pacific were most impacted, with a fall of 15 per cent in August compared to July. In the previous month, airline share prices rallied in response to a fall in fuel prices,” IATA explains.
Finances were also affected by crude oil prices, which fell in August, pushed down by expectations of supply rises from Iran and the US and a softer demand outlook. Oil prices are down by 58 per cent on the 2014 highs.
