US carriers outperform other regions

Worldwide airfares have fallen 2% this year, leading to a drop in profits for airlines.

The International Air Transport Association (IATA)’s Airlines Financial Monitor for May and June 2012, shows that only carriers in the US region are ‘managing to maintain higher yields with strong load factors’.

Apart from in the US, Q1 profits were significantly down on a year ago, due to higher fuel prices earlier in the year, and a drop in demand.

Fifty-five airlines surveyed by IATA indicated a combined net loss of $1bn.

European airlines are experiencing even larger losses than in Q111.

The report adds: ‘Air travel continued to expand through the second quarter, though there were signs of softness in May traffic, while seasonally adjusted air freight levels are still above the lows of late 2011.’

‘Global airline share prices held ground in June, but underperformed other industries despite a sharp fall in fuel prices.’

Fuel prices fell further in June, down $30 a barrel since the peak in Q1.

To read the report in full, click here.