IATA: Global Aviation Enterprises Cost Rise and Profit Decline Year on Year

According to the latest financial data survey report released by IAA, airlines'profits in the first quarter of 2019 fell further compared with the same period last year due to uncertainties in Britain's de-Europe, rising fuel prices and rising costs caused by the Boeing 737 Max flight accident. Pre-interest and pre-tax profit margins fell by 0.5 percentage points to 3.6% compared with the same period last year.

The preliminary sample survey conducted by IAA for 20 Airlines shows that airlines'profits declined in the first quarter of this year and their performance in Europe became weaker. Four European Airlines participating in the survey lost $651 million in net profit after tax in the first quarter, and their profit margin before interest and tax fell by 6.0%; North America showed stable performance and eight North American Airlines showed net profit after tax in the first quarter. Profits were $1.462 billion, with a pre-interest and pre-tax profit margin of 6.4%. Profits in the Asia-Pacific region improved, with net after-tax profits of $506 million and pre-interest and pre-tax profit margins of 5.0% for four airlines in the Asia-Pacific region in the first quarter.

In April 2019, the share price of global airlines rose by 3.9% annually and decreased by 9.0% year-on-year. Global airline shares rose 7.2% from the beginning of the year to the end of April. Airline shares rebounded after Britain delayed its exit from Europe, with some airlines reporting better-than-expected first-quarter results. Share prices of airlines in North America (up 9.5% annually) and Europe (up 5.0% annually) have risen sharply, boosting the growth of global airlines'share prices annually. However, due to the impending bankruptcy of Jet Airlines in India and the trade war between China and the United States, the share price of Asia Pacific Airlines continued to decline by 2.8%.

Brent crude oil and aviation oil prices rose for five consecutive months. Average prices of Brent crude oil and aviation oil rose again in April after the United States ended its sanctions exemption on Iranian oil imports. At present, Brent crude oil prices are about $72 per barrel and aviation oil prices are about $85 per barrel, the highest level since November last year. Influenced by the intensification of tensions in the Middle East, the interruption of crude oil supply is worrying, and the rising price of aviation oil has led to a sustained increase in operating costs of the industry.