Improvement in Airlines’ Operational Performance

A significant part of the objectives of the International Air Transport Association (IATA) is to aid its member airlines. IATA helps airlines improve various facets of their operations including safety (through the IATA audit programs – IOSA and ISAGO), flight and ground operations. While the airline share prices have taken a serious hit,┬árecent IATA statistics indicate that their operational performance is steadily improving.

Some key findings:

  • Air travel rose 5.6%% in September, contributing to a strong third quarter and high load factors (percentage of seats occupied). Airlines’ operating profit for the third quarter (based on 25 sample airlines, including 10 North American carriers) rose 3.6% from a year ago to $7.68 billion. That follows a 60% year-on-year decline in the second quarter. Still, airline share prices have fallen about 30% this year as analysts lower their expectations for airline profits, IATA says, citing Bloomberg Airlines Index.
  • Jet fuel prices climbed back to $128 a barrel in late October, 35% higher
    than last year. The fuel cost increase would have added 10% to airline operating costs, but their hedging tactics lowered the impact by about half.
  • The industry worldwide received 98 new jets and turboprops in September, but airlines continue to eliminate older, fuel-inefficient planes. As a result, the pace of seat addition slowed in September to an annualized rate of 4% to 5%.