Airlines are facing a further squeeze on profit margins due to higher costs, according to international airline body IATA.’
As a result, share prices fell 10% in December, offsetting a similar rise in November.
IATA’s latest financial monitor, covering the third quarter of the year, reveals airline passenger yields are under pressure, although yields in the less price-sensitive premium cabins are up.
Industry-wide revenue passenger kilometres was up 6.2% year on year in November, but capacity rises of 6.8% have outstripped rising demand, leading to a fall in the industry wide load factor to 80%, which was only the third fall in two years.
IATA warned there are signs that traffic growth is slowing due to a potential slowdown in global economic expansion.
