Airline Shares Dip As Fuel Costs Rise

Worldwide airline shares fell six per cent due to concerns over oil supply from the Middle East, said the International Air Transport Association (IATA) in its ‘Airlines Financial Monitor’ for August. Jet fuel prices reached $130 per barrel in August as political tension in Syria created concern over the supply of oil from neighbouring Iraq and Iran. However, while the share figures underperform the market, 2Q figures for the UK and US are up on last year. Passenger growth rose five per cent in July - largely due to emerging markets - yields stabilised in local currency terms and load factors remained high despite a dip in July. “Capacity continues to expand, but at a moderated rate as growth in new aircraft deliveries slows,” IATA explained. Air freight markets show modest improvement and loads have stabilised but at low levels.

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