The growth in available airline seats slowed considerably in September, down to a 0.2% rate of increase compared to August, the International Air Transport Association’s (IATA) latest ‘Airlines financial monitor’ shows.
Although new aircraft deliveries went up in September (132), compared to August (120), there was a net increase in storage activity over the period, from 23 in August to 51 in September, IATA said.
The growth in the number of seats slowed to a 2.5% annualised rate in September, which is well below the current growth in demand and should help boost loads and aircraft utilisation rates.
Passenger load factors slipped slightly in September after reaching a record high in August – 80.6% on a seasonally adjusted basis. The small decline in seasonally adjusted load factors resulted from a stronger pick-up in capacity compared to demand. But generally, over the past several months, load factors have been improving due to gains on domestic markets.
Cargo load factors were broadly stable in September, supported by the expansion in FTKs. Air freight load factors have been in decline since Q1 2015, down to levels not seen since mid-2009, on a seasonally adjusted basis, it said.
According to IATA, there was a slight 0.2% increase in passenger capacity in September compared to August. Carriers in all regions experienced capacity expansion on international markets, while on domestic markets there was some contraction in available seat kilometers (ASKs) in Brazil, the US and Australia.
Air freight capacity growth ticked up in September compared to August, expanding 0.6%. But looking over the past several months, the trend in available freight tonne kilometers (AFTKs) growth has been strongly positive for much of 2015, in contrast to developments in demand volumes.
It showed airline financial performance has been improving overall so far this year. An initial sample of some 23 airlines shows that the industry financial performance improved significantly on the year ago period in Q3, 2015.
The increase was driven by North American airlines, where consolidation and lower fuel costs have resulted in a significant boost to profitability. But airlines in Asia Pacific and Europe were also up on a year ago, supported by cost cutting measures and easing fuel cost pressure.
Airline share prices were up 9% in October compared to September. Broader equity markets were also up, supported by the low interest rate environment and rebounds in the Chinese stock market.
But airline shares outperformed the broader market, with the FTSE Global All Cap rising 7% over the same period.
The strong rise in airline share prices was supported by robust Q3 financial results as well as continued low fuel prices. Airline share prices in all major regions were up in October, but rose most in the US, with an increase of 12% over the month.
