*Recent pick-up in prices reflects Opec decision to cut oil supplies and effect of US-imposed sanctions on Iran and Venezuela

Jet fuel prices moved higher for a second consecutive month, averaging around $80 a barrel in February, IATA said and noted the oil price outlook “remains uncertain” on geopolitics.

IATA attributed the uncertain oil price outlook to Opec’s supply cuts and the Venezuela and Iran sanctions on one side and rising shale production in the US and indications of a moderation in global economic activity on the other.

At the time of IATA preparing the report, the price of Brent crude oil hovered around $66-$67 and the jet fuel price was close to $80 – both remain well below the elevated levels seen in early October 2018.

Passenger demand started the year on a positive note, with both seasonally adjusted (SA) volumes and year-on-year growth ticking up modestly compared to a year ago. Meanwhile, the story is less positive on the freight side, with annual growth in industry-wide freight tonne kilometres remaining in negative territory and SA volumes trending downwards, the report said.

Industry-wide revenue passenger kilometers (RPKs) increased by 6.5% year-on-year in February, IATA said.

The seasonally adjusted (SA) upward trend in RPKs also ticked up slightly last month, following the moderation seen over the second half of 2018, but IATA said “it is too early to think that this month’s pick-up represents a sustained shift in the growth trend.”

In contrast to the RPK performance, industry-wide freight tonne kilometres (FTKs) began the new year on a much softer note, currently 1.8% lower than their level of January 2018 and the slowest annual rate of growth in around three years.

In seasonally-adjusted terms, seven of the past 12 months have recorded a fall in month-on-month FTK growth.

Industry-wide available seat kilometres (ASKs) grew by a brisk 6.4% year-on-year in early-2019, the financial monitor showed.

In seasonally adjusted terms, passenger capacity has been trending upwards slightly faster than demand.

Capacity has now risen at an annualised rate of around 5.5% since mid-2018 – around 1 percentage point faster than overall demand over the same period.

Meanwhile, available freight tonne kilometres (AFTKs) rose by a more modest 4% year-on-year in January but nonetheless much faster that the corresponding annual demand growth rate (-1.8%).

Premium-class passengers accounted for a modest 5.2% of the total number of international origin destination passengers over the course of 2018 but a much more significant 30% of total airline revenues. These shares are generally unchanged from 2017, underpinned by a relatively solid economic and demand backdrop, especially in the first three quarters of 2018.

Premium passenger growth over the past year has outperformed its economy counterpart most notably on the Asia-Southwest and North and mid-Pacific markets. These markets also recorded solid gains in premium versus economy fares (top right-hand quadrant). Premium class demand has lagged behind in a number of cases, especially for the South Atlantic and Europe-Middle East markets, IATA said.

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