Airline shares outperform equity market in March 2018
KUALA LUMPUR: Airline shares still outperformed the wider equity index in March 2018, which fell by 2.4 per cent in the month, said the International Air Transport Association (IATA) yesterday.
The trade association of the world’s airlines said airline shares eased 2.0 per cent in March, which is less than that of the equity market.
“Looking through the monthly volatility, airline shares have risen by 22 per cent over the past year, easily outpacing the overall equity market, which was up by almost 13 per cent,” said IATA in its airlines financial monitor for February and March 2018.
Outcomes were mixed at the regional level with North American airline shares dipping by just 0.6 per cent in March, while European and Asia Pacific airlines shares were down 2.0 per cent and almost 4.0 per cent, respectively.
Despite the sizeable decline in March, Asia Pacific airline shares are still a solid 3.2 per cent higher since the start of the year, with their recent performance having been supported by the ongoing robust outcomes in air freight segment.
Industry-wide free cash flows in IATA’s samples of 47 airlines increased to -2.8 per cent of revenue in the fourth quarter of 2017, up from -6.7 per cent in the same period a year earlier.
IATA said the outcome reflected a combination of both an increase in net cash flow from operations to 10.8 per cent of revenue, from 8.4 per cent and a moderate decline in capital expenditure spending (to 13.6 per cent of revenue, from 15.1 per cent.
Oil prices rose in March, recovering some of the ground lost in February.
“Although jet fuel prices were largely unchanged this month, both oil and jet prices are currently around 30 per cent higher than their level of a year ago,” said IATA.