Airline finances improve in 1st qtr except in Europe

* Asia-Pacific, Latin American airlines back in net profit

* Most except Europeans show operating profit too

GENEVA, June 3 (BestGrowthStock) – Airline finances rebounded
strongly in the first quarter of this year, as a strong increase
in cargo and passenger demand far outweighed extra capacity from
new planes, the industry association IATA said on Thursday.

The recovery in airline performance seems to have resumed in
May after disruption to flights from the volcanic ash cloud
emanating from Iceland and economic concerns hit share prices,
particularly for European carriers, the International Air
Transport Association said in its airlines financial monitor.

A sample of 50 of IATA’s 230 member airlines saw net
post-tax losses halve to $2.0 billion in the first quarter of
this year from $4.1 billion a year earlier, while operating
losses shrank to $447 million from $2.9 billion.

Strong improvements were recorded in all regions except
Europe, where net losses deepened, with airlines in the sample
from Latin America and the Asia-Pacific moving back into net
profit reflecting stronger economic recovery in those areas.

IATA noted that first-quarter financial results are always
weak for seasonal reasons, and airlines typically make 80
percent of their earnings in the second and third quarters.

“This year there were signs of a significant improvement in
all regions at the operating level, though Europe stands out as
the weakest performer — even before the impact of the ash
plume,” IATA said.

It said there was little reason for jet kerosene prices to
break out of the $80-100 per barrel range they have held for the
past six months, as ample inventories were likely to outweigh
the impact of any resurgence in economic optimism.

Prices fell back during May as the Greek sovereign debt
crisis raised uncertainties about the strength of the recovery.

The pace of improvement in passenger load factors — a
measure of capacity usage — slowed in March and April but it
remains near records when seasonally adjusted. However further
capacity utilisation gains will be hard over the rest of the
year as a further 1,340 aircraft are delivered, it said.

But higher load factors for both passengers and freight are
allowing fares to rise, with premium fares now rising by about
10 percent a year and economy fares at half that, indicating
stronger market conditions.

IATA forecast in March that the industry would lose $2.8
billion this year after $9.4 billion in 2009, with the crisis
taking accumulated losses over the past 10 years to $50 billion.
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IATA, whose members include British Airways (BAY.L: ),
Lufthansa (LHAG.DE: ) and Singapore Airlines (SIAL.SI: ), will
unveil a revised forecast on June 6 at an air transport
conference in Berlin.

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(For full IATA monitor go to http://link.reuters.com/byg97k )
(Reporting by Jonathan Lynn; Editing by Jon Loades-Carter)

Airline finances improve in 1st qtr except in Europe