Global Airline Share Prices Drop 11.6 Pct In June 2016

KUALA LUMPUR, July 12 (Bernama) -- Global airline share prices dropped 11.6 per cent in June to end the month more than 21 per cent below the level at the start of the year, the International Air Transport Association's (IATA) said. It attributed the fall to the uncertainty over the Brexit vote, along with lingering impacts from recent terrorist attacks, which had added investor concerns about the impact of falling unit revenues on profitability. The ‘Brexit’ vote has taken a heavy toll on airline shares globally, particularly in Europe whereby their shares 24.6 per cent month-on-month fall was the biggest monthly decline since September 2001. Share prices of North American and Asia Pacific carriers also declined (-10.6 per cent and -3.0 per cent, respectively), IATA said in its Financial Monitor report for May 2016-June 2016. IATA said the decrease in share prices was also based on the fuel costs where in June, the price of Brent crude oil was below US$50 per barrel or 21 per cent lower than the corresponding month in 2015. "The oil futures curve has ticked up slightly, but the market still expects oil prices to remain at reasonably low levels for the foreseeable future (below US$60/bbl over the next three years). "That said, the annual comparison is going to become less favourable in the near future, with the year-on-year growth rate set to move back into positive territory at the end of July," it said. IATA said the average global yield in reported US dollar terms has fallen by around nine per cent year-on-year so far this year (the latest data go up to end-April and exclude taxes, fees and surcharges). "Adjusting for distortions from earlier gains in the dollar, we estimate that global yields fell by approximately six per cent in constant exchange rate terms in early-2016. "Given the sharp fall in the dollar at the start of 2016, the distortions should ease over the months ahead," it said. -- BERNAMA