Moody's more upbeat on global airline industry as fuel costs fall

US carriers will see largest increases in profit margins, helped by a mature domestic market and minor exposure to weakening foreign currencies

Angela Tan

Published Mon, Jan 19, 2015 · 09:50 PM

Singapore Airlines

Singapore

THE outlook for the global airline industry is looking brighter as carriers continue to benefit from the sharp declines in fuel costs.

On Monday, Moody's Investors Service upgraded its outlook on the sector to "positive" from "stable".

The credit rating agency expects the sharp drop in fuel costs to bolster the industry's financial performance. Adjusted operating profit margins for the industry is projected at 12-14 per cent this year and 11.5-13.5 per cent next year, compared to its estimate of 8.5-9.5 per cent for 2014.

US carriers will continue to garner the largest increases, helped in part by a mature domestic market and their minor exposure to weakening foreign currencies. As a result, their performance will be…