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Moody's upgrades outlook for global airlines to positive from stable

Monday, January 19, 2015 - 12:48
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Moody's Investors Service has upgraded its outlook for the global airline industry to "positive" from "stable", following the sharp declines in fuel costs.

MOODY'S Investors Service has upgraded its outlook for the global airline industry to "positive" from "stable", following the sharp declines in fuel costs.

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 are projected at 12-14 per cent for this year and 11.5-13.5 per cent for 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 stronger relative to airlines based in increasingly competitive developing markets, and in Europe, says Moody's vice-president, senior credit officer, Jonathan Root.

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