SOURCE: IATA
Key points
• First releases of Q4 financial results show that airline losses continued in Q4 but losses were smaller than Q3 helped by cost cutting measures and robust cargo revenues. However, airlines are still expected to continue to burn cash throughout 2021 as the recovery in travel demand is delayed to the second half of the year.
• Global airline share prices declined in January amid new travel restrictions. European carriers underperformed other regions as the pace of vaccine rollout was slower than expected, increasing the risk to summer travel.
• Oil and jet fuel price reached pre-pandemic levels. Oil supply cut extensions from OPEC+ and expectations about global economic recovery led the price rally despite the lockdowns. Looking forward, airlines will face cost pressures once the recovery starts as fuel is the largest variable cost and fuel hedging is limited at present.
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