New York-based Bernstein Research believes the airline industry is firmly in the recovery period on a global basis, citing four key positive indicators—“increasing traffic, rising load factors, higher yield and positive operating profits.”
In a recently released client report, Bernstein said that after an unusually short down cycle and trough period, partially attributable to the rise of emerging markets and the globalization of demand, “airline traffic has been steadily rising since 2009 in all regions, with the exception of the interruption by the Icelandic volcano eruption in March 2010.”
It continued, “Global load factors are at levels comparable to, or higher than, levels seen in the last cycle on a seasonally adjusted basis. Yields have improved significantly from 2009 levels; however, they are still not quite back at 2008 levels.”
Bernstein added that it is seeing a broad-based recovery in profitability, with all the major US airlines and most European and Asian airlines fully profitable in the 2010 third quarter.
Bernstein said it expects aircraft deliveries to grow 30% over the next five years, supported by unusually large backlogs. “Backlogs are much higher than in past cycles, relative to production levels, and emerging markets are the most important source for growth, with backlogs likely to go higher,” it noted.
Bernstein added that replacement demand should increase the number of deliveries needed for growth, “as we expect replacement airplanes to account for roughly 40% of deliveries over the next five years.”
Source : http://atwonline.com/airline-finance-data/news/bernstein-global-airline-industry-firmly-recovery-period-0109