US: 2016 to be strong year for US airlines, analysts say
Q4 and full-year 2015 results, which most carriers begin reporting this week, should reveal that the US airline industry will once again lead the world in terms of revenues and profits, Wall Street analysts and a credit-ratings agency believe. This year should be strong for the airline industry as a whole, with average profit margins expected to be around 10%, credit-ratings agency Moody’s said in a report. But the bright spot will remain in the US, which is expected to report 21% of the world’s airline revenues with profit margins well north of 10%, the agency said. These results are driven by the low price of fuel, strong domestic demand and US carriers’ relatively low exposure to currency risks. However, Moody’s notes that the strengthening US dollar could dampen demand for international travel. Also, the agency warns that a global recession, spike in oil prices or geopolitical events could change the outlook for US carriers. The industry should continue generating strong profits if airlines can continue resisting the temptation to add new routes simply because fuel prices are low, Wolfe Research analyst Hunter Keay said.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2016-01-21/general/us-2016-to-be-strong-year-for-us-airlines-analysts-say
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US: 2016 to be strong year for US airlines, analysts say
Q4 and full-year 2015 results, which most carriers begin reporting this week, should reveal that the US airline industry will once again lead the world in terms of revenues and profits, Wall Street analysts and a credit-ratings agency believe. This year should be strong for the airline industry as a whole, with average profit margins expected to be around 10%, credit-ratings agency Moody’s said in a report. But the bright spot will remain in the US, which is expected to report 21% of the world’s airline revenues with profit margins well north of 10%, the agency said. These results are driven by the low price of fuel, strong domestic demand and US carriers’ relatively low exposure to currency risks. However, Moody’s notes that the strengthening US dollar could dampen demand for international travel. Also, the agency warns that a global recession, spike in oil prices or geopolitical events could change the outlook for US carriers. The industry should continue generating strong profits if airlines can continue resisting the temptation to add new routes simply because fuel prices are low, Wolfe Research analyst Hunter Keay said.<br/>
