New York, January 23, 2019 --

  • Aggregate operating profit margin will remain steady at around 8% over the next 12 to 18 months

  • Passenger demand will slow but still exceed capacity

The 12-18 month outlook for the global passenger airlines industry is stable on steady operating margins supported by higher passenger volumes, mixed growth in pricing and modestly lower fuel costs, Moody's Investors Service says in a new report.

"Slowing economic growth across regions will pressure passenger demand and revenue growth, but this should be offset by non-fuel cost management initiatives and efforts to align capacity with demand," says Jonathan Root, Senior Vice President at Moody's.

Industry operating margins will likely hover around 8% across all geographic regions, in stark contrast to 2016-2017 when US airlines achieved stronger margins than their peers around the globe. Variation in fuel hedging strategies across regions is likely a significant contributor to changes in relative margins, notes Root.

Moody's says that business challenges will vary by region. US GDP growth, higher employment and lower income tax rates should support modest unit revenue growth for US airlines, while European airlines' margins could be pressured by slowing GDP growth in that region.

Moody's research subscribers can access this report, "Passenger airlines -- Global: Volume growth, pricing gains and lower fuel costs to support steady operating margins," at

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