Airline shares outperform market in Feb

Airline share prices continued to outperform the market in February as investors favour the "highly cyclical" sector, according to the latest financial performance data released by the International Air Transport Association (Iata).

World airlines, led by Asian and US carriers, raised $1 billion (Dh3.67bn) cash in January, taking the total cash raised on the markets since early 2009 to more than $31bn, and raising airline share price gains by five per cent in the month as markets become more positive about performance of airlines.

Airline equity prices are up one to two per cent so far this year, and more than 50 per cent above the February 2009 lows, Iata statistics revealed.

"Airlines have outperformed the market so far this year and, in Europe and Asia-Pacific, have kept pace with the market in the upturn of the past 12 months," the aviation trade body said in a statement, adding that in the United States, airline stock prices doubled over the year, "far in excess of the market".

Investors, meanwhile, saw airlines as a cyclical play and the industry has benefitted as the economic recovery continues, allowing another $1bn of cash to be raised from debt so far this year and some equity from Tiger Airways' initial public offering, Iata's report pointed out.

Average fares on international markets, meanwhile, went up in response to fuller aircraft, with average economy fares having risen 10 per cent in February from mid-2009 lows, but some nine per cent lower than average fares in early 2008, Iata said. However, premium fares are still around "20 per cent below early 2008 levels".

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