Airline finances looking up: Iata

Airlines are faring better financially this year, with share prices and fares up, despite the volcanic ash that caused hardship in April, global airlines body, International Air Transport Association (Iata) said. Its latest Financial Health Monitor said passenger travel was up at an annualised rate of nine per cent in the first quarter, with air freight volumes expanding at a 26 per cent rate.

Airfares, a key driver of airline income, have also risen significantly on a seasonally adjusted basis, Iata said.

"Tighter supply-demand conditions, as load factors rise, have pulled average fares (and cargo rates) up," it said. "Average economy fares are now 10 per cent above their lows, while premium fares have risen 15 per cent. However, both are only half-way to regaining the levels achieved in early 2008."

Oil prices have averaged $78 (Dh286) per barrel in 2010, just below the $79 per barrel Iata is forecasting for this year.