While 2017 jet fuel prices are expected to rise 13% to US$60/bbl from 2016’s US$52.9/bbl average and push up the average cost/available-seat-kilometre (ASKs) of airlines, Khor is unfazed by the likely stepdown in airline profits as it comes from a high base.
SINGAPORE (Feb 10): AirAsia, Asia Aviation and Cebu Air are DBS’ top buy calls as Asean airlines appear on track for record 2016 performances, says DBS.
However, the outlook for 2017 is less benign as fuel prices trend upwards in tandem with crude oil prices and expects margins to be squeezed from the bottom, says DBS lead analyst Marvin Khor in a Friday report.
