Moody’s Investors Services has come out with a Goldilock’s view on the global airline industry. It doesn’t expect it to be too hot, nor too cold.

Here are its bullet points, and we quote:

» Our outlook for the global airline industry is stable based on our view that high fuel costs and economic headwinds will limit operating profit growth.

» As long as Brent remains below $110 per barrel, we anticipate few attempts at fare increases.

» We anticipate slowing growth in passenger demand.

» Airlines will maintain capacity discipline.

» Expectations of industry-wide operating losses or a weak operating profit margin of below 3% would prompt us to shift our outlook to negative.

“We believe that the global airline industry can maintain profitability in each of the next two years. However, we do not anticipate meaningful expansion of earnings in this time frame. Economic headwinds and high jet fuel costs will be the primary obstacles to improving profitability,” Moody’s said in its annual report.

“Capacity discipline and attempts to increase fares will be the primary tools for carriers as they pursue their respective targeted returns on invested capital. The extent to which increases in the cost of jet fuel and declines in global GDP growth are positively correlated will determine the level of pressure on the industry’s profit performance — regionally and on an aggregate basis. Higher fuel costs while GDP growth lags would likely pressure earnings.”

Note: Brent crude for August delivery fell below $93 in Thursday trading. West Texas Intermediate was trading below $79.

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