IATA released (26-Oct-2009) its latest Airline Business Confidence index, a survey of airline CFOs and heads of cargo operations, stating it saw further weakness in financial & market conditions reported in 3Q2009, but the rate of deterioration is now appearing to stabilise. There has been a "marked increase" in confidence that conditions will improve in the next 12 months. Key points include:
- Profitability outlook:
- 73.1% of respondents expect profitability to improve over the next 12 months (compared to 43% in Jun-2009 survey);
- 92.3% indicate that profitability has fallen over the previous three months;
- Profits are not expected to return, but rather the majority of respondents are expecting losses to diminish.
- Demand outlook:
- 60% expect demand to improve in the next 12 months, 26.7% expect no change;
- 73.9% expect cargo demand to improve over the next 12 months;
- Input costs
- 50% of respondents expect input costs to decrease in the next 12 months, 30.8% expect no change;
- Yield environment:
- 46.7% expect passenger yields to increase in the next 12 months, 26.7% expect no change;
- 69.6% expect cargo yields to improve over the next 12 months;
- 50% expect to cut employment levels in the next 12 months, 34.6% expect no change. [more]
IATA: "This does not mean that a return to profit is expected. It does mean that the majority are now expecting losses to diminish over the next 12 months. There was a positive majority in all regions surveyed. However, there was a notable difference in responses between airlines in Asia and Europe. All the airlines in Asia expected an improvement, whereas a significant minority of European airlines expected a further deterioration," IATA statement, 26-Oct-2009.