24-Apr-2012 10:31 AM

IATA: Airline business confidence improves in Apr-2012

IATA, in its Apr-2012 Airline Business Confidence Index, stated (23-Apr-2012) airline industry confidence has improved slightly with outlook for the next 12 months also less pessimistic despite continued weakness in 1Q2012 profits. Passenger yield expectations have strengthened with the 12-month outlook improving while the downward pressure on cargo yields is expected to ease over the next 12 months. Details include:

  • Profitability: Confidence in airline profitability has improved compared to Jan-2012 with 23% reporting improved profitability in the past three months and a decline in the portion of those expecting profits to deteriorate;
  • Demand growth: Expectations for passenger traffic volumes have become more optimistic and the share of optimistic views for the next 12 months also increasing significantly. Cargo traffic was weaker over the last three months than in 4Q2011, but improved indicators of business confidence and trade have made respondents more confident about the year ahead;
  • Costs: Almost 55% of CFOs and cargo heads believe that input costs will increase over the next 12 months, compared to 19% in Jan-2012;
  • Yield: Passenger yields were slightly weaker in 1Q2012 but expectations are for improvement over the next 12 months. The improved outlook for yields could be reflecting the expectation of being able to recoup higher input costs. Cargo yields were reported to have fallen further over the past three months and weakness is expected to continue in the year ahead, but to a much lesser extent than six months ago. [more – original PR]

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