8-Aug-2017 9:15 AM

IATA: Airline Business Confidence Index shows strong confidence about increasing profits

IATA released (07-Aug-2017) its Airline Business Confidence Index for Jul-2017. Key highlights of the survey, conducted in early Jul-2017, include:

  • More than 75% of airline CFOs and heads of cargo indicated that profitability increased in 2Q2017 compared to 2Q2016;
  • Survey results suggest 1Q2017 "may have marked the bottom of the industry profitability cycle";
  • Industry heads were markedly more confident about the outlook for profitability over the year ahead than in recent surveys, mainly reflecting expectations that the demand backdrop will remain robust;
  • Survey responses were consistent with the strong opening to 2017 for both passenger and freight volumes. Given the broad based pick up in global economic conditions, more than 80% of respondents expect passenger volumes to rise over the next 12 months, while the majority of respondents expect airfreight volumes to continue their positive growth trend over the year ahead;
  • 50% of respondents reported a year-on-year decrease in operating costs in the second quarter, in part reflecting efficiency gains and optimisation efforts by airlines;
  • 19% of respondents still expect unit costs to rise over the year ahead, although the overall outlook for unit costs was weaker than in previous surveys;
  • Yield expectations were consistent with the bottoming out in passenger yields and upward trend in freight yields. 43% of respondents reported higher passenger yields in 2Q2017 compared to 2Q2016 - the highest proportion in nearly six years;
  • Airline employment activity increased for the 10th consecutive quarter in 2Q2017. 44% of respondents reported they expect to increase employment levels over the year ahead. [more - original PR]

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