23-Jul-2013 3:57 PM

IATA: Airline business confidence remains strong, with cost and yield environment stabilising

IATA released its Jul-2013 Business Confidence Index survey. Key points include:

  • Airline business confidence remains strong according to a quarterly survey of airline CFOs and heads of cargo, with 71% of respondents expecting an improvement in profitability over the next 12 months;
  • There is confidence over the growth of travel and cargo markets in the year ahead and, although yields are no longer expected to improve, the cost environment has stabilized. Part of the strength of confidence is due to the structural improvements that have taken place;
  • Passenger markets continue to outperform cargo according to survey responses on recent past traffic volumes. Respondents foresee growth in both businesses over the next 12 months;
  • Input costs are reported to have declined during the recent past, with jet fuel prices now at the bottom of the two-year range. Expectations for input costs have also been revised down to the no change level for the year ahead;
  • Passenger and cargo yields remained unchanged in 2Q2013 compared to the year ago period. The less optimistic outlook for yields over the next 12 months is consistent with easing input cost pressures;
  • There was no change in employment during 2Q2013 and the trend is expected to continue over the next 12 months. This is a slight deterioration on Apr-2013, when some growth in jobs was expected. [more - original PR]

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