IATA: Business confidence improving in latest airline survey

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;
• Employment:
  • 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.