28-Jul-2017 8:09 AM

IATA Business Confidence Survey suggests 1Q2017 marked the bottom of the profitability cycle

IATA released (27-Jul-2017) its Airline Business Confidence Survey for Jul-2017. Key points include:

  • More than 75% of surveyed of airline CFOs and heads of cargo indicated that profitability increased in 2Q2017 compared to the same period of 2016;
  • IATA stated Business Confidence Survey results suggest that 1Q2017 may have marked the bottom of the industry profitability cycle;
  • Respondents 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. More than 80% of respondents expect passenger volumes to rise over the next 12 months, while the majority of respondents expect air freight volumes to continue their positive growth trend over the year ahead;
  • 50% of respondents reported a decrease in operating costs in 2Q2017 compared to a year ago, in part reflecting efficiency gains and optimisation efforts by airlines. 19% of respondents still expect unit costs to rise over the year ahead, the overall outlook for unit costs was weaker than in previous surveys;
  • Responses on the yield side were consistent with the bottoming out in passenger yields and upward trend in freight yields observed in recent months;
  • 43% of respondents reported higher passenger yields in 2Q2017 - 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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