Airline leaders more optimistic on strengthening passenger and cargo demand: IATA

July 28, 2017

GENEVA - Surveyed in early-July for IATA’s quarterly business confidence index, more than three-quarters of airline CFOs and heads of cargo indicated that profitability increased in Q2 2017 compared to the same period of 2016. IATA said the survey results suggest that Q1 may have marked the bottom of the industry’s profitability cycle.

“Industry heads were markedly more confident about the outlook for profitability over the year ahead than they have been in recent surveys, mainly reflecting expectations that the demand backdrop will remain robust, IATA said.

The 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 four-fifths 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 too.”

IATA said half of the respondents reported a decrease in operating costs in the second quarter compared to a year ago, in part reflecting efficiency gains and optimisation efforts by airlines, but 19% expect unit costs to rise over the year ahead. The overall outlook for unit costs was weaker than in previous surveys, it said.

“Meanwhile, responses on the yield side were consistent with the bottoming out in passenger yields, and upward trend in freight yields, that we have observed in recent months - 43% of respondents reported higher passenger yields in Q2 2017 compared to a year ago, the highest proportion in nearly six years. (ATI).