An IATA survey found that more than three-quarters of airline chief financial officers and heads of cargo indicated that profitability increased in the second quarter of 2017 compared to the same period of 2016. However, IATA added that the first quarter may have marked the bottom of the industry profitability cycle. The airline and cargo executives were surveyed in early-July for IATA’s quarterly business confidence index.
Said IATA: “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.
“Once again, 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 airfreight volumes to continue their positive growth trend over the year ahead too.
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 optimization efforts by airlines.
Added IATA: “While 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.
“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.”
Airline employment activity increased for the tenth consecutive quarter in Q2 2017. Some 44% of respondents reported that they expect to increase employment levels over the year ahead.
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