Passenger volumes were reported to have expanded at a robust rate during Q3, but growth in cargo volumes is now broadly flat on the year ago period, which is consistent with FTK data and the lackluster demand backdrop.
Key points:
- Airline profit expectations for the year ahead have fallen further but remain positive, according to IATA’s quarterly survey of airline CFOs and heads of cargo in October;
- The rate of expected improvement in profitability over the next 12 months has fallen in October compared to Q1, suggesting that improvements in key drivers might have peaked earlier in the year;
- Recent gains in profitability have been driven by strong growth in passenger volumes and falling input costs;
- Passenger volumes were reported to have expanded at a robust rate during Q3, but growth in cargo volumes is now broadly flat on the year ago period, which is consistent with FTK data and the lackluster demand backdrop;
- The growth outlook is positive for both passenger and cargo businesses, but not at the strong pace that was expected earlier in the year. This likely reflects concerns over weakness in the global business environment and emerging market economies;
- Respondents reported seeing a decline in input costs in Q3 compared to a year ago, and that trend is expected to continue in the year ahead;
- Consistent with the lower input costs, the survey also showed weakness in yields in both businesses, for the recent past and the coming year;
- Airline employment activity was reported to have been stable in Q3, but a small increase is expected in the year ahead, consistent with the positive outlook for financial performance.
Airline Business Confidence Survey – October 2015
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
