Business confidence remains

victoria@aviationnews-online.com
By victoria@aviationnews-online.com January 31, 2018 12:16

Business confidence remains

The main message from Airline Economics Growth Frontiers Dublin this year was that the aviation industry continues to enjoy an extended peak of the industry upcycle, with many trying to foresee where those areas of stress are building – the KPMG Aviation Industry report touches on many of these (click here to read). But the latest statistics from the International Air Transport Associations (IATA) echo that continual positive vibe. The latest business confidence survey of airline CFOs and heads of cargo indicates an improvement in year-on-year profitability in the fourth quarter of 2017 compared with the same period in 2016. The majority (56%) reported that they expect their profitability levels to improve further over the coming 12 months, says IATA, who credits the positive outlook as being supported by robust demand growth on both the passenger and freight sides of the business. Some 86% of respondents to the survey said that they expect passenger volumes to rise over the year ahead – the highest proportion in more than a decade.

Input costs are increasing, however, with 38% of respondents reporting an increase in Q4 2017 compared to the same period a year ago, with many singling out the impact of higher fuel prices.The upward trend in oil prices is expected to continue to impact airline costs in the year ahead. Despite this, partly as a result of the strength of the economic backdrop and current demand/supply balances, IATA states that survey respondents appear confident about the outlook for both passenger and freight yields over the year ahead; both the forward-looking weighted-averages scores are currently above the 50-mark.

In summary, the outlook for industry employment over the next 12 months remains positive, says IATA, with 37% of respondents expecting to increase employment and a similar proportion expecting to maintain current levels. The full report can be accessed here.

victoria@aviationnews-online.com
By victoria@aviationnews-online.com January 31, 2018 12:16