Confidence grows for 2015

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By TESTCustomwebLP TESTCustomwebLP October 23, 2014 20:06

Confidence grows for 2015

The latest IATA quarterly survey of airline CFOs and cargo heads this month shows an increase in profit expectations for the year ahead. The survey also shows that financial performance has started to improve again compared to a year ago, and even after no gains during the second quarter, the outlook remains positive and the industry expects further growth in profitability.

The survey indicates that falling inputs costs and stronger growth in traffic volumes are responsible for better recent financial performance as well as the positive outlook. Respondents reported seeing a decline in input costs during the third quarter mainly due to the fall in crude oil prices. The expectation that oil prices will continue on their downward trend contributes to the positive outlook for profitability.

In general, passenger and cargo volumes were reported to have expanded during the third quarter, reflecting improvement in the demand environment after weakness in early 2014. IATA has found that there is also confidence that air transport volumes will continue to expand over the next 12 months, supporting the expectation for profit improvements during the next 12 months.

Despite all of that yields are continuing to decline, however respondents to the IATA survey report that downward pressure easing during the quarter and that further weakness in yields is not expected for the year ahead. Echoing the stable performance, employment activity is reported to have been stable in Q3 compared to a year ago, and no growth is expected for the year ahead.

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By TESTCustomwebLP TESTCustomwebLP October 23, 2014 20:06