says that airline profit expectations for the year ahead remain positive but
have moderated somewhat in recent months. The intelligence comes from the
Airline Business Confidence Index, a quarterly survey of airline CFOs conducted
earlier this month.
rate of expected improvement in profitability over the next 12 months has
fallen over the past 2 quarters, suggesting that improvements in key drivers
might have peaked earlier in 2015 and are currently stable or weakening.
traffic volumes were up during Q4 2015 compared to the year ago period. Despite
weakness in some emerging market economies, passenger air travel continues to
expand, supported by declines in the real cost of air transport.
survey also suggests that growth in passenger volumes will continue in the
coming months, but again, the share of respondents expecting an increase in
passenger volumes in the year ahead has moderated compared to early 2015. It
peaked at 79% in April 2015, and is now down to 55%.
likely reflects concerns over weakness in the global business environment and
emerging market economies.
gains in profitability have been driven by strong growth in passenger volumes
and falling input costs (material, fuel, labour and other overhead items). Respondents
reported seeing a decline in input costs in Q4 compared to a year ago, and that
trend is expected to continue in the year ahead.
respondents indicated that passenger yields in Q4 remain down on the year-ago
period, much the same as the trend throughout 2015. The January survey suggests
there might be further declines in the year ahead.
can read the full IATA quarterly Airline Business Confidence Index report here.