According to the International Air Transport Association (IATA) airline profit expectations remain strong and broadly in line with levels seen over the past year.

 

Results from IATA’s quarterly survey of airline CFOs and heads of cargo in April suggests that the industry is confident that air transport volumes will continue to expand over the next 12 months, supporting an improved outlook for (passenger) yields.

 

A majority (76%) of respondents expect passenger travel to expand over the year ahead, at a faster pace than in the January survey.

 

Passenger traffic increased during Q1 2014, according to survey responses about the past three months. The rate of improvement in April slowed compared to January – the proportion of respondents reporting a slowdown in growth in passenger travel increased from 10% in October to 24% in April.

 

 

Looking ahead, the pick-up in the global economic cycle suggests growth in passenger volumes in the months ahead will be at least at the current rate. The proportion of survey respondents expecting a rise in traffic volumes is a significant 76%, a strong result and slightly up on January (72%).

 

With respect to recent past performance, respondents reported seeing better profitability in Q1 compared to the year ago period. Slightly more than half of the respondents indicated an improvement, but the proportion of respondents experiencing a fall in Q1 profits rose to 30%, compared to 25% in the January survey, bringing the rate of improvement in Q1 down compared to Q4.

 

This is consistent with the recent slowdown in business confidence improvements, but it has not had any significant impact on the outlook, which remains positive.

 

The results of the April survey show that a majority of respondents expect to see improvements in profitability over the next 12 months. The positive outlook has been broadly stable since the April 2013 survey.