Executive Briefings

Weak First Quarter Doesn't Dampen Confidence of Air Cargo Executives Going Forward

Now that the first quarter of fiscal 2016 is in the past, results are in from IATA's most recent airline business confidence survey, and gauging from the responses of airline CFOs and cargo heads surveyed - their outlook is bullish for the remainder of the year, despite a perceived weak first quarter.

IATA's survey takes a measure of five key indicators: profitability, demand, input costs, yield and employment - and asks respondents to reflect on the past three months, as well as their outlook for the year ahead.

Beginning with the outlook for industry profitability, results from cargo and passenger respondents were combined - but the majority of respondents, 74.2 percent expect profitability to remain flat or improve over the next 12 months. Looking back on the first quarter, 51.6 percent of respondents believed industry profitability improved, year over year.

Moving on to demand growth, U.S. West Coast port disruptions, which led to a surge in demand in Q1 2015, were the likely cause of more than one-quarter of respondents reporting lower volumes in Q1 2016 relative to the year prior. For the next 12 months, those surveyed were optimistic about cargo demand, with 43.3 percent expecting stability and 43.3 percent expecting growth.

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IATA's survey takes a measure of five key indicators: profitability, demand, input costs, yield and employment - and asks respondents to reflect on the past three months, as well as their outlook for the year ahead.

Beginning with the outlook for industry profitability, results from cargo and passenger respondents were combined - but the majority of respondents, 74.2 percent expect profitability to remain flat or improve over the next 12 months. Looking back on the first quarter, 51.6 percent of respondents believed industry profitability improved, year over year.

Moving on to demand growth, U.S. West Coast port disruptions, which led to a surge in demand in Q1 2015, were the likely cause of more than one-quarter of respondents reporting lower volumes in Q1 2016 relative to the year prior. For the next 12 months, those surveyed were optimistic about cargo demand, with 43.3 percent expecting stability and 43.3 percent expecting growth.

Read Full Article