Airline stakeholders have positive profit expectations for the year ahead even though recent improvements in financial performance have paused.
The International Air Transport Association’s (IATA) quarterly airline business confidence index for July showed that recent improvements in airline financial performance appear to be coming to an end. Airline CFOs and heads of cargo surveyed in July said there has been no change in profits in the second quarter of the year compared to a year ago.
Despite this, their outlook for profitability remains positive, which IATA conjectures is likely explained by survey responses on yield developments.
“Respondents have reported declines in yields during Q2, which is consistent with the pause in recent improvements in airline financial performance,” said the report. “But there is confidence about a rise in yields over the next 12 months, which is the likely driver of the positive outlook for profitability.”
The surveyed officials showed confidence that passenger and cargo volumes and demand will continue to expand over the next 12 months and support growth in yields.
They are likewise banking on capacity management and stabilizing costs to help boost their bottom line, noted IATA.
On the cargo outlook in particular, the survey outcome was positive, with 56 percent of respondents expecting an increase in demand over the next 12 months.
This reflects important developments in the demand environment, the trade association said. “Respondents reported growth in air freight volumes over recent months, which is consistent with freight data and the resumption in growth in business confidence and world trade volumes.”
Cargo grows in June
Meanwhile, Asia-Pacific carriers saw demand for air-freighted goods continuing to grow in June, helped by positive consumer and business sentiment in major developed economies, according to the latest figures from the Association of Asia Pacific Airlines (AAPA).
Overall, airfreight demand in freight tonne kilometers (FTKs) grew by an encouraging 4.7 percent compared to the same month last year. The average international freight load factor rose for the second consecutive month, by 0.8 percentage points to 66.1 percent in June on a 3.4 percent growth in offered freight capacity.
“The overall traffic demand environment in the region is still expected to be positive, supported by continued growth in regional economies and further improvement in the US and European economies. However, competitive pressures remain intense, forcing Asian airlines to keep a close watch on costs while carefully managing capacity,” said AAPA director general Andrew Herdman.
Changi volumes drop
On the other hand, Singapore Changi Airport reported that cargo handled in June totaled 154,700 tonnes, 0.2 percent less than for the same month a year before.
In the first half of this year, overall cargo shipments reached 910,100 tonnes, a growth of 0.6 percent year-on-year.
Photo: luke,ma
