BUSINESS CONFIDENCE SURVEY RESULTS NOW OUT
(Posted 26th July 2018)
Key points of the IATA business confidence survey:
- The results of the survey conducted in early-July, suggest that the squeeze on airline operating profit margins intensified during Q2 2018.
- This is consistent with increased reports of higher input costs, mainly reflecting developments in jet fuel prices. Many of our respondents (54%) expect to see further increases in input costs over the year ahead.
- The majority (57%) expect their level of profitability to improve further over the coming 12 months, however, which reflects the fact that passenger and freight yields are expected to partly offset further increases in input costs.
- The positive outlook for profitability also reflects confidence about the strength of the demand outlook, particularly on the passenger side of the business; 84% of respondents expect passenger volumes to rise over the year ahead – the second highest proportion in ten years.
- The outlook for cargo demand has softened slightly in the past two surveys, which partly reflects uncertainty caused by the recent pick-up in global trade tensions. Nonetheless, the majority (58%) of our respondents expect air freight volumes to rise further over the year ahead.
- Encouragingly, 43% reported an increase in employment levels in Q2 relative to the same period a year ago, and more than 50% of respondents expect to increase employment levels further over the next 12 months.
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