IATA survey shows airlines reporting higher profits in Q2

KUALA LUMPUR:

More than three-quarters of airline Chief Financial Officers and heads of cargo indicated that profitability increased in the second quarter of 2017 compared with the same period in 2016, according to a quarterly airline business confidence index survey conducted by the International Air Transport Association (IATA).

Seventy-seven per cent of respondents reported that profitability increased in, yearon-year, terms in the second quarter of this year, more than double the corresponding share in the previous survey and the highest proportion in almost seven years.

The passenger side remained consistent with the robust demand backdrop seen during the opening months of this year, with 71 per cent of the respondents reporting a yearon-year increase in passenger traffic in Q2 2017, which resulted in the backward-looking weighted-average score recovering to a five-quarter high.

“Eighty-one per cent of respondents expect passenger volume to rise further over the year ahead – the highest proportion since the October 2013 survey,” it said in a statement.

On the input cost, the survey revealed that half of the respondents reported a decrease in the quarter under review compared with a year ago while a further 31 per cent of the respondents reported no change.

“A number of respondents noted the role that efficiency gains and optimisation efforts have played in decreasing costs. A modest 19 per cent of respondents reported an annual increase in input costs in the quarter.

“Given renewed weakness in crude oil and jet fuel prices, just 19 per cent of respondents reported that they expect input costs to increase over the coming 12 months; this was the lowest proportion in six surveys,” it said.

For employment level, the survey recorded that 43 per cent of respondents reported an increase in the second quarter 2017 relative to the same period in 2016, with just 15 per cent reporting a decrease, making the weighted-average score for employment activity over the past three months remaining above the 50-mark for the tenth quarter in a row.

The survey also revealed that industry heads were markedly more confident about the outlook for profitability over the year ahead than they have been in recent surveys, mainly reflecting expectations that the demand backdrop would remain robust. — Bernama