News Content
IATA: Despite concerns, air cargo CFOs confident of a better 2016 to come
A SURVEY by the International Air Transport Association (IATA) of airline chief financial officers (CFO) revealed their outlook was bullish for the remainder of the year despite a 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 74.2 per cent of respondents expect profitability to remain flat or improve over the next 12 months.
Looking back on the first quarter, 51.6 per cent of respondents believed industry profitability improved year on year.
Moving on to demand growth, US west coast port disruptions, which led to a surge in demand in the first quarter of 2015, were the likely cause of more than one-quarter of respondents reporting lower volumes in Q1 2016.
For the next 12 months, those surveyed were optimistic about cargo demand, with 43.3 per cent expecting stability and growth.
Looking at the weighted score of demand growth over the past five quarters, IATA added that, although "the weighted average score for freight over the next 12 months remains in positive territory, it is currently at its lowest level since April 2011."
The massive drop in crude oil prices has led to a reduction in jet fuel prices, with two quarters of respondents reporting a decline during the first quarter of 2016.
Looking ahead, more than four out of five respondents, 80.6 per cent, felt input costs would either remain stable or continue to fall.
Closely coupled with falling input costs, and compounded by a surge in bellyhold and maindeck capacity without sufficient growth in global trade, cargo faces a difficult yield environment.
Half of respondents saw yields fall during the first quarter, and there is little hope of improvement during the year ahead.
Only 7.1 per cent of respondents expect yields to rise, while 46.4 per cent expect a continued fall.
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 74.2 per cent of respondents expect profitability to remain flat or improve over the next 12 months.
Looking back on the first quarter, 51.6 per cent of respondents believed industry profitability improved year on year.
Moving on to demand growth, US west coast port disruptions, which led to a surge in demand in the first quarter of 2015, were the likely cause of more than one-quarter of respondents reporting lower volumes in Q1 2016.
For the next 12 months, those surveyed were optimistic about cargo demand, with 43.3 per cent expecting stability and growth.
Looking at the weighted score of demand growth over the past five quarters, IATA added that, although "the weighted average score for freight over the next 12 months remains in positive territory, it is currently at its lowest level since April 2011."
The massive drop in crude oil prices has led to a reduction in jet fuel prices, with two quarters of respondents reporting a decline during the first quarter of 2016.
Looking ahead, more than four out of five respondents, 80.6 per cent, felt input costs would either remain stable or continue to fall.
Closely coupled with falling input costs, and compounded by a surge in bellyhold and maindeck capacity without sufficient growth in global trade, cargo faces a difficult yield environment.
Half of respondents saw yields fall during the first quarter, and there is little hope of improvement during the year ahead.
Only 7.1 per cent of respondents expect yields to rise, while 46.4 per cent expect a continued fall.
Latest News
- For the first time, tianjin Port realized the whole process of dock operati...
- From January to August, piracy incidents in Asia increased by 38%!The situa...
- Quasi-conference TSA closes as role redundant in mega merger world
- Singapore says TPP, born again as CPTPP, is now headed for adoption
- Antwerp posts 5th record year with boxes up 4.3pc to 10 million TEU
- Savannah lifts record 4 million TEU in '17 as it deepens port
