Growth in cargo volumes and demand is expected to pick up in 2014, reflecting recent improvements in world trade growth and increases in business confidence, but yields are seen to remain unchanged for this year, according to IATA’s quarterly survey of airline CFOs and heads of cargo in January.
The “Airline Business Confidence Index” for January 2014 shows improving cargo growth projections among airline respondents, which “reflect important developments in the demand environment,” said the report.
Respondents reported seeing growth in airfreight volumes over recent months, which is consistent with freight data, with more than 66 percent expecting an increase in demand over the next 12 months
“This is the biggest expected rate of increase since mid-2010, a very strong year for cargo,” the report said.
Moreover, the results of the January survey show that a majority of respondents—more than 70 percent—expect to see improvements in profitability over the next 12 months.
“Performance for 2013 overall was an improvement on 2012, with airlines in some regions seeing the benefits of consolidation and efficiency gains. These improvements appear to be supporting the optimistic outlook for airline financial performance for the year ahead,” IATA said.
As for cargo yields, these were reported to have declined in the fourth quarter, consistent with excess capacity and weak load factors.
“Importantly, however, the outlook for cargo yields shows potential for slight improvement, and at the least no further decline is expected during the next 12 months,” the group further said.
In input costs, survey respondents indicated a decline in operational expenses during the fourth quarter, due less to jet fuel prices, which remained high, and more to cost-cutting initiatives. The outlook for input costs over the next 12 months is broadly stable, IATA said.
Recent past and future expectations for employment in the airline industry were positive, according to the January survey results.
“The increase in airline employment activity during the past three months is consistent with the improvement in financial performance that airlines are experiencing. The trend is expected to continue in the year ahead,” noted the report.
Photo: Pieter v Marion
