IATA confidence index shows sharp decline

Results from IATA’s quarterly Airline Business Confidence Index conducted in April point to a significant deterioration in sentiment on the outlook for industry profitability in 2011. The bulk of respondents now expect the level of profitability to fall this year, driven largely by a significant increase in fuel costs. The extent of improvement in reported […]


airline business confidence index IATA


Results from IATA’s quarterly Airline Business Confidence Index conducted in April point to a significant deterioration in sentiment on the outlook for industry profitability in 2011. The bulk of respondents now expect the level of profitability to fall this year, driven largely by a significant increase in fuel costs. The extent of improvement in reported profitability also moderated during the first quarter of 2011. While 55 per cent of respondents reported improved profitability during Q1 2011, almost a third reported poorer results. In March IATA revised down its forecast for 2011 industry profits to US$8.6 billion, a decline of almost 50 per cent from the estimated US$16 billion profits achieved in 2010. Both cargo and passenger demand continued to improve during the first quarter of 2011 with increases in cargo demand reported by 59 per cent of respondents on the cargo side and 65 per cent on the passenger side of the business. These are lower than the 80% level reported in January. Expectations for further improvements in demand over the 12 months ahead are also moderating, according to the IATA survey. The current expansion of air freight and travel markets has further to run, but growth rates are likely to be lower, it added.