Airline profit expectations for the year ahead remain positive, as passenger and cargo volumes expanded in the third quarter of this year, a recent survey by the International Air Transport Association (Iata) has revealed.
The survey showed an improvement in airline profit during the third quarter, after a flat previous quarter.
“Looking ahead, the demand backdrop suggest that growth in passenger volumes in the months ahead will be at least at the current rate,” the survey said, with 78 per cent of the respondents expecting passenger traffic volumes to rise.
For air cargo, about 62 per cent of the respondents expected an increase for air freight over the coming 12 months. Cargo volumes worldwide have also improved in the third quarter, versus the second quarter of this year.
Earlier this week, Iata said that air freight growth globally is estimated at 4.1 per cent over the next five years. Emerging economies, particularly in the Middle East and Africa, will lead growth. However, the airline association warned of geopolitical concerns, volatility of oil prices and competition from rail and sea to affect the forecast.
Separately, a recent drop in crude oil prices over the past three months is expected to reduce input costs for airlines, the survey showed. Jet fuel prices dropped on the back of an increase of crude oil supply in the US, as well as the strengthening of the US dollar. Respondents in the survey predict that the trend will continue during the year ahead, with input costs expected to decline further.
Respondents in the survey also said that passenger yields continue to decline but at a slower rate in the third quarter as opposed to the second quarter of this year. However, as demand for air transport continues to grow next year, it is expected to reduce the further decline of yields
Meanwhile, employment in the industry remained unchanged during the third quarter, compared to a year earlier. Chief financial officers cited in the survey foresee “no growth in employment” in the coming year.
selgazzar@thenational.ae
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