[270115.EN.AIR] IATA: Cargo Confidence Carries Into 2015, But Yields Expected To Decline

THE International Air Transport Association's (IATA) "Airline Business Confidence Index," reports that 71 per cent of cargo executives and chief financial officers surveyed said they expect increased in cargo demand the next 12 months.

"The improvement in the recent past performance, as well as the positive outlook, are both supported by stronger growth in traffic volumes as well as easing input costs," especially in the Asia Pacific and North American regions, the report stated.

The survey also indicated that 78 per cent of the cargo executives expected an improvement in profitability through the next 12 months, while 68 per cent said they had already seen a rise in profits over the last three months.

Meanwhile, input costs have declined during the past three months, the survey found a continuation of a "downward trend" that began in the middle of 2014. "The decline in input costs in Q4 is a result of the fall in crude oil prices over recent months," the study said.

"Crude oil prices, and therefore jet fuel prices, have declined due to several factors, including increasing oil supply in the US as well as a strengthening US dollar."Yields "declined at a slightly slower pace in Q4" than in previous quarters, IATA said, suggesting that airline profit expectations will be more positive for 2015, but weakening yields were still expected for the rest of the year.

Source : HKSG.