IATA Survey Shows 52 Pct Of Airlines Expect Profitability In Q1

KUALA LUMPUR, April 27 (Bernama) -- A survey by the International Air Transport Association (IATA) among global chief financial executives and cargo heads of airlines', showed that almost 52 per cent of them expected profitability in the first quarter of this year to increase, relative to the same period last year. IATA in a statement said the survey results are consistent with the strong start of the year for the passenger market with almost 62 per cent of respondents seeing an increase in traffic in year-on-year terms during the quarter and less than 10 per cent reporting a fall. "The weighted average score remained firmly in positive territory, broadly in line with its average level since 2013," it said. IATA said the vast majority of respondents also expected passenger demand to increase over the next 12 months partly, as the gloomiest fears of a hard landing in China's economy have eased. Nevertheless, it said just under 42 per cent of respondents expected profitability to increase over the next 12 months, reflecting downward pressure on yields and ongoing uneven, modest global economic growth prospects. Meanwhile, on the cargo business, more than a quarter of respondents reported lower volumes in the first quarter relative to the same quarter last year, as the ongoing weak underlying global trade backdrop is also taking its toll on expectations of future growth. However, it said the weaker volumes was mitigated by lower oil price as two-thirds of respondents reported a decrease in operating costs during the quarter. The price of jet fuel, which accounts for around one-third of total industry costs, was 39 per cent lower in the first quarter in year-on-year terms. On employment, IATA said with industry profitability remaining healthy, airlines have been hiring with nearly 39 per cent of respondents reporting an increase in year-on-year employment levels in the first quarter. It said 42 per cent of respondents also expect to be employed over the next 12 months. -- BERNAMA