Airline chief financial officers and heads of cargo have lowered their profit expectations for 2016, probably reflecting concerns over weakness in global business environment and emerging market economies, according to the International Air Transport Association.
“The rate of expected improvement in profitability over the next 12 months has fallen over the past two quarters, suggesting that improvements in key drivers might have peaked earlier in 2015,” IATA said in its latest quarterly survey of CFOs and cargo heads.
More than 45% of respondents predict improved profitability over the next year, while 25.7% expect a decrease and 28.6% see no change. Recent gains in profitability have been driven by strong passenger growth and lower oil prices.
IATA said passenger traffic volumes were up during the fourth quarter of 2015 compared to the year-ago period.
“The survey results are consistent with the latest air transport data, which indicate that air travel is up 6-7% compared to a year ago,” the association said. “Despite weakness in some emerging market economies, passenger air travel continues to expand strongly, supported by declines in the real cost of air transport.”
“Despite weakness in emerging market economies, passenger air travel continues to expand strongly, supported by declines in the real cost of air transport,” IATA said.
Respondents also said airline employment activity increased in the fourth quarter and that they expect a small amount of growth in employment in the year ahead.