Air cargo execs continue gloomy outlook in IATA index

Air cargo executives are notably less optimistic about their economic prospects for the year ahead, compared to the same time last year, according to IATA’s July 2016 Business Confidence Index. Conducted in early July of this year, IATA surveyed airline CFOs and heads of cargo regarding their expectations for the next 12 months. The results substantiated April’s IATA economic performance of the airline industry report that found executives to be more positive about future growth in air travel, but less positive about cargo.

This time around, the consensus across passenger and cargo operations is that profits will not improve over the next 12 months. Of the surveyed executives, 45.7 percent anticipate a decrease, 14.3 percent foresee no change and the remaining 40 percent expect an increase in profitability. This puts 60 percent in the decrease/no-change camp. This disposition, according to IATA, reflects disruptions following recent terrorist attacks in France, Belgium and Turkey, “particularly for European airlines.”

One year ago, executives were far more sanguine. In 2015, IATA found that only 22.9 percent expected a decrease in profits, and a full 60 percent were confident that profitability would increase.

That said, according to this year’s report, only 9.1 percent of surveyed executives anticipate cargo traffic volumes decreasing in the year ahead. The survey found that another 48.5 percent expect volumes to remain static, while the remaining 42.4 percent are more optimistic, reporting that they expect improvement or an increase in cargo volumes.

The numbers in the previous paragraph represent a markedly worse outlook than those published a year ago. Last year, at the same time, cargo executives anticipated a 10 percent decrease, 36.7 percent predicted no change and 53.3 percent increase in cargo volumes. Clearly a lot has changed over the course of the year.

The July 2016 survey indicated that cargo heads anticipate a continued drubbing when it comes to yields over the next 12 months. Just over 90 percent of respondents expect cargo yields to remain unchanged or to fall further in the year ahead –  41.9 percent anticipated a decrease and 48.4 percent expected no change.