Cargo carriers still basking in the afterglow of a decent peak season in late 2014 are saying the relatively good times will keep rolling for much of 2015, according to the results of the latest quarterly survey on air carrier confidence from the International Air Transport Association (IATA).
IATA’s “Airline Business Confidence Index,” released on Monday, reported that 71 percent of cargo executives and chief financial officers surveyed said they expected an 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 percent of the cargo execs expected an improvement in profitability through the next 12 months, while 68 percent 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 U.S. as well as a strengthening U.S. dollar.”
Cargo yields “declined at a slightly slower pace in Q4” that in the previous quarters, IATA said, suggesting that airline profit expectations will be more positive for 2015. But, on a sour note, the cargo officials surveyed said they still expected to see weakening yields for the rest of the year.
