Airlines expect declining yields and increasing unit costs
In its latest summary of business confidence in the airline industry, IATA reports that confidence in profitability for the year ahead has fallen in October. It now stands at a level consistent with little better than break-even. A fall in profitability was also reported for Q3. The economic outlook has deteriorated since the July survey, IATA says, although passenger markets are expected to remain more robust than cargo volumes.
However, airlines expect declining yields and unit costs are expected to continue to rise. Airlines now expect profit margins to be squeezed, and breakeven load factors to rise, to a greater extent than they did in July.
[pictured: American Airlines Boeing 777; courtesy oneworld]