IATA’s quarterly business confidence survey of airline Chief Financial Officers provides an invaluable forward-looking view of key financial and demand indicators. It is similar to confidence surveys that are conducted for the manufacturing and service sectors in several major economies.

The latest survey shows:

• Airline profitability remained weak into the first quarter of 2009 under pressure from further falls in traffic and sharp declines in yields, according to survey respondents.  These factors more than offset the hedging-delayed benefits of lower fuel prices and efforts to resize capacity.  The expectations reported for the next 12 months however have, on balance, moved away from indicating significantly further reductions in profitability.  While an encouraging sign, there still remains a high degree of uncertainty in this outlook.  There is variation in outlook across the regions with Asia expecting further declines whereas in Europe and the Middle East the mood is a little more positive.
• The sharp falls both passenger and cargo traffic over the last three months have hit current results hard but expectations for the year ahead are for more stability.  Expectations for yields remain weak on both the passenger and cargo sides of the business but input cost increases have moderated in line with fuel price decreases and most expect cost stabilisation or further decreases in the year ahead.
• Employment levels within the industry are expected to fall over the next 12 months.