Dim Outlook for Air Transport Sector

A strong sales year in 2011 on the part of the world’s two major airliner manufacturers might portend a positive outlook for the air transport sector over the long term, but confidence in the profitability of the airline industry for this year continues to sag, according to the International Air Transport Association (IATA). In fact, the group expects profitability to decline by some $2 billion in 2012, and margins to settle at just 0.8 percent.

IATA’s recent Airline Business Confidence survey revealed an expectation that unit costs will increase while yields remain relatively miniscule. The majority of the CFOs and heads of cargo departments who participated in the survey expected no change in passenger yields while 90 percent of respondents expected cargo yields to either remain the same or decline this year.