Airline confidence at a 10 year high, although risks to outlook remain

31 October, 2017

IATA's third Business Confidence survey for 2017 puts airline confidence at a 10 year high. In fact, no airline CFOs and heads of cargo interviewed expect their passenger or freight volumes to decline in the year ahead.

This is only the second time this astonishing result has occurred in the 11 years of the survey (the last time being Jun-2017). IATA stated this industry confidence is "consistent with the general degree of optimism about the breadth and depth of the current economic upturn".

While this is a positive outlook, all those surveyed agreed that certain risks remain, including:

  • Moves by Central Banks in developed nations to slowly increase interest rates and reverse the highly supportive monetary policies of the past eight years;
  • High valuations of asset prices and the level of both private and public indebtedness, which has risen considerably since the global financial crisis;
  • Widespread rise of populist pressures on policy, including creeping soft protectionism, along with geopolitical tensions in various regions around the globe also represent a source of risk to the favourable outlook.

IATA added that now may be the time for airlines to take advantage of the current operating environment to further strengthen both business models and balance sheets to ensure that the industry is robust and resilient to a "potentially less benign future scenario".

Source: IATA Business Confidence Survey