• Airline
business confidence has improved to its highest level since January
2011, though that is not particularly strong - remaining lower than
late 2009 and 2010;
• Second quarter industry profits appear to have improved over the weak first quarter, but remain below last year’s results;
• Improved expectations for the next 12 months implies that airlines expect a stronger second half and better profitability in the first half of 2013;
• The main reason for the improvement in business confidence is a sharp fall in expectations for input costs, both reported for Q2 and expectations for the next 12 months;
• Yields on passenger markets are expected to improve modestly, suggesting an expected improvement in margins, but cargo yields are expected to decline further;
• Expectations for passenger market volumes also improved and cargo markets are expected to grow in the year ahead, having declined in the second quarter;
• Airlines are anticipating further improvements in productivity to help reduce non-fuel unit costs
• Second quarter industry profits appear to have improved over the weak first quarter, but remain below last year’s results;
• Improved expectations for the next 12 months implies that airlines expect a stronger second half and better profitability in the first half of 2013;
• The main reason for the improvement in business confidence is a sharp fall in expectations for input costs, both reported for Q2 and expectations for the next 12 months;
• Yields on passenger markets are expected to improve modestly, suggesting an expected improvement in margins, but cargo yields are expected to decline further;
• Expectations for passenger market volumes also improved and cargo markets are expected to grow in the year ahead, having declined in the second quarter;
• Airlines are anticipating further improvements in productivity to help reduce non-fuel unit costs
