The International Air Transport Association (Iata) – the representative body for the global airline industry – has released its Airline Business Confidence Index for July. This shows that business confidence within the sector has started recovering, albeit slowly.

The index is based on a survey of airline chief financial officers and heads of cargo. They reported that a slow recovery in air travel demand during the second quarter of this year had brought some relief to the financial circumstances of their airlines. In absolute terms, passenger demand during the quarter remained low, but the executives surveyed were optimistic that it would increase over the next 12 months.

They also expected air cargo demand to remain high, thereby continuing to support revenues. No fewer than 73% of those surveyed reported that cargo demand had been higher during the second quarter of this year than it had been during the same period last year. And 72% believed that cargo demand would increase over the next months. In the April index, the proportion of executives who had expected an increase in air cargo over the following 12 months had been much lower – 56%.

The second quarter of this year also saw a continued downsizing of airline workforces, as carriers continued to restructure, to address the consequences of the Covid-19 pandemic. No fewer than 55% of the survey respondents reported such ongoing job cuts. But only 15% believed that there would be further staff reductions over the next 12 months. In the April survey, that figure had been 24%.

Iata currently forecasts that global air passenger demand will recover to 2019 levels during 2023. Of the executives surveyed for the July index, 52% agreed with this date. They expected North America to recover first and Africa to recover last.

Regarding yields, 54% of the respondents reported that those for passenger traffic had seen no change, or had decreased, during the second quarter (compared to the second quarter last year). This was because of attempts by airlines to stimulate demand by cutting fares. The other 46% reported that their passenger yields had increased. As for air cargo, 69% reported that they had increased or at least stayed the same. Cargo yields continued to be supported by limited air cargo capacity.