GENEVA: July 26, 2018. An IATA survey of airline heads of Cargo and CFOs in July suggests operating profit margins came under increasing pressure during the second quarter this year.

Some 54 percent of respondents said they expect to see further cost increases in the next 12 months as a result of higher fuel prices. However 57 percent expect increased profitability due to rising passenger and freight yields.

The outlook for cargo demand has softened slightly in the past two surveys, which partly reflects uncertainty caused by the recent pick-up in global trade tensions says IATA. Nonetheless 58 percent of respondents expect airfreight volumes to rise further in the year ahead.

Almost two-thirds (65 percent) of those surveyed reported a rise in air cargo volumes in Q2 compared to a year ago. Despite the recent pick-up in trade tensions between the US and China, IATA says a number of respondents noted demand remains strong on key Atlantic and Pacific routes.

Following the rise in cargo yields in the second half of 2017, 58 percent of the IATA respondents reported an increase in freight yields in Q2 2018 – the highest percentage since October 2010. At the same time the proportion of executives who expect freight yields to decline over the next 12 months fell to an eight-year low of four percent.

Pictured: Boeing and Low-Cost Carrier (LCC) Jeju Air celebrated the delivery of the airline's first direct-buy Next-Generation 737-800 airplane this week. Jeju Air has become the first LCC in Korea to own and operate the type.