London, UK (PRWEB) October 16, 2012
The past five years were extremely turbulent for airlines operating in the Scheduled Passenger Air Transport industry. IBISWorld estimates industry revenue will grow slowly at a compound annual rate of 1.2% over the five years through 2012-13 to reach £19.5 billion. According to IBISWorld industry analyst Caroline Finch, “the industry is slowly recovering, with revenue growth of 4.2% expected in 2012-13”. With recovery uncertain in the eurozone, airlines will be nonetheless cautious about increasing capacity and are expected to offer further deals to attract consumers.
Profitability fell over the five years through 2012-13, starting with skyrocketing fuel prices leading up to 2008. A decline in demand for air travel and price wars followed in the subsequent years. As the industry took major blows in a highly unstable global environment, the average industry operator recorded either large drops in profit or extensive losses for the three years from 2007-08 to 2010-11. As the effects of the global downturn hit airlines, revenue fell by 11.8% in 2009-10. During the bitter year, airlines offered significant price cuts to curb the decline in passenger numbers. Airlines entered price wars, with many pricing airfares below the break-even margin.
The next five years will include a recovery period. Industry revenue is forecast to grow at a very marginal rate over the five years through 2017-18. Finch adds, “improving demand for air travel and rising prices will support revenue growth”. Demand for air travel will be strongest from emerging economies as they will recover faster than the domestic economy. However, price competition will limit revenue growth.
The Scheduled Passenger Air Transport industry has a high level of market share concentration, with the four largest players accounting for an estimated 90% of industry revenue. Industry concentration increased over the past five years following worldwide trends of airlines consolidating. Larger airlines expanded their operations via acquisitions and organically through increasing routes and capacity. Major companies include International Airlines Group, EasyJet and Virgin Atlantic.
For more information on the Scheduled Passenger Air Transport industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Companies in this industry provide air transport for passengers on scheduled routes only. This includes domestic and international flights.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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