London, United Kingdom (PRWEB) October 26, 2012
The overall aerospace sector experienced a significant shock during the recession, with demand for travel falling rapidly. Revenue in the Airports industry is projected to grow at a compound annual rate 0.1% over the five years through 2012-13. According to IBISWorld industry analyst Caroline Finch, “the onset of the global recession in 2008-09 and the continuing economic uncertainty have subdued growth in terminal passengers”. At the same time, airlines participated in aggressive price wars while reducing capacity. Over the five years to 2010-11, terminal passenger numbers declined at a compound annual rate of 1.3%. This has directly affected revenue, as airport operators charge airlines a service fee per passenger. Airport concessions also rely heavily on passenger volumes for their financial health, with rent taking nearly 40% of their revenue. For this reason, industry revenue fell during 2009-10 and again in 2010-11, with fewer passengers at terminals and fewer aircraft movements. The decline in revenue was relatively slow compared with other aviation sectors, offset by an increase in landing charges at Heathrow and Gatwick in 2008.
Finch adds, “industry revenue will continue to grow over the next five years to 2017-18, supported by a surge in tourist numbers due to the London Olympics and ongoing growth in air transport”. As the UK economy returns to stronger growth, demand for travelling will return to normal, as will the number of visitors into the United Kingdom. There will be some expansion to airport capacity, which will also contribute to growth in revenue, although this will be subdued.
The Airports industry has a medium level of market share concentration, as the three major players are estimated to hold a combined market share of just under 60% in 2012-13. Concentration is different among airport owners and providers of fixed-base operations. Airport ownership is highly concentrated while fixed-base operator services tend to have very low concentration and high competition. The major companies include BAA Limited, Gatwick Airport Limited and Manchester Airports Group.
For more information on the Airports 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
Airport operations include businesses operating international, national or civil airports or public flying fields. It also includes operators supporting airports, offering services such as air-traffic control services and ground service activities.
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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