Charter Flights in the US Industry Market Research Report from IBISWorld has Been Updated

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Strong competition from the scheduled air transportation market and high operating costs will continue to threaten businesses, but rising disposable income and corporate profit will help boost demand. For these reasons, industry research firm IBISWorld has updated a report on the Charter Flights industry in its growing industry report collection.

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Despite rising fuel costs, a healthier corporate sector will boost industry demand

Over the five years to 2012, industry revenue is estimated to grow at an average annual rate of 0.7% to $14.5 billion. The Charter Flights industry, which provides nonscheduled air transport services for passengers and cargo, has started to recover after a disappointing 2009, when industry revenue fell 12.6% due to overall declines in travel spending, particularly among corporate clients. In 2012, revenue is expected to grow 4.8% as per capita disposable income and corporate profit recover. The state of the economy and a number of travel-related trends are the main factors driving the industry. In 2009, the decline of the domestic economy and an increase in unemployment forced people to be more selective when spending disposable income. “As people and companies cut down spending across the board, they were less likely to spend money on luxuries like vacations and nonessential business trips,” says IBISWorld industry analyst Andrew Krabeepetcharat. When they did travel, they were more likely to fly commercial. In the past five years, consumers have begun to board commercial airline flights again, leaving the industry clamoring for more passengers. Competition with scheduled air transportation has resulted in fewer operators and downward pressure on profitability.

In the five years to 2012, the number of establishments is expected to drop to 14,948, representing an average annual decline of 1.7%. In response to these trends, companies have altered the services they provide in order to attract more customers, including products such as Jetcards, which give the buyer a certain number of private aircraft hours. The industry is particularly sensitive to changes in the corporate sector. A large proportion of revenue comes from business trips made by people like corporate executives, high flyers in the finance sector and miners flying out to work in remote areas. Since early 2009, businesses have taken a razor to corporate budgets and drastically cut funds for chartered and private flights. However, the economy began to improve in 2010, as some of the fears surrounding the state of the economy subsided and a larger proportion of consumers and businesspeople traveled. Despite these trends, industry profitability and demand will be threatened by rising fuel prices and the corresponding increase in charter flight costs.

The Charter Flights industry is classified as having a low level of concentration, with the four largest firms in the industry accounting for about 13.3% of industry revenue in 2012. Over 80.0% of companies operating in the industry are nonemployers, which means that the company itself accounts for one enterprise, establishment and employee. With such a large number of small companies, the charter flights industry is destined to have strong levels of competition with no one company holding significant market power. Industry concentration has been growing over the past five years. According to Krabeepetcharat, market share concentration has nearly doubled as a result of organic growth by some players as well as significant merger and acquisition activity. Companies that provide transport for mining firms have fared better than others during the past five years, due to a strong demand for commodities. These include PHI and Bristow Group, which provide helicopter transport for oil and gas. Two largest players, Air Transport Services and Atlas Air Worldwide Holdings have increased market share through acquisitions. For more information, visit IBISWorld’s Charter Flights in the US industry report page.

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IBISWorld industry Report Key Topics

Companies in this industry provide air transport services on an irregular or nonscheduled basis for passengers and cargo, which is also referred to as a charter arrangement. Industry operators allow people to fly where they want (in terms of destination and airport) and when they want, as opposed to commercial airlines that operate on a fixed schedule of destinations and times. This industry also includes scenic tours and sightseeing services.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
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