Flying High: International Airlines in the US Industry Market Research Report Now Available from IBISWorld

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International airlines felt the full effect of the recession, with revenue plummeting as a result of increasingly low demand and high crude oil prices. The industry is expected to make a strong recovery over the next five years, though, as consumer sentiment improves and the rate of travel among international visitors rises. Additionally, the adoption of open skies agreements will positively affect travel between the United States and Europe, with the removal of borders and restrictions resulting in growth. For these reasons, industry research firm IBISWorld has added a report on the International Airlines industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Open skies agreements and more international visitors will bolster demand

The International Airlines industry has experienced its share of ups and downs during the past five years. Between 2007 and 2008, airlines experienced sustained growth on the back of rising air travel rates. In 2009, though, international airlines experienced one of their worst years, with revenue dropping 20.6%, pressured by a collapse in demand, capacity cuts and plummeting prices. “Fortunately, airlines were able to turn the corner in 2010 and 2011, thanks to hefty cost-cutting measures and an increase in travel demand,” says IBISWorld industry analyst Nima Samadi. Because of the roller-coaster performance, he estimates revenue will grow at an annualized rate of 0.8% to $55.7 billion over the five years to 2012. During 2012, operators will increase capacity slowly as travel demand continues to recover. As a result, industry revenue is estimated to grow 5.0% in 2012.

International Airlines industry concentration has risen to a high level during the past five years. “Over the period, poor profitability and rising competition have forced some airlines out of business, leading to industry consolidation and falling participation,” explains Samadi. In November 2011, American Airlines filed for bankruptcy protection. A high-profile merger occurred between Delta Air Lines and Northwest in 2008, leading to the creation of the world's largest airline at the time. But in 2010, United Airlines and Continental Airlines merged, placing United Continental Holdings above Delta as the world's largest airline. Over the five years to 2012, the number of firms is estimated to decline an average 0.8% per year to 172, with industry employment also falling 1.5% per year on average to 96,310. The industry’s high level of concentration implies little scope for new entrants into the industry. Possible entries include companies servicing niche markets and to a certain extent competing with the majors.

Open skies agreements and international tourists coming to the United States will aid demand for industry services over the next five years. These tourists are the industry's major driver and will be encouraged by further cyclical depreciation of the US dollar. Future profit will largely depend on volatile fuel prices, an airline's ability to successfully hedge against their movement and increases in the cost of greenhouse gas emissions. New fuel-efficient aircraft will aid this cause and increase operator competitiveness in the global market. For more information, visit IBISWorld’s International Airlines in the US industry report page.

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IBISWorld industry Report Key Topics

The International Airlines industry provides air transportation of passengers and cargo over regular routes and on schedules. These services include any flights that either end or originate internationally. Scheduled air passenger carriers, including commuter and helicopter carriers (except scenic and sightseeing), are included in this industry. Airlines that provide scheduled international air transportation of mail on a contract basis are also included in this industry.

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 http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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