Downstream demand from the mining division is expected to peak over the next five years.
Melbourne, Australia (PRWEB) October 02, 2013
The activities of the Non-Scheduled Air Transport industry are numerous. The industry includes charter air transport for passengers and freight, air training for pilots, private air transport for individuals and businesses, aerial agriculture and rocket and satellite launches. This variety of activities helps diversify industry revenue streams. Despite the high volatility of individual products and service lines over the five years through 2013-14, industry revenue volatility has remained at a moderate level. Over this five-year period, the industry has grown at an annualised 2.8%. The industry is expected to grow 1.8% in 2013-14 to be worth $995.3 million.
Despite demand for services remaining strong, the economic downturn shook up the industry. Many of the industry's products and services are considered premium or luxury goods, which can be replaced by cheaper alternatives in times of economic strain. IBISWorld industry analyst Ryan Lin states “while non-scheduled airfreight provides a premium service in terms of speed and reliability, such services are easily replaced with cheaper, less convenient substitutes, such as road freight.” Revenue fell 6.8% during 2008-09 as demand contracted. Demand has since returned for industry services, as indicated by strengthening industry revenue from 2009-10 and the growth in the hours flown in general aviation since 2008-09. Strong competition and high capacity are expected in 2013-14. Despite these factors, the industry is forecast to remain stagnant over the five years through 2018-19. Profitability is expected to improve over the period as investment increases in newer, more fuel-efficient aircraft and the industry's most marginal operators pull out. On the other hand, rising oil prices pose a significant threat to the industry. Downstream demand from the Mining division is also projected to peak over the five years through 2018-19. According to Lin, “as mining projects become more established, competition from scheduled air services is expected to decrease demand for industry services, from the Mining division in particular and regional markets in general.”
The Non-Scheduled Air Transport industry operates with a low level of market share concentration. The top two companies, Jet Systems and Rex, have consistently held small market shares over the past five years. Over the past five years, the middle tier of the industry has been squeezed. Market share concentration at the top end of the industry has increased over the period, largely due to some industry consolidation. According to the Australian Bureau of Statistics, nearly 80% of industry entities employ less than 20 people. However, at the bottom of the industry, the percentage of non-employing enterprises has been increasing steadily over the five years through 2013-14, as operators target niche markets. The Non-Scheduled Air Transport industry is characterised by low ownership concentration. In most industries, low ownership concentration would result in intense competition. In this case, however, competition has shifted to other avenues. While competition does occur, it is often on a non-price basis. Consumer perceptions are that if prices are cut, then corners must also be cut and safety compromised. For more information, visit IBISWorld’s Non-Scheduled Air Transport report in Australia industry page.
Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau
IBISWorld industry Report Key Topics
Industry participants operate aircraft used in the transportation of passengers and freight on non-scheduled flights. These include fixed-wing aircraft (airplanes), helicopters, balloons and airships. The industry also includes space launches and companies mainly engaged in the operation of flying schools.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised 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 Australian 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 Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.