Increased air travel and new aircraft deliveries will boost demand for airport operators
Los Angeles, CA (PRWEB) October 28, 2013
The Airport Operations industry has benefited from the recovery of related air transportation industries over the past five years. Despite improving conditions in the years prior, revenue took a significant hit during the recession. Airport operators experienced a decline of 7.6% in revenue in 2009 due to plummeting demand from major airlines and lower passenger numbers. In 2010, major airlines announced capacity cuts, most of which remained in force. Higher fuel costs and slowing demand were the initial main drivers behind this decision; however, the receding economy took over as the major driver for capacity reductions. Since then, however, the industry has experienced positive revenue growth, as demand from domestic and international airlines has increased and travel rates have returned to normal. The industry is expected to charge ahead in 2013 as revenue jumps an estimated 4.3% to $21.2 billion. Despite such growth, over the five years to 2013, IBISWorld expects revenue to grow at an annualized rate of just 0.6%, as key markets have recovered slowly.
According to IBISWorld Industry Analyst Andy Brennan, “There is an increasing disparity within the industry between large international airports and regional airports that service local markets.” The most profitable airports in the United States are all international airports that can demand higher landing fees and rental rates for their buildings. These include Newark International, John F Kennedy International and Miami International Airports. Nevertheless, the Airport Operations industry has a low level of concentration. The concentration has remained relatively constant over the past five years, with operators continuing to struggle to gain larger market share in this mature industry.
“Air travel is expected to continue its ongoing recovery from the recession, leading to higher landing fees and airport activity,” says Brennan. Demand from domestic and international airlines is expected to grow, giving airports more bargaining power in negotiating landing fees and other charges.
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IBISWorld industry Report Key Topics
The Airport Operations industry includes businesses that operate international, national or civil airports or public flying fields. It also includes operators that support airports, offering aircraft refueling, aircraft parking, hangar space rental, air traffic control services, cargo handling services and others. This industry does not include wholesaling fuel at airports, providing janitorial services at airports, providing food services at airports and conversion and rebuilding of aircraft.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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