Low-cost airlines help drive growth in passenger numbers.
Melbourne, Australia (PRWEB) November 28, 2013
The International Airlines industry's flight to success over the five years through 2013-14 began with some turbulence. The economic downturn of 2008-09 wiped away much of the growth achieved by the industry in the previous two years. Industry revenue fell 3.3% in 2008-09. Since then, revenue has been on the ascent. IBISWorld industry analyst Ryan Lin states, “The main reason for the upward trend has been solid growth in passenger numbers (partly due to favourable economic conditions in Australia and developing Asian countries) and record low prices from the growth of low-cost carriers.” Industry revenue is expected to record a compound annual growth rate of 5.1% over the five years through 2013-14, reaching $16.5 billion.
Major airlines have participated in price wars since the beginning of 2008-09 to attract higher passenger numbers. This competitive behaviour continued into 2009-10, albeit at a smaller scale. International airlines are expected to record 3.1% growth in revenue over 2013-14, as passenger numbers continue to increase. A number of airlines from different countries service the International Airlines industry in Australia. However, few enterprises have their headquarters in Australia. Qantas Airways Limited is headquartered in Australia and boasts the largest market share. Virgin Blue also offers international flights. Virgin Blue expanded its presence in the International Airlines industry through its subsidiary, V Australia, now branded Virgin Australia. Other major players include Singapore Airlines, Emirates and Air New Zealand. The industry is headed for another five-year period of revenue growth. Increasingly favourable conditions, such as solid income growth in Australia and Asia, will result in increased demand for travel. According to Lin, “Continual downward pressure on airfares, a weaker Australian dollar and strong competition on a global scale will partly offset the favourable conditions, although not enough to stop growth.”
The International Airlines industry has medium level of market share concentration. Besides the major airlines, there are a number of smaller airlines operating in regional areas of Australia only, operating scheduled flights to Pacific Islands or other surrounding countries in smaller aircraft. Market share concentration has fallen over the past five years. This indicates a growing level of competition in the industry and a mature market. There has been rising competition from low-cost airlines, specifically new entrants like Air Asia X and Scoot. These companies have outperformed the larger and more expensive airlines over the past five years, particularly during the economic downturn. For more information, visit IBISWorld’s International Airlines report in Australia industry page.
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IBISWorld industry Report Key Topics
The International Airlines industry provides air transportation of passengers or freight over regular routes and on regular schedules. These include any flights that either end or originate internationally. Airlines that provide scheduled domestic air transportation of mail on a contract basis are also included in this industry.
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
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