The global recession caused some turbulence, but the industry righted itself and maintained strong growth
Los Angeles, CA (PRWEB) February 05, 2013
The Global Airport Operation industry is growing. Over the five years to 2012, industry revenue has increased at an estimated annualized rate of 3.5% to $120.3 billion, including a 4.9% jump in 2012. The strong growth will stem from passenger numbers recovering an estimated 4.7% and operators increasing prices. Industry operators continue to recover from the global recession, which caused industry revenue to fall 1.9% in 2009. During the recession, airport operators faced falling demand from major airlines and lower passenger numbers. “Despite tougher times in 2008 and 2009, the industry experienced a wave of new airport developments in major growth regions across the world,” says IBISWorld industry analyst Radia Amari. These expansions in developing economies, primarily in the Middle East and Asia, will promote international air travel around the world.
The industry took advantage of some favorable conditions before 2007 and built a strong level of profitability. However, profit margins showed signs of weakening in 2008 as high fuel prices squeezed airlines. Airports responded with lower fees, which resulted in slimmer margins. Industry profit came under greater pressure in 2009 with the general decline in the industry's operating environment. Profit margins reached a low of 9.4%, but have since recovered to an estimated 15.9% in 2012. Margins widened as airport traffic picked up and operators underwent cost cutting and consolidation. Airport operators will achieve steady profit growth over the next five years. The greater number of privately run airports will lead to efficiency gains and wider profit margins. The Global Airport Operation industry will continue to gain altitude over the next five years. The industry will grow as demand for air travel continues its upward trajectory. Higher traffic volumes will result in major airlines offering greater flight capacity. According to Amari, airport activity will mount and lift industry revenue, particularly in developing economies. Major developments in the Middle East and Asia will reap rewards for airport operators in these regions. Growing incomes in Asia will lead to rapid industry growth in the region. As such, global airport revenue will increasingly come from Asia. According to the Airports Council International, Asia-Pacific will remain the fastest growing region within the industry.
The Global Airport Operation industry has a low level of market share concentration. In 2012, the four largest major players account for an estimated 13.6% of industry revenue. Airports are spread across every country around the world. Some airports generate higher revenue because of destination desirability and their ability to act as a stopover point. In areas where privatization of airports has occurred, some companies own more than one airport. This has increased the related companies' market power in the industry. These countries are primarily in Western countries. For more information, visit IBISWorld’s Global Airport Operation industry report page.
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IBISWorld industry Report Key Topics
The industry includes businesses that operate international, national or civil airports or public flying fields. It also includes operators that support airports (except special food-services contractors), offering aircraft refueling, aircraft parking, hangar space rental, air traffic control services, baggage handling services, cargo handling services and others. A fixed-base operator (FBO) commonly provides these services.
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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