Charter Flights in The US Industry Market Research Report from IBISWorld Has Been Updated
Los Angeles, CA (PRWEB) July 23, 2013 -- Recovery in the Charter Flights industry is underway following a number of years of unexpected turbulence caused by the 2009 recession. The industry experienced a rough period in 2009 when industry revenue declined 13.3% due to a decline in travel and transport spending, particularly among corporate clients. “Since 2011, demand for nonscheduled air transport services has grown as the broader economy has improved, corporate profit has grown and per capita household income has increased,” says IBISWorld industry analyst Andy Brennan. Despite the recent recovery, the industry was so badly affected during the recession that industry revenue is expected to decline 1.7% per year on average over the five years to 2013. In 2013, growth is expected to be modest, with an uptick in industry revenue of 0.6% to $14.3 billion expected.
The state of the economy and a number of travel-related trends are the main factors driving the Charter Flights industry. In 2009, the decline of the domestic economy and increase in unemployment forced people to be more selective when spending disposable income. As people and companies cut down on spending across the board, they were less likely to spend money on luxuries like vacations and nonessential business trips. When they did travel, they were more likely to fly commercial. “The shift by many consumers and businesses to commercial flights has left the industry clamoring for more passengers,” adds Brennan. “Competition with scheduled air transportation has resulted in fewer operators and downward pressure on profitability.” The industry is classified as having a low level of concentration; the vast majority of companies operating in the industry are nonemployers. With such a large number of small companies, the charter flights industry is destined to have strong levels of competition with no one company holding significant market power. Industry concentration has been growing over the past five years. Market share concentration has nearly doubled as a result of organic growth by some players as well as significant merger and acquisition activity. The industry’s two major players, Air Transport Services Group and Atlas Air Worldwide Holdings, have increased market share through acquisitions.
The industry's performance is expected to improve over the next five years, driven by higher per capita income and corporate profit. As the economic environment continues to stabilize and businesses become more confident in their outlook, spending on luxury items such as chartered flights is anticipated to grow. Over the five years to 2018, industry revenue is projected to increase. Despite these trends, industry profitability and demand will continue to be threatened by rising fuel prices and the corresponding increase in charter flight costs. For more information, visit IBISWorld’s Charter Flights in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry provide air transport services on an irregular or nonscheduled basis for passengers and cargo, which is also referred to as a charter arrangement. Industry operators allow people to fly where they want (in terms of destination and airport) and when they want, as opposed to commercial airlines that operate on a fixed schedule of destinations and times. This industry also includes scenic tours and sightseeing services.
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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.
Gavin Smith, IBISWorld, 310 866 5042, [email protected]
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