Depreciation of the Australian dollar is expected to cause industry focus to swing back towards outbound freight services.
Melbourne, Australia (PRWEB) August 08, 2013
The [Air Freight Services industry has grown at a compound annual rate of 4.4% over the past five years to be worth an estimated $3.2 billion in 2013-14. IBISWorld industry analyst Caroline Finch states “the industry has recovered ground from the lows of the base year 2008-09, when the global financial crisis rocked the global aviation industry and supressed demand for freight services.” In the past five years, the industry's performance has strengthened due to increased global trade flows. Successive global and bilateral trade agreements have supported more trade in goods. In addition, advances in communications technology have expanded the scope of international trade in goods and services. Both trends have led to shifts in demand for industry services. Consumers in Australia are now ordering books, clothes and electronics from overseas retailers. Inbound freight services have performed the strongest, due to favourable conditions for importers. Outbound freight exports have stagnated, as the high Australian dollar limited the ability of Australian exporters to compete in overseas markets.
The [Air Freight Services industry is sensitive to macro-economic drivers, such as the trade-weighted index. As the Australian dollar weakens, the focus of industry activities is expected to swing back towards outbound freight services. The next year is expected to mark a period of adjustment for the industry. Revenue is forecast to stagnate with a slight decline of 0.3% in 2013-14. According to Finch, “the weakening of the dollar is also expected to put pressure on industry operators over the next five years, as changes in exchange rates affect the price of aviation fuel.” In addition, the world price of crude oil is expected to increase. As fuel is the industry's most volatile area of expense, this is likely to put pressure on profit margins over the period. In the five years through 2018-19, the industry is expected to continue on its revenue growth trajectory as total demand for airfreight services expands.
Market share concentration in the industry is medium. The industry is fragmented despite the high barriers to entry that exist in the aviation sector. Over the past five years, the level of market share concentration has been steady, but the shares held by individual participants have shifted. In the domestic market, Virgin Australia Holdings Ltd has gained ground through acquisitions. Internationally, Singapore Airlines have increased capacity on routes involving Australia. Such airlines have also taken market share. In the next five years, the trend of market share shifting away from Qantas Holdings Limited is expected to continue. The industry’s major players are Qantas Airways, Singapore Airlines, Emirates Group and Cathay Pacific Airways. For more information, visit IBISWorld’s [Air Freight Services report in Australia industry page.
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IBISWorld Industry Report Key Topics
The industry includes businesses that provide domestic and international airfreight services for freight and mail.
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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