Domestic Airlines in Australia Industry Market Research Report Now Updated by IBISWorld

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Industry operators slashed prices in response to declining demand and rising competition. For this reason, industry research firm IBISWorld has updated its report on the Domestic Airlines industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

Profit margins are expected to recover over the next five years as Qantas and Virgin relax competition.

The past five-year period for operators in the Domestic Airlines industry in Australia started on the back foot, with deteriorating global economic conditions causing a drop in industry revenue in 2008-09 and 2009-10. A high Australian dollar prompted travellers to make international travel plans instead of travelling domestically. According to IBISWorld industry analyst Ryan Lin, “some business travellers abandoned air travel in favour of teleconferences and other forms of electronic communication.” Demand also weakened as Australian tourists shelved travel plans, with consumer confidence falling.

In response to declining demand and rising competition, operators slashed prices. The heavy discounting and reductions in the fuel excise resulted in passenger numbers stabilising in 2009-10 and 2010-11. As a result, IBISWorld expects industry revenue to grow at an annualised 2.6% over the five years through 2014-15, to reach $15.2 billion. “Passenger traffic is expected to continue its upward trend in 2014-15 due to a sustained rise in discretionary incomes since 2009-10,” says Lin. Industry revenue is forecast to grow by 3.0% in 2014-15 as the Australian dollar softens, spurring domestic travel demand. The industry has a high level of market share concentration. Major players include Qantas Airways Limited and Virgin Australia Holdings Limited.

Domestic airlines have reduced capacity, cut underperforming routes and discounted prices to align supply with demand and attract more passengers. Strong price competition from low-cost airlines has prevented a major recovery in profit margins. However, as Qantas and Virgin relax their competitive stance, profit margins are expected to recover over the next five years. Over the next five years, the Domestic Airlines industry is expected to grow as demand for air travel rises, especially from the high-growth Asian region. However, higher fuel prices will lift airfares and constrain potential industry revenue growth. The level of competition is expected to remain high.

For more information, visit IBISWorld’s Domestic Airlines industry in Australia report page.

Domestic airlines operate aircraft on scheduled domestic routes, for the transportation of passengers and freight.

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IBISWorld industry Report Key Topics

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised 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 Australian 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 Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
IBISWorld
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