Price stability during the past three years has been the net result of rising demand, high competition and trends in suppliers’ input costs, including declining wage and fuel costs
Los Angeles, CA (PRWEB) February 19, 2015
Helicopter charter services have a buyer power score of 3.7 out of 5, indicating moderate negotiating power for buyers. This market's diversification, in conjunction with general economic growth, has kept demand strong during the past three years. “Most carriers have customers from many industries because they transport passengers for business and leisure and also cater to their regional market's demand for additional services (e.g. aerial surveys, filming, freight, external lifting, agricultural spraying and forestry support),” according to IBISWorld business research analyst Andrew Krabeepetcharat. Additionally, demand for charter helicopters has risen with the domestic oil and gas boom; the market's largest carriers specialize in servicing offshore drilling rigs, and many smaller carriers transport equipment to remote onshore well sites.
Despite the extent of demand growth, prices for helicopter charter services have been stable during the past three years. Price growth has been restrained primarily by declines in suppliers' fuel and wage costs, which have countered the upward pressure on price. Finally, this market has a low level of market share concentration due to the regional scope of most carriers' operations, which stems from the relatively short flying range of helicopters. Although the market's largest suppliers (Bristow Group, PHI and CHC Group) have grown considerably, their higher pricing power affects only a minor share of this market's buyers engaged in offshore drilling. “Most buyers purchase services from small, diversified carriers that operate regionally, and this much larger market segment has remained fragmented and attracted new entrants in the past three years. As such, the overall market has a high level of competition, which occurs on the bases of price, service, location and aircraft quality, benefiting buyers,” Krabeepetcharat says.
The main market characteristic that detracts from buyer power is low substitute availability. Helicopters can access areas that cannot be accessed by planes or modes of surface transportation, making many buyers dependent on helicopter charter carriers. Also, buyers may incur surcharges during periods of fuel price escalation. The volatility of fuel price increases the risk of upward shifts in the total cost of services. For more information, visit IBISWorld’s Helicopter Charter Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of helicopter charter services. Helicopter charter carriers transport passengers and may also offer a range of additional transportation and lifting services. This market’s carriers serve buyers’ needs on a charter basis, meaning their flights do not operate on regular schedules.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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