Airline Markets

Topics: Fractional Jets, Transport, Cargo Pages: 4 (1014 words) Published: August 9, 2012
The Changeable Nature of Air Transport Markets

Air transport markets are very changeable by nature. The aviation industry in general is usually the first industry to be affected by periods of economic instability and recession and the last to rebound back. Two markets that this report will focus on are that of Fractional Ownership Markets and Cargo Markets.

Fractional Ownership Market

This involves more affluent customers purchasing a share of an aircraft. It gives these customers/owners the benefits of ownership of a private aircraft, but with much reduced costs and less commitment that outright ownership of the aircraft would otherwise entail. The notable companies in this market include NetJets, Flexjet and Flight Options.

Even though operators are increasing their fleet numbers after they generally declined by 14% overall from a peak in 2008, it was stated as recently as August 2011 that Flight Options achieved a 467% increase in fractional share sales when compared to the previous year. In addition, Flexjet saw a 64% increase in its fractional aircraft share purchases in Quarter 1.[1]

During the period September 2010 to September 2011, fractional jet industry sales are up 16%, and at Flexjet the sales of its fractional aircraft shares are up by 92%, with its market share during this period of time increasing from 14% to 21%. [2]

After making a loss of $720 million in 2009, Netjets managed to return a rather impressive profit in a tough environment of $200 million in 2010. [3]

Looking further East, Gulfstream have stated that the Indian market will need another 250 aircraft to satisfy demand in the next 10 years [4], so it is clear there is confidence for future growth. Back in the West, this can be said to be true again especially when considering their latest aircraft, the G650, currently has an order back log of more than 5 years . Very impressive considering that the aircraft has not even entered service yet.

Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • vietnam airline Essay
  • Indigo Airlines Essay
  • Crm in Airlines Essay
  • singapore airline Essay
  • Sabena Airlines Essay
  • Airline Economics Research Paper
  • Essay on qantas airlines case
  • Essay on GMG airline

Become a StudyMode Member

Sign Up - It's Free