The Changeable Nature of the Air Transport Markets

Topics: Boeing 787, Airbus A350, Competition between Airbus and Boeing Pages: 4 (1286 words) Published: March 8, 2013
The Changeable Nature of the Air Transport Markets

Over the last five years the air transport markets were marked by three main crucial events; the economic recession, the rise in fuel prices and terrorism. All these factors had an enormous effect on the passenger market, which included business (network carriers, business focused carriers, fractional ownership and private charters), the leisure industry (network carriers, scheduled carriers and charter carriers) and the cargo market, which is divided in scheduled combination carriers (passenger & cargo and all cargo carrying aircraft) and all-cargo (integrators, airport to airport and charter). Recessions tended to hit the industry every 6-9 years and last for 2-3 years at a time. Appendix A depicts the available seat kilometers (ASKs – 1 ASK = 1 seat flown 1 km) and the revenue passenger kilometers (RPKs) from 1960 to 2008. In this time, the industry has been hit five times.

Looking at the passenger market, despite all the negative aspects that characterises the economy at the moment, the International Air Transport Association (IATA) predicted that there will be an increase of 3.3 billion passengers by 2014, up by a third from 2.5 billion passengers in 2009. Growth will be driven by strong economic activity in Asia which will act as a key driver to the industry’s expansion. Announcing the forecast, IATA Director General and CEO Giovanni Bisignani said: “The focus of the industry continues to shift eastward. By 2014, one billion people will travel by air in Asia Pacific. That’s 30% of the global total and a 4ppt increase from the 26% it represented in 2009”.

Despite some regional differences, the forecast indicates that the world will continue to become more mobile. This creates enormous opportunities but also presents some challenges. In five years, there will be the need to handle 800 million more passengers. To realise the economic growth potential that this will bring, there...
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