Essay on Airline Markets

1019 Words Aug 17th, 2012 5 Pages
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.
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As the market generally relies on the more affluent consumer and the super rich, it is likely that it will be less affected by periods of economic instability, and certainly one for the first markets to bounce back after such events.

Cargo Market

This market has generally managed to rebound after the period the period of economic uncertainty that affected many industries, from which began from 2008 onwards due to economic instability along with recent political unrest and the natural disasters seen over recent times.

Top performing international cargo carriers in 2010 included FedEx, Emirates, Korean Air, and UPS. FedEx transported more than 6,949,000 tonnes. In second place was UPS, who shipped 4,509,000 tonnes. Third came Korean Air after transporting 1,805,000 tonnes of freight and in fourth place was Emirates with 1,767,000 tonnes. [8]

Taking a look closer look at the Middle East, concentrating on Emirates’ financial report for the year 2010 - 2011, their cargo revenues increased 27.6%from AED6,889 million in 2009-2010 to AED8,803 million in 2010-2011. [6]

Cargo carried by the airline increased by 11.8% from 1,580 tonnes per ‘000 in 2009-2010 to 1,767 tonnes per ‘000 during 2010-2011. [7]

However, although companies like Emirates reported strong results for the 2010-2011 financial year, recent trends once again show a decline in growth in the market.

IATA has reported that this shrinking