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The Changeable Nature of the Air Transport Markets

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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. …show more content…

In the business market it is clear to see that this market aims at providing a premium service which include luxuries, for example the use of airport lounges and bigger seats on the aircraft and people are willing to pay extra money for these luxuries. It is possible to assume that in times of recession and rising fuel costs that pricier seats, such as the seats in business and first class, would be less popular and harder to sell but that does not seem to be the case. IATA estimated that average ticket costs for business class flights have risen 8 percent in the first half of 2010. Business travellers make up 8 percent of overall passenger numbers but contribute 27 percent of ticket revenue, IATA said in its latest snapshot of the airline business. Premium travel has risen almost twice as far in percentage terms from its 2009 low as economy travel, but, such was the depth of the fall of the premium segment, current levels are still 10% below pre-recession peaks, whereas economy travel is now 5% above its pre-recession peak. The cargo market is expected to grow at a CAGR of 8.2% over the forecast period. Excluding the impact of the rapid post recession rebound in 2010, for the 2011-2014 period, the consensus view for air freight is that it will stabilize at 5% CAGR. This is slightly below the forecast growth in world trade (6%) suggesting a still conservative

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