Airlines Market Report 2007
Key Note Publications Ltd, July 2007, Pages: 143
The revenue generated by UK airlines is estimated to have reached £16.74bn in 2006, a 9% increase on 2005. The number of passengers carried by UK airlines increased by 2.5% to 127.4 million in 2006, and the number of seat kilometres (km) used was up by 3.9% to 301.82 billion km.
Air passenger transport is undertaken on both scheduled and non-scheduled services. These represent the market's two main sectors. Scheduled services comprise the largest and fastest-growing sector: a result of the popularity of low-cost flights. By contrast, the number of passengers travelling on non-scheduled services fell again in 2006; in line with the trend for consumers to make their own travel arrangements and travel independently, rather than go on package or inclusive tours.
The non-scheduled airline sector is currently going through a period of consolidation. First Choice Holidays PLC — the owner of First Choice Airways Ltd — has announced plans to merge with TUI AG — which owns Thomsonfly. Furthermore, MyTravel Group PLC — the owner of MyTravel Airways Ltd — has recently merged with KarstadtQuelle AG, which owns Thomas Cook Airlines UK Ltd. The combined airlines that emerge from this activity are likely to dominate the charter airline sector in the UK for some years to come.
One of the most significant recent developments in the global airlines industry occurred in March 2007, when European transport ministers approved an open skies pact to liberalise the transatlantic airline market. The agreement means that any EU airline will be able to fly to any point in the US from anywhere within the EU, while any US carrier will be able to serve Heathrow and internal EU routes. The new agreement will take effect in April 2008, and will replace a number of bilateral open skies deals already signed between EU member states and the US. This includes the highly restrictive Bermuda Two agreement between Great Britain and the US, which allows only four airlines to fly transatlantic routes from Heathrow — British Airways (BA), Virgin, United Airlines and American Airlines.
We forecast that the number of passengers carried by UK airlines will continue to increase up to 2011. This growth is once again expected to come from the scheduled sector, which is likely to benefit from the extensive expansion plans of the budget airlines and the opportunities presented by the open skies agreement. Passenger numbers on non-scheduled flights are expected to slip further as consumers continue to favour independently arranged travel. The problems the airline industry is expected to encounter up to 2011 include: further increases in the price of oil; government taxation on air travel; higher airport charges; and the impact of environmental pressures on air travel policy.
REPORT COVERAGE
MARKET SECTORS
MARKET TRENDS
Consolidation in the Airlines Industry
Impact of Terrorist Alerts
Liberalisation of the Transatlantic Airline Market
Ryanair and easyJet Cut Air Fares
British Airways Faces Hefty Fine
ECONOMIC TRENDS
Population
Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 2002-2006
Gross Domestic Product
Table 2: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2002-2006
Inflation
Table 3: UK Rate of Inflation (%), 2002-2006
Unemployment
Table 4: Actual Number of Unemployed Persons in the UK (million), 2002-2006
Household Disposable Income
Table 5: UK Household Disposable Income Per Capita (£), 2002-2006
Market Position
The UK
Table 6: Passenger Transport Within Great Britain by Mode of Travel (billion passenger kilometres and %), 2002-2006
UK Passenger Movements
Table 7: UK Passenger Movements In and Out of the UK by Air and Sea (000 and %), 2004-2006
Overseas
Table 8: World and UK Scheduled Air Services by Passengers Carried (million and %), 2002-2006
Leading Tourist Destinations
Table 9: The World Top Ten Tourism Destinations in the World by International Tourist Arrivals (million and %), 2003-2005
2. Market Size
the total market
Table 10: The Total UK Air Travel Market by Value and Volume (£m and million), 2002-2006
By MARKET SECTOR
By Type of Service
Table 11: The Total UK Air Travel Market by Type of Service by Value (£bn and %), 2002-2006
Passengers Uplifted and Seat Kilometres Used
Table 12: Passengers Uplifted, Seat Kilometres Used and Freight Tonne Kilometres Used by UK Airlines on Scheduled and Non-Scheduled Services (million, million kilometres, million tonne kilometres and %), 2002-2006
Scheduled Services
Table 13: Scheduled Services of UK Airlines by Passengers Uplifted, Seat Kilometres Used and Freight Kilometres Used by International and Domestic Markets (million, million kilometres, million tonne kilometres), 2002-2006
Non-Scheduled Services
Table 14: Non-Scheduled Services of UK Airlines by Passengers Uplifted, Seat Kilometres Used and Freight Kilometres Used (million, million kilometres and million tonne kilometres), 2002-2006
By Nationality of Airline
Table 15: Terminal Passenger Numbers† at UK Airports by Type of Service and Nationality of Airline (000), 2002-2006
By Origin of Traveller
Table 16: Overseas Residents' Visits to the UK by Air by Travellers' Country of Residence (000), 2004-2006
By Destination of Traveller
Table 17: UK Residents' Visits Overseas by Air by Country Visited (000), 2004-2006
3. Industry Background
Recent History
Number of Companies
Table 18: Number of UK VAT-Based Enterprises Engaged in Scheduled and Non-Scheduled Passenger Air Transport, 2002-2006
Table 19: Number of UK VAT Based Enterprises Engaged in the UK Scheduled Passenger Air Transport Sector by Turnover Sizeband, 2002-2006
Table 20: Number of UK VAT Based Enterprises Engaged in the UK Non-Scheduled Passenger Air Transport Sector by Turnover Sizeband, 2002-2006
EMPLOYMENT
Table 21: Number of People Employed in the Scheduled and Non-Scheduled Air Transport Industry (000), 2002-2006
Table 22: Total Number of Employees of Major UK Airlines, 2001/2002-2005/2006
Regional Variations in the Marketplace
Table 23: Number of Scheduled and Non-Scheduled Passenger Air Transport Local Units by Government Office Region, 2006
Distribution
How Robust is the Market?
Table 24: Number of UK VAT-Based Enterprises Engaged in UK Scheduled and Non-Scheduled Passenger Air Transport by Age of Business (number of years and %), 2006
LEGISLATION
Domestic Legislation
European Regulation
International Regulation
The Civil Aviation Act 2006
KEY TRADE ASSOCIATIONS
Air Transport Users Council
Association of European Airlines
British Air Transport Association
Civil Aviation Authority
European Low Fares Airlines Association
The European Regions Airline Association
International Air Transport Association
International Civil Aviation Organization
4. Competitor Analysis
The Marketplace
Passengers Uplifted
Table 25: Total Number of Scheduled and Non-Scheduled Passengers Uplifted by UK Airlines (000), 2002-2006
Table 26: Scheduled and Non-Scheduled Passengers Uplifted by UK Airlines (% of total), 2002-2006
Seat Kilometres Used
Table 27: Seat Kilometres Used by UK Airlines (million), 2002-2006
MARKET LEADERS
Table 28: Selected Major UK Airlines by Turnover (£m), 2001/2002-2005/2006
British Airways PLC
Company Structure
Current and Future Developments
Financial Results
British Midland Airways Ltd
Company Structure
Current and Future Developments
Financial Results
easyJet Airline Company Ltd
Company Structure
Current and Future Developments
Financial Results
First Choice Airways Ltd
Company Structure
Current and Future Developments
Financial Results
Monarch Airlines Ltd
Company Structure
Current and Future Developments
Financial Results
MyTravel Airways Ltd
Company Structure
Current and Future Developments
Financial Results
Ryanair PLC
Company Structure
Current and Future Developments
Financial Results
Thomas Cook Airlines UK Ltd
Company Structure
Current and Future Developments
Financial Results
Thomsonfly Ltd
Company Structure
Current and Future Developments
Financial Results
Virgin Atlantic Airways Ltd
Company Structure
Current and Future Developments
Financial Results
OUTSIDE SUPPLIERS
Airports
Table 29: Number of Terminal Passengers at Major UK Airports (000 and %), 2002-2006
Aircraft and Component Manufacturers
MARKETING ACTIVITY
Table 30: Main Media Advertising Expenditure by Selected Airlines (£000), Year Ending March 2007
Exhibitions
5. Strengths, Weaknesses, Opportunities and Threats
6. Buying Behaviour
INTRODUCTION
Profile of UK Air Travellers
Table 31: Percentage of UK Residents Who Have Travelled by Air in the Last 12 Months (% of adults), 2002-2006
Table 32: Percentage of UK Residents Who Have Travelled by Air in the Last 12 Months by Number of Flights (% of adults), 2006
Table 33: Profile of UK Residents Who Have Travelled by Air in the Last 12 Months (% of adults), 2002-2006
Air Travel for Holiday or Pleasure
Table 34: Percentage of UK Adults Who Have Taken at Least One Flight for Holiday, Pleasure or Personal Reasons in the Last 12 Months by Selected Destination (% of all adults), 2006
Air Travel for Business
Table 35: Percentage of UK Adults Who Have Taken at Least One Flight for Business in the Last 12 Months by Selected Destination (% of all adults), 2006
THE INTERNATIONAL AIR TRAVEL MARKET
Table 36: Total UK and Overseas Residents' Visits by Air To and From the UK (000 visits and %), 2002-2006
MAIN PURPOSE OF VISIT
Table 37: Total UK and Overseas Residents' Visits by Air by Destination and Main Purpose of Visit (000 and %), 2002-2006
UK RESIDENTS' VISITS OVERSEAS
Table 38: UK Residents' Visits Overseas by Air by Destination and Main Purpose of Visit (000 and %), 2002-2006
Table 39: UK Residents' Share of the Total UK and Overseas Residents' Visits by Air by Destination and Main Purpose of Visit (%), 2002-2006
Overseas Destination by Mode of Travel
Table 40: UK Residents' Visits Overseas by Destination by Main Mode of Travel (000 visits), 2002-2006
UK Residents' Visits Overseas by Air by Purpose of Visit
Table 41: UK Residents' Visits Overseas by Purpose of Visit (000 and %), 2002-2006
OVERSEAS RESIDENTS' VISIT TO THE UK
Table 42: Overseas Residents' Visits to the UK By Air by Origin and Main Purpose of Visit (000 and %), 2002-2006
7. Current Issues
THE INTERNATIONAL SCENE
Liberalisation of the Transatlantic Airline Market
US Government Expected to Change Rules
THE POLITICAL SCENE
Air Industry Fights Green Taxes
Industry Unhappy with Increases in Air Passenger Duty
Honest Pricing
AIRLINE DEVELOPMENTS
British Airways Increases Fuel Charges
easyJet Urges EU to Get Rid of Old Aircraft
Over-Capacity Becoming a Problem
British Airways Calls for Inflation-Only Rises at Heathrow
CORPORATE ACTIVITY
LEGISLATION
Implementation of Regulation 261/2004
THE ENVIRONMENT
8. The Global Market
TOTAL MARKET SIZE
By Volume
Table 43: World Scheduled Revenue Traffic by Passengers Carried and Passenger Kilometres Performed (million and billion), 2002-2006
By Value
Table 44: Global Commercial Aviation Revenues ($bn), 2002-2006
Table 45: Global Commercial Aviation Expenses ($bn and %), 2002-2006
European Market
Table 46: Number of Air Transport Passengers and Passenger Kilometres Travelled by Association of European Airlines' Members on Scheduled Services (million and billion), 2002-2006
Table 47: Number of Air Transport Passengers of Association of European Airlines' Members by Domestic, Short-Haul and Long-Haul, Scheduled Flights (million and %), 2002-2006
Number of Passengers Carried by Airline
Table 48: Passengers Carried on Scheduled Services by Association of European Airlines Members (million and %), 2005 and 2006
FUTURE TRENDS
Table 49: International Civil Aviation Organization Scheduled Passenger Traffic Forecasts (billion passenger kilometres performed), 2007 and 2008.
9. Forecasts
INTRODUCTION
The Economy
Population
Table 51: Forecast UK Resident Population by Sex (000), Mid-Years 2007-2011
Gross Domestic Product
Table 52: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2007-2011
Inflation
Table 53: Forecast UK Rate of Inflation (%), 2007-2011
Unemployment
Table 54: Forecast Actual Number of Unemployed Persons in the UK (million), 2007-2011
FORECASTS 2007 to 2011
Table 55: Forecast Number of Passengers Uplifted by UK Airlines on Scheduled and Non-Scheduled Services (million and %), 2007-2011
Market Growth
Figure 1: Forecast Number of Passengers Uplifted by UK Airlines on Scheduled and Non-Scheduled Services (million), 2002-2011
FUTURE TRENDS
Open Skies Agreement
Airport Developments
Further Sector Consolidation
10. Company Profiles
British Airways Plc
British Midland Airways LTD
Easyjet Airline Company Ltd
First Choice Airways Ltd
Mytravel Airways Ltd
Thomas Cook Airlines Uk Ltd
Thomsonfly Ltd
Virgin Atlantic Airways Ltd
11. Consumer Confidence
METHODOLOGY
KEY FINDINGS THIS QUARTER
THE WILLINGNESS TO BORROW
Confidence Improves
Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007
Willingness to Borrow Slips Slightly
Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), February 2006-2007
SPENDING FROM SAVINGS
Slight Increase in Spending from Savings
Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007
Saving Grows in Relative Importance
Table D: The Average Amounts Adults Are Confident Spending to Purchase Expensive Items (£ and %), February 2006-2007
12. Further Sources
Associations
General Sources
Government Publications
Bisnode Sources
- British Airways PLC
- British Midland Airways Ltd
- easyJet Airline Company Ltd
- First Choice Airways Ltd
- Monarch Airlines Ltd
- MyTravel Airways Ltd
- Ryanair PLC
- Thomas Cook Airlines UK Ltd
- Thomsonfly Ltd
- Virgin Atlantic Airways Ltd
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