Airline Markets

1030 words 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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International freight volumes fell by 3.8% in October 2011 and domestic freight fell by a marked amount with it, with a decrease of 4% year on year. This was a notable drop when compared to the previous months. International freight tonne kilometers (FTKs) also conveyed a decline similar to the others, with a decrease of 4.8%. [5]

Overall, because of the cost cutting imposed on companies over the past few years due to the unstable economy along with the aforementioned increase in the price gap between air transport when compared to sea freight and/or road haulage making more attractive alternatives, it was clear that the air cargo market was going to suffer somewhere along the way. However, very recent results have been promising, and many companies, particularly those in the Middle East are remaining optimistic about the future ahead.

Word Count: 989

Bibliography

[1] National Business Aviation Association 2011, Fractional Aircraft Ownership Grows As Added Programs Drive Value Perception [online], Available from: http://www.nbaa.org/news/2011/20110808-fractional-aircraft-ownership-grows.php [Accessed: 28.01.2012]

[2] Elite Traveller 2012, Flexjet Reports Strong Private Jet Trends [online], Available from:

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