Airlines

Market Report 2008 Nineteenth Edition July 2008

Publication Date	July 2008
Publisher	Key Note
Product Type	Report
Pages	133
ISBN Number	not applicable
Product Code	KEY00052

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Summary

The revenue generated by UK airlines is estimated to have reached 17.32bn in 2007, a 4.1% increase on 2006. The number of passengers carried by UK airlines increased by 3%, to 131.2 million in 2007, and the number of seat kilometres (km) used rose by 4.7%, to 315.87 billion km.

Air-passenger transport is undertaken on both scheduled and non-scheduled services. The scheduled sector, which includes low-cost carrier services, is the markets largest and fastest-growing sector. Non-scheduled flights, which include holiday charter flight operator services, have generally been contracting for a number of years - a result of the growing trend towards independent travel, as opposed to package or inclusive tours.

The rising price of oil is presenting the airline sector with a major challenge.

Between 2007 and 2008, the cost of jet fuel increased by around 80%.

Oil accounts for a third or more of most airlines operating costs, therefore oil price increases are impacting significantly on their profitability. Between January and April 2008, up to 12 airlines around the world - including the US-owned Eos Airlines, which operated flights between London Stansted and JFK in New York, and Oasis Hong Kong Airlines, which operated scheduled services to Gatwick from its Hong Kong base - ceased trading. The Isle of Man-based airline EuroManx also ceased trading in May 2008, and further airline closures during the rest of the year are expected. Early in June 2008, Ryanair announced that, if oil prices remained at their current rate, the company would only break even in the upcoming financial year.

The EU-US Open Skies Agreement, which marks the start of a new era in transatlantic aviation, came into effect on 30th March 2008. The agreement allows any airline of the EU and any airline of the US to fly between any two points in the regions. US airlines are also allowed to fly between points in the EU. The agreement removes restrictions on routes, prices or the number of weekly flights and also establishes closer co-operation between the EU and the US in areas such as security and the environment.

Although, Key Note forecasts long-term growth in demand for air transport, the rate of increase in the immediate term (2008 and 2009) could be affected by the general slowdown in the economy. The growth that will be achieved between 2008 and 2012 will, once again, come from the expansion of the low-cost scheduled services sector, while passenger numbers on non-scheduled flights are projected to slide further, as consumers continue to favour independently arranged travel. The problems the industry will continue to encounter up to 2012 include increasing oil prices, government taxation on air travel and rising airport charges.

Content

1. Market Definition
- Report Coverage
- Market Sectors
- Market Trends
- The Price of Fuel
- Economic Trends
- Population
- Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 2003-2007
- Gross Domestic Product
- Table 2: UK Gross Domestic Product at Current and
- Annual Chain-Linked Prices (gm), 2003-2007
- Inflation
- Table 3: UK Rate of Inflation (%), 2003-2007
- Unemployment
- Table 4: Actual Number of Unemployed Persons in The UK (Million), 2003-2007
- Household Disposable Income
- Table 5: UK Household Disposable Income per Capita (g), 2003-2007
- Market Position
- The UK
- Table 6: Passenger Transport within Great Britain by Mode of Travel
- (Billion Passenger Kilometres and %), 2003-2007
- UK Passenger Movements
- Table 7: UK Passenger Movements in and out of The UK by Air and Sea
- (000 and %), 2005-2007
- Overseas
- Table 8: World and UK Scheduled Air Services
- by Passengers Carried (Million and %), 2003-2007
- Leading Tourist Destinations
- Table 9: The Worlds Top Ten Tourism Destinations by International
- Tourist Arrivals (Million and %), 2005 and 2006
2. Market Size
- The Total Market
- Table 10: The Total UK Air Travel Market by Value and Volume (gm, Million,
- Million Kilometres and Million Tonne Kilometres), 2003-2007
- by Market Sector
- by Type of Service
- Table 11: The Total UK Air Travel Market by Type of Service
- by Operating Revenue (gm and %), 2003-2007
- Passengers Uplifted and Seat Kilometres Used
- Table 12: Passengers Uplifted, Seat Kilometres Used and Freight Kilometres Used by
- UK Airlines on Scheduled and Non-Scheduled Services (Million, Million Kilometres,
- Million Tonne Kilometres and %), 2003-2007
- 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 and Million Tonne Kilometres), 2003-2007
- Non-Scheduled Services
- Table 14: Non-Scheduled Services of UK Airlines by Passengers Uplifted, Seat Kilometres Used
- and Freight Kilometres Used by International and Domestic Markets (Million, Million
- Kilometres and Million Tonne Kilometres), 2003-2007
- by Nationality of Airline
- Table 15: Terminal Passenger Numbers at UK Airports by Type of Service by Nationality
- of Airline (Million), 2003-2007
- by Origin of Traveller
- Table 16: Overseas Residents Visits to The UK by Air by Travellers Country
- of Residence (000), 2005-2007
- by Destination of Traveller
- Table 17: UK Residents Visits Overseas by Air by Country Visited (000), 2005-2007
3. Industry Background
- Recent History
- Number of Companies
- Table 18: Number of UK Vat-Based Enterprises Engaged in Scheduled
- and Non-Scheduled Air Passenger Transport, 2003-2007
- Table 19: Number of UK Vat-Based Enterprises Engaged in The Scheduled
- Air-Passenger Transport Sector by Turnover Sizeband, 2003-2007
- Table 20: Number of UK Vat-Based Enterprises Engaged in The Non-Scheduled
- Air-Passenger Transport Sector by Turnover Sizeband, 2003-2007
- Employment
- Table 21: Number of People Employed in The Scheduled and Non-Scheduled
- Air Transport Industry (000), 2003-2007
- Table 22: Total Number of Employees of Major UK Airlines, 2002/2003-2006/2007
- Regional Variations in The Marketplace
- Table 23: Number of Scheduled and Non-Scheduled Passenger Air Transport
- Local Units by Government Office Region, 2007
- Distribution
- How Robust Is The Market?
- Table 24: Seat Kilometres Available and Seat Kilometres Used on Scheduled
- and Non-Scheduled Services (Million Kilometres and %), 2003-2007
- Table 25: Number of UK Vat-Based Enterprises Engaged in UK Scheduled
- and Non-Scheduled Air Passenger Transport by Age of Business
- (Number of Years and %), 2007
- Legislation
- Key Trade Associations
- Air Transport Users Council
- Association of European Airlines
- British Air Transport Association
- Civil Aviation Authority
- European Low Fares Airline Association
- European Regions Airline Association
- International Air Transport Association
- International Civil Aviation Organization
4. Competitor Analysis
- The Marketplace
- Passengers Uplifted
- Table 26: Total Number of Scheduled and Non-Scheduled Passengers Uplifted
- by UK Airlines (000), 2003-2007
- Table 27: Scheduled and Non-Scheduled Passengers Uplifted by UK Airlines
- (% of Total), 2003-2007
- Seat Kilometres Used
- Table 28: Seat Kilometres Used by UK Airlines (Million Kilometres), 2003-2007
- Market Leaders
- Table 29: Selected Major UK Airlines by Turnover (gm), 2002/2003-2006/2007
- British Airways Plc
- British Midland Airways Ltd (Bmi)
- Easyjet Airline Company Ltd
- First Choice Airways Ltd
- Flybe Group Ltd
- Jet2.Com Ltd
- Monarch Airlines Ltd
- Ryanair Holdings Plc
- Thomas Cook Airlines UK Ltd
- Thomsonfly Ltd
- Virgin Atlantic Airways Ltd
- outside Suppliers
- Airports
- Table 30: Number of Terminal Passengers at Major UK Airports
- (000 and %), 2003-2007
- Aircraft and Component Manufacturers
- Marketing Activity
- Table 31: Main Media Advertising Expenditure by Selected Airlines (g000),
- Year Ending March 2008
- Exhibitions
5. Strengths, Weaknesses, Opportunities and Threats
- Strengths
- Weaknesses
- Opportunities
- Threats
6. Buying Behaviour
- Introduction
- Air Travellers in Great Britain
- Table 32: Residents of Great Britain Who Have Travelled by Air in The
- Last 12 Months (% of Adults), 2003-2007
- Table 33: Penetration of Air Travel among British Residents in The Last 12 Months
- by Number of Flights Taken (% of Adults), 2006 and 2007
- Table 34: Profile of UK Residents Who Have Travelled by Air in The Last 12 Months
- by Sex, Age and Social Grade (% of Adults), 2003-2007
- The Most Popular Destinations
- Table 35: Percentage of UK Adults Who Have Taken at Least One Flight in The
- Last 12 Months by Selected Destination by Sex, Age, Social Grade and Region
- (% of Adults), 2007
- The International Air Travel Market
- Table 36: Total UK and Overseas Residents Visits by Air
- to and from The UK (000 and %), 2003-2007
- Main Purpose of Visit
- Table 37: Total UK and Overseas Residents Visits by Air by Destination and
- Main Purpose of Visit (000 and %), 2003-2007
- UK Residents Visits Overseas
- Table 38: UK Residents Overseas Visits by Air by Destination and Main Purpose of Visit
- (000 and %), 2003-2007
- Table 39: UK Residents Share of The Total UK and Overseas Residents Visits by Air
- by Destination and Main Purpose of Visit (%), 2003-2007
- Overseas Destination by Mode of Travel
- Table 40: UK Residents Overseas Visits by Destination by Main Mode of Travel
- (000), 2003-2007
- Purpose of Visit
- Table 41: UK Residents Overseas Visits by Purpose of Visit (000 and %), 2003-2007
- Overseas Residents Visits to The UK
- Table 42: Overseas Residents Visits to The UK by Air by Origin and Main Purpose
- of Visit (000 and %), 2003-2007
7. Current Issues
- The International Scene
- EuVus Open Skies
- Eu Scraps Plans for Limits on Hand Luggage
- The Political Scene
- Reform of Passenger Air Duty
- Caa Price Control Review
- Baa Airport Ownership Criticised
- Caa Could Be Stripped of Powers
- Biggest-Ever Consultation on Airspace Change
- Low-Cost Airlines airspace Manifesto
- Airline Developments
- The T5 Effect
- Impact of Rising Oil Prices on Airlines
- Additional Routes
- Corporate Activity
- The Environment
8. The Global Market
- Total Global Market Size
- by Volume
- Table 43: World Scheduled Revenue Traffic by Passengers Carried and Passenger
- Kilometres Performed (Million and Billion Kilometres), 2003-2007
- European Market
- Table 44: Number of Air Transport Passengers and Passenger Kilometres Travelled
- by Association of European Airlines Members on Scheduled Services
- (Million and Billion Kilometres), 2003-2007
- Table 45: Number of Air Transport Passengers of Association of European
- Airlines Members by International Short/Medium-Haul Domestic and Long-Haul
- Scheduled Flights (Million and %), 2003-2007
- Number of Passengers Carried by Airline
- Table 46: Passengers Carried on Scheduled Services by Association of
- European Airlines Members (Million and %), 2007
- Future Global Trends
- Table 47: Annual Average Forecast Growth Rate in International Air Passenger
- Numbers (%), 2007-2011
- Table 48: International Air Passenger Traffic Growth by Major Routes (Average
- Annual Growth Rate %), 2007-2011
- Table 49: Forecast Global Air Passenger Traffic Shares (% by Routes), 2011
9. Forecasts
- Introduction
- Economic Trends
- Population
- Table 50: Forecast UK Resident Population by Sex (000), Mid-Years 2008-2012
- Gross Domestic Product
- Table 51: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2008-2012
- Inflation
- Table 52: Forecast UK Rate of Inflation (%), 2008-2012
- Unemployment
- Table 53: Forecast Actual Number of Unemployed Persons in The UK (Million), 2008-2012
- Forecasts 2008 to 2012
- Table 54: Forecast Number of Passengers Uplifted by UK Airlines on Scheduled
- and Non-Scheduled Services (Million), 2008-2012
- Market Growth
- Figure 1: Forecast Growth in The Number of Passengers Uplifted by UK Airlines on
- Scheduled and Non-Scheduled Services (Million), 2003-2012
- Future Trends
- Long-Term Forecasts for Air Passenger Growth
- Oil Price Surge Threatens Airlines
- Open Skies Agreement X Phase 2
10. Company Profiles
- British Airways Plc
- British Midland Airways Ltd
- Easyjet Airline Company Ltd
- Flybe Group Ltd
- First Choice Airways Ltd
- Monarch Airlines Ltd
- Thomas Cook Airlines UK Ltd
- Thomsonfly Ltd
- Virgin Atlantic Airways Ltd
11. Further Sources
- Associations
- General Sources
- Government Sources
- Bisnode Sources
- Understanding Tgi Data
- Number, Profile, Penetration
- Social Grade
- Standard Region
- Key Note Research
- The Key Note Range of Reports