Industry Analysis & Industry Trends
The industry is pulling together after massive losses during the global downturn. Revenue for the Global Airlines industry is estimated to increase at an annualized rate of 2.9% to $636.0 billion over the five years to 2012. Industry revenue is expected to experience more stable growth during 2012 compared with the past five years, with revenue estimated to grow 5.0%.
Conditions have greatly improved since 2009, which was one of the worst years for the airline industry. The easing of average airfares and declining passenger numbers resulted in declining revenue. The total number of passengers flying in 2009 contracted 1.1%, with a stronger decline in international flights compared with domestic... read more
The Global Airlines industry is sensitive to economic activity, per capita disposable income, the price of crude oil and tourism levels. When worldwide economic conditions are positive, individuals will tend to increase spending on leisure activities, such as vacations and visiting relatives and friends. Strong economic conditions also coincide with high business sentiment, which increases demand for business-related air travel. The price of crude oil generally has a negative effect on the industry because competition limits the ability of airlines to pass the full increase in fuel costs to consumers. Once airlines can no longer absorb high fuel prices, they raise ticket prices. However, higher prices slow demand for air travel and thus hinder industry revenue... read more