Scheduled Airlines - UK - May 2007

SUMMARY

Abstract

Low cost carriers have revolutionized the way in which we travel, and flying has moved from being a luxury to a commodity. As a result, consumers are a fickle bunch who will choose price over service time and time again.In response scheduled airlines have tried to compete by offering their own low-cost models, and have had varying degrees of success.

Once upon a time, business travelers would expect nothing less than fully serviced air travel, regardless of the length of journey, but squeezing of budgets means that many now choose low cost carriers over the traditional scheduled airline.

The question remains, is the service offered by a traditional scheduled carrier relevant to today

TABLE OF CONTENTS

Table of Contents

• Issues in the MarketMain issues
• Definitions
• Abbreviations
• Market in Brief
• Profit on a knife edge
• Taxation? It's as easy as APD
• Fuel efficiencies
• Un-green accusations make industry see red
• The Atlantic gets narrower and cheaper
• Groundhog day
• Loyalty schemes fail to engage the leisure traveller
• Internal Market Environment
• Key points
• Let's get out of here!
  • Figure 1: Domestic and overseas holidays volume, 2002-07
• Travel pie growing in size
  • Figure 2: Domestic and overseas holiday expenditure, 2002-07
  • Figure 3: Average spend per trip, 2002-07
• Short-haul goes regional
  • Figure 4: Passenger movement (scheduled and non-scheduled) at UK airports, 2002-06
  • Figure 5: Aircraft movement at UK airports, 2002-06
• Who do you think you are?
• Broader Market Environment
• Key points
• Cash-rich, time-poor
  • Figure 6: Trends in personal disposable income and consumer expenditure, 2002-12
• ABsolutely Fabulous
  • Figure 7: Forecast adult population trends, by socio-economic group, 2002-12
• The circle of life
  • Figure 8: Forecast adult population trends, by lifestage, 2002-12
• Internet penetration
  • Figure 9: Internet penetration, by gender, socio-economic group and age, 2002-06
• Buy bye
  • Figure 10: Online product purchasing, by category, January 2006-February 2007
• Green skies
• Consumer spending priorities
  • Figure 11: UK spending priorities, January 2007
• Oil prices fuelling price increases
  • Figure 12: Crude oil prices, 2002-06
• Exchange rates
  • Figure 13: Annual average exchange rates for Sterling against the euro and US Dollar, 2002-06
• Open Skies and cheaper fares
• Low-cost model fit for purpose
• APD
• Competitive Context
• Key points
• Scheduled versus non-scheduled
  • Figure 14: Passenger traffic on UK owned airlines, 2002-06
• Strengths and Weaknesses in the Market
• Strengths
• Weaknesses
• Market Size and Forecast
• Key points
• Back to black
  • Figure 15: Performance of all UK airlines, 2000-04
• Come fly with me, and me, and me
  • Figure 16: Passenger capacity and traffic on UK scheduled airlines, 2002-12
• Reach for the skies
• Factors used in the forecast
• Segment Performance
• Key points:
• Scheduled travel, your flexible friend
  • Figure 17: Air (scheduled) main method of travel for last/last but one holiday, 2002-06
• Regionalisation of airport usage
  • Figure 18: Airports used in the last 12 months, 2002-06
• The price is right
  • Figure 19: Most important factor when choosing which airline to fly with on holiday, 2002-06
• Time is money
  • Figure 20: Most important factor when choosing which airline to fly with on business, 2002-06
• Market Share
• Key Points:
• Number of aircraft
  • Figure 21: Number of active aircraft
• Airline capacity
  • Figure 22: UK scheduled airline capacity statistics, 2002 and 2006
• Load capacity
  • Figure 23: UK scheduled load capacity (seat km used as part of seat km available), 2002 and 2006
• Companies and Products
• Traditional carriers versus low cost
  • Figure 24: Comparison of traditional and low cost scheduled airlines, 2007
• Alliances
  • Figure 25: Airline alliances, May 2007
• Key players
• British Airways Plc
  • Figure 26: Financial performance of British Airways Plc, 2001-06
  • Figure 27: British Airways Plc, key operating statistics, 2001-06
• British Midland Airways Limited
  • Figure 28: Financial performance of bmi (including bmibaby), 2002-06
  • Figure 29: BMI, key operating statistics, 2002-06
• Virgin Atlantic Airways
  • Figure 30: Financial performance of Virgin Atlantic, 2002-06
  • Figure 31: Virgin Atlantic, key operating statistics, 2002-06
• Ryanair
  • Figure 32: Ryanair key operating statistics, 2002-06
• Iberia Airlines
  • Figure 33: Iberia performance, 2003-06
• Air France
  • Figure 34: Air France performance, 2003-05
• KLM
  • Figure 35: KLM performance, 2003-05
• Lufthansa
  • Figure 36: Lufthansa performance, 2003-06
• Alitalia
  • Figure 37: Alitalia performance, 2003-05
• Aer Lingus
• Figure 38: Aer Lingus performance, 2003-05
• SAS -- Scandinavian Airline Businesses
  • Figure 39: Aer Lingus performance, 2003-05
• United Airlines
• American Airlines
• Emirates
  • Figure 40: Emirates performance, 2003-06
• Qantas
• Singapore
• Air Canada
• Distribution
• Key points
  • Figure 50: Flying habits of scheduled airline passengers, March 2007
• The Consumer -- Use of Scheduled Airlines
• Key points
• BA still carrying the flag for the UK
• Chameleonic chartered airlines
  • Figure 51: Scheduled flying experience, March 2007
• Who flies scheduled?
• High fashion
• Southern Comfort
• The flight is right
• Altruistic aviation?
  • Figure 52: Scheduled flying experience, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel's Special Groups, working status, household income, tenure, region, ACORN category, media usage, TV reception, supermarket usage, household size, car usage, detailed lifestage groups, age/socio-economic groups and terminal education age, March 2007
• The scheduled low-cost relationship
  • Figure 53: Scheduled passengers' low-cost experience, by carriers used, March 2007
• Scheduled Airline Targeting Opportunities
• Key points
• Target groups
• Seasoned Flyers (10% or 5 million adults)
• Price Prioritised (21% or 10.5 million adults)
• Run-a-wayers (21% or 10.5 million adults)
• Moderates (17% or 8.5 million adults)
• Grounded (31% or 15.5 million adults)
• Targeting demographics
• Scheduled airline targeting opportunities -- detailed demographics
  • Figure 59: Scheduled airline target groups, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel's Special Groups, working status, household income, tenure, region, ACORN category, media usage, TV reception, supermarket usage and detailed lifestage groups, March 2007
• Carriers used
  • Figure 60: Target groups, by carriers used, March 2007
• Booking methods
  • Figure 61: Target groups, by booking channels, March 2007
• Low-cost usage
  • Figure 62: Target groups, by low-cost carrier usage, March 2007