Long-haul Airlines - UK - June 2009

Abstract

Until the second half of 2008 long-haul airlines were enjoying a boom period, spurred on by the affluence of key consumers and trends in favour of exploring further, experiencing more and tasting the exotic to an ever greater degree. The impact of the recession has, however, had the predictable effect. Passenger numbers are down and a raft of long-haul airlines have reported poor recent results. Capacity is under pressure, with many operators choosing to park aircraft in the hope of a recovery to come.

There are, however, factors working in long-haul' s favour. The euro vs pound exchange rate, for example, has thrown assumptions of ‘cheap' European trips into stark relief, and emphasised the value-for-money that can be achieved through flying further afield. The fall in oil prices from 2008' s high had eased pressures, with fuel surcharges removed/reduced in most cases. However, ranged against these are some troubling clouds on the horizon. Air Passenger duty will rise in November 2009 and November 2010, oil has (recently) begun to rise in price again and swine flu has been declared a global pandemic.

This report investigates these issues and more, providing an overview of the market, examining core trends in supply, key strengths and weaknesses, consumer trends and the developments that are impacting on the marketplace.

Key issues:

• How are long-haul airlines performing in the recession? How is long-haul air travel doing in comparison to short-haul?
• What are the long-term trends in long-haul air travel, and will these tougher economic times change consumer behaviour?
• Who are the key long-haul airline users? What do consumer demographics indicate for the future of long-haul airlines?
• What will the effects be of the impending change to Advanced Passenger Duty (APD)? And how is the future of oil going to affect long-haul airlines? What are the other factors that will have particular impact?
• How does the holiday market affect long-haul airlines? And what of premium travel (first and business class)?
• Will (can?) low-cost long-haul work?
• How do people book long-haul flights? Is this changing?
• What do people think makes for a good long-haul airline? Which companies provide this?
• Are environmental concerns a factor to long-haul airlines? And are consumers worried about the ‘green' impact of flying long-haul?