International Air Transport Association

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May 2010:

ä Industry profits
ä Business confidence
ä
Ash plume impact
ä Competition & fares
ä Airport benchmarking
ä Video & data

 

 

 

Welcome to the latest edition of IATA’s quarterly eAnalyst.

 

The eAnalyst is designed to provide a concise and insightful guide to the current key issues in the global airline industry.

 

In this issue we discuss how the prospects for airline financial performance this year have improved significantly, but not in all regions. Our survey of airline business confidence in April confirmed the more buoyant outlook of airline CFOs, but supported our view of sharp geographical differences, with Europeans the least positive. This quarter’s research topic sets out IATA’s economic analysis of Iceland’s volcanic ash plume in April.

 

Invited essays this quarter include a piece by Professor Brueckner and colleagues showing that, because of structural changes in the past decade, further consolidation of network airlines within the US domestic market should not cause undue concern for competition authorities. Rising infrastructure charges are another current challenge and a second essay looks at airport benchmarking, an important tool to spur efficiency and pricing improvements where the market or regulator is ineffective.

 

I hope you find it to be an interesting and informative read.

 

Brian Pearce
IATA Chief Economist

   
 

 

 

INDUSTRY PERFORMANCE AND OUTLOOK

 

ä Recovery picks up pace but is still 2-speed

 

Air transport markets and airline cash flows were strengthening through the first quarter of this year and, in most regions, are expected to make further gains during the rest of this year. However… [more]

ä Airline expectations continue to improve

 

IATA’s April 2010 survey showed a further improvement in sentiment across all indicators of airline business confidence. A majority of respondents indicated that profitability had improved in the first quarter of 2010 and… [more]

RESEARCH TOPIC

 

ä The impact of Eyjafjallajokull’s volcanic ash plume

 

After very strong growth in travel and cargo demand in the first quarter, April’s markets were hit by the European airspace closures resulting from the volcanic ash plume originating from Iceland. For a period of 7 days up to 29% of global passenger capacity was grounded, costing the industry… [more]

KEY POLICY ISSUE by  Prof. Jan K. Brueckner, Dr Darin Lee and Ethan Singer

 

ä Network vs. LCC competition and airfares: New US empirical evidence

 

When considering airline mergers, both the US Department of Justice and European Commission have relied on published studies from the 1990s which suggest there can be adverse competitive effects from reducing the number of network airlines on a given route. This note describes a new comprehensive research study that now shows… [more]

   
 

   

ANALYST VIEWPOINT by Michael Tretheway and Ian Kincaid

 

ä Understanding airport benchmarking

 

Rising infrastructure charges are another current challenge and this essay looks at airport benchmarking, an important tool to spur efficiency and pricing improvements where the market or regulator is ineffective. Michael Tretheway and Ian Kincaid take the reader through some of the pitfalls. The main issue is… [more]

DATA UPDATE

 

ä Enhanced economic reports: video and chart data

 

Looking for further analysis and data relating to IATA’s regular economic briefings? Enhanced versions are now available for purchase. Each report contains the IATA data series (in Excel format) for the charts presented in each report and a video commentary from IATA’s Chief Economist. [more]

 

If you wish to have more insight on key market trends, or require assistance with strategy development and implementation, IATA can help. For more info, contact us at +1.514.390.6745 or bis@iata.org

 

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While every effort has been made to ensure the quality and accuracy of this newsletter, IATA shall not be held responsible for any loss or damage caused by errors, omissions, misprints or misinterpretations of the contents herein.

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