According to the fourth Norton Rose "The Way
Ahead" Transport survey - Where are you now?
A global survey of 1,000 plus respondents across aviation,
rail and shipping
83% of global aviation respondents deem government investment
in infrastructure "essential".
However, just 33% believe government support will be adequate
over the next five years.
Increased financial constraint is highlighted as one of the
most significant changes to aviation businesses between 2010 and
Of aviation respondents, 66% have sought to change their market
position or geographical focus since 2010.
25% intend to draw on structured finance for the first time,
24% on long term leasing, 17% on bond financing and 16% on private
London leads as the financial centre considered best able to
meet the aviation sector's financing needs (31%), followed by
New York (15%) and Singapore (8%).
Fuel cost is the sector's biggest concern - 64% regard more
efficient fuel consumption as the most important development focus
for the aviation sector.
Calls for additional and new airport capacity are intensifying
according to international legal practice Norton Rose's
"The Way Ahead" Transport survey - Where are you now?
Eighty-three per cent of respondents from the global aviation
sector believe that government investment in infrastructure is
"essential". Despite this, only a third of aviation
respondents believe that government support will be adequate over
the next five years.
The need for additional airport capacity at existing airports is
regarded as the most urgent infrastructure need by 41 per cent of
the aviation sector, followed by the development of new airport
capacity in new or growing markets, which is favoured by 32 per
cent of respondents.
While demand for government investment in infrastructure is
high, the survey suggests that the aviation sector has weathered
the years following the global financial crisis marginally better
than the rail and shipping sectors. A third (36 per cent)
highlighted increased financial constraint as one of the most
significant changes to their business between 2010 and 2012,
against 40 per cent of rail respondents and 42 per cent of shipping
This may be due to the fact that aviation businesses are more
likely to have sought to change their market position in response
to a more challenging business environment than rail or shipping.
Two-thirds of aviation respondents have sought to change their
market position or geographical focus since 2010, compared to 58
per cent of both rail and shipping respondents. The new strategies
adopted by the aviation sector include entering new market segments
(52 per cent), entering new geographical markets (45 per cent) and
increasing the range of products and services they offer (45 per
The aviation sector anticipates that the majority of its funding
will come from traditional sources such as shareholders, bank debt
and the capital markets over the next two years. Despite this,
there is evidence that the sector is exploring alternative forms of
finance. A quarter of respondents are using, or intend to use,
structured finance for the first time, 24 per cent long-term
leasing, 17 per cent bond financing and 16 per cent private
The survey also suggests that the aviation sector is looking to
a wider range of financial centres to meet its funding
requirements. While 31 per cent believe that London is the
financial centre best able to meet their funding needs, followed by
New York (15 per cent) and Singapore (8 per cent), the aviation
sector is also looking to markets other than the traditional
financial centres such as Canada, Australia, Switzerland and the
Neil Poland, Global Head of Aviation, Norton Rose, comments:
"Despite a difficult few years, the aviation sector now
appears more robust in terms of recovering from the global economic
slowdown, and is looking to grow into new markets."
"While the aviation sector has changed its market and
geographical focus, traditional forms of financing remain
entrenched although there is interest in alternative forms of
finance including structured finance and longer term
"Overall, the aviation industry appears relatively buoyant
but the cost of fuel is a major concern and demand for government
investment in infrastructure is growing. Additional and new
capacity in both developed and new markets is felt to be needed
urgently in order to support future growth."
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