Four years after the publication of our first Transport survey,
what does our latest survey released in March 2013 tell us about
the aviation industry?
Of the transport industries reviewed, it appears that the
aviation sector has had the most successful year with 50 per cent
of respondents reporting an increase in turnover and only 16 per
cent reporting an appreciable reduction in 2012. These financial
results coupled with growth within the industry and a desire to
venture into new markets suggests that, of the transport sectors,
the aviation industry appears more robust in terms of recovering
from the global economic slowdown than its rail or shipping
The positive results in turnover appear to reflect an optimistic
outlook in the sector which reports the largest growth in workforce
– with 38 per cent of respondents stating that their
workforce had increased in the past year – the greatest
increase in the number of assets employed between 2010 and 2012
with 44 per cent reporting an increase and of the three industries,
aviation respondents were more likely to have ordered (or
contemplated ordering) new stock in 2012.
In addition to growth within the industry, of the three sectors
it was aviation respondents who were most eager to venture into new
market segments with 66 per cent (opposed to 58 per cent for
shipping and rail) answering in the affirmative to having sought to
change their position in terms of the market segments in which they
operate, range of products or services offered or geographical
focus. The respondents across all three transport sectors were most
interested in entering into new geographical markets suggesting a
trend that the industry is seeking to diversify from traditional
Although the statistics suggest that the aviation industry
appears relatively buoyant, the respondents noted that the two most
significant challenges to their business between 2010 and 2012 were
financial constraint (36 per cent) and increased operational
capability (35 per cent).
The limited availability of bank funding has been the main
financial constraint experienced by industry respondents. One
interesting theme which has arisen from our survey is the apparent
lack of financial diversification and an unwillingness to explore
alternative financing opportunities within the aviation sector.
Since we began our surveys in 2009, the three primary sources of
funding have generally remained consistent with equity, bank debt
and capital markets providing the primary sources of aviation
funding. Although offbalance sheet finance has seen marginal
increases in the past three years other sources of alternative
financing play a relatively minor role in the industry.
Additionally, only 38 per cent of aviation sector respondents
stated that they were looking for new sources of financing which
suggests that the traditional methods of funding are very much
entrenched. Nevertheless, of the new sources considered, the two
options aviation respondents seem most eager to explore are
structured finance (25 per cent) and long term leasing (24 per
Operational capacity has long been a concern for the industry
with a large number of respondents citing existing airport capacity
(41 per cent) and developing airport capacity in new or growing
markets (32 per cent) as the primary infrastructure concerns. It is
therefore no surprise that infrastructure investment has been
ranked as the single most helpful form of government support to the
aviation industry since we began our surveys in 2009. This year,
infrastructure investment attracted over twice as many votes as the
next most helpful form of support, which was deregulation,
highlighting the importance the industry places on increasing
infrastructure investment. The Transport survey, now in its fourth
year, continues to provide the transport industry with an
insightful indicator as to how the market has evolved and adapted
to new challenges and conditions. Aviation strategies appear to
have moved from a focus on retrenchment and disposals in 2009 to a
predominant focus on alliances and joints ventures in 2012. The
Transport survey will continue to track conditions, challenges and
trends hinting at where the market is heading and how it intends to
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