US Low-Cost Airline Revenue on Top
08 11월 2013 - 6:27AM
Business Wire
Network Carriers Nearly Cut Unit Costs to
Low-Cost Carrier Level
This year, for the first time ever, U.S. low-cost airline unit
revenue on domestic routes exceeded that of network carriers.
Oliver Wyman’s annual Airline Economic Analysis report, released
today at the Raymond James Global Transportation Conference,
highlighted this and other important shifts taking place in the
global airline market.
While low cost carriers fly shorter routes, inherently
generating higher unit revenue, this unprecedented spike in
domestic revenue per available seat mile among U.S. low-cost
carriers is still evidence of a major change.
“With both network and low-cost carriers focused on generating
higher revenue, the result may be higher profitability in the short
term,” said Oliver Wyman Partner Bob Hazel. “However, this
environment could also facilitate the emergence of a new group of
lower fare airlines.”
Other highlights from Oliver Wyman’s 2013 report include:
- Asia strengthening its position as the
world’s largest airline market, surpassing Europe and the U.S. Just
a few years ago, the U.S. was still No. 1, Europe second, and Asia
third. The shift in the airline market shows why manufacturers are
focusing on Asia.
- A narrowed cost gap between U.S.
network airlines and low cost airlines during the past five years
from 34 percent to less than 4 percent. Even so, ultra-low-cost
airlines modelled after Europe’s Ryanair operate at costs that are
a step below even traditional low-cost carriers and are a growing
challenge to both network and low-cost carriers.
- Increasing pressure from ultra-low-cost
carriers. Some ultra-low-cost airlines unbundle their products to
the maximum extent and charge low base fares and high ancillary
fees. Added together, these low fares and high fees can equal the
higher fares and lower ancillary fees at traditional airlines. Is
this situation sustainable, or will traditional airlines find ways
to regain their historic revenue premium?
About the Airline Economic Analysis
Oliver Wyman’s Airline Economic Analysis report is in its fifth
generation. The 45-page report covers a range of industry analyses
including: CASM/RASM comparisons, stage-length-adjusted and
long-term trends, fuel prices, break-even load factors, ancillary
revenues, and fleet composition and global capacity growth by
region.
About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With
offices in 50+ cities across 25 countries, Oliver Wyman combines
deep industry knowledge with specialized expertise in strategy,
operations, risk management, and organization transformation. The
firm's 3,000 professionals help clients improve their operations
and risk profiles and accelerate their organizational performance
to seize the most attractive opportunities. Oliver Wyman is a
wholly owned subsidiary of Marsh & McLennan Companies
[NYSE:MMC]. For more information, visit www.oliverwyman.com. Follow
Oliver Wyman on Twitter @OliverWyman.
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Oliver WymanBirgit Andersen, + 1
214-758-1806birgit.andersen@oliverwyman.com
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