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Airlines - UK - August 2016

“2015 was a fantastic year for trips abroad, both in the holiday and business markets. Growth continued in the first half of 2016, however, the UK’s leave vote in the EU referendum and the resultant drop in value of the pound has cast doubt on performance in the second part of the year.”
– Fergal McGivney, Travel and Technology Analyst

This report discusses the following key topics:

  • Perceptions of budget airlines has improved over the last two years
  • Usage of premium economy on the rise
  • Younger consumers and parents most willing to pay for onboard Wi-Fi

This Report analyses market trends, leading airline brands and innovations, as well as featuring detailed consumer analysis, including: types of flight taken, types of airlines flown on, classes flown, booking procedures, flight behaviours, and attitudes towards flights.

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Table of contents

  1. Overview

    • What you need to know
      • Scope of the report
      • Executive Summary

          • The market
              • Figure 1: Volume forecast of total passengers uplifted at UK airports, 2011-21
              • Figure 2: Volume forecast of domestic passengers uplifted at UK airports, 2011-21
              • Figure 3: Volume forecast of international passengers uplifted at UK airports, 2011-21
            • The consumer
              • Air travel is growing thanks to strong holiday and business markets
                • Figure 4: Flight types taken, July 2015 to June 2016
              • A rise in consumers flying premium economy
                • Figure 5: Classes flown in the last 12 months, July 2015 to June 2016
              • A quarter of consumers willing to pay for Wi-Fi on long-haul flights
                • Figure 6: Flight behaviours (I), June 2016
                • Figure 7: Attitudes towards flights II (2), June 2016
              • What we think
              • Issues and Insights

                • Perceptions of budget airlines has improved over the last two years
                  • The facts
                    • The implications
                      • Usage of premium economy on the rise
                        • The facts
                          • The implications
                            • Younger consumers and parents most willing to pay for onboard Wi-Fi
                              • The facts
                                • The implications
                                • The Market – What You Need To Know

                                  • Strong growth in 2015 and H1 2016, but further growth may be curbed by Brexit
                                    • Brexit result; consumer caution and possible regulation changes
                                      • A weak pound is making holidays more expensive
                                      • Market Size and Forecast

                                        • Strong growth in 2016 but challenges remain
                                          • Growth forecast but at a slightly slower rate
                                            • Figure 8: Passengers uplifted at UK airports, 2011-21
                                            • Figure 9: Volume forecast of total passengers uplifted at UK airports, 2011-21
                                            • Figure 10: Volume forecast of domestic passengers uplifted at UK airports, 2011-21
                                            • Figure 11: Volume forecast of international passengers uplifted at UK airports, 2011-21
                                        • Market Drivers

                                          • Brexit result; consumer caution and possible regulation changes
                                            • A weak pound is making holidays more expensive
                                              • Figure 12: Pound versus euro, 10 August 2015 to 10 August 2016
                                              • Figure 13: Pound versus US Dollar, 10 August 2015 to 10 August 2016
                                            • Weak Pound could boost trips to Eastern Europe
                                              • Figure 14: Post Office City Cost Barometer 2016
                                            • Low oil price leads to low airfares
                                              • Figure 15: Europe Brent Spot Price Free On Board (FOB), Dollars per Barrel, August 2011 to August 2016
                                            • Rail remains and expensive option for domestic holidaymakers
                                              • Figure 16: UK rail fares index, 2004-16
                                              • Figure 17: UK rail fares index, 2004-16
                                            • North African and Turkish markets suffering
                                              • Ryanair to pivot growth from the UK could potentially increase fares
                                                • Decision delayed for expanding Heathrow
                                                • Segment Performance

                                                  • Air travel increases market share
                                                    • Figure 18: Overseas trips taken by UK resident, by mode of transport, 2014 2015
                                                    • Figure 19: Overseas trips taken by UK resident, by mode of transport, Q1 2014 and Q1 2015
                                                  • Independent bookings grow while packages fall
                                                    • Figure 20: Independent versus non-independent air travel bookings, 2014-15
                                                  • Scheduled flights increase while charter decrease
                                                    • Figure 21: Passengers uplifted at UK airports, scheduled versus non-scheduled, 2008-16
                                                  • Italy overtakes France as thrid top destination
                                                    • Figure 22: Top ten countries by air visits, 2014-15
                                                • Key Players – What You Need to Know

                                                  • Virgin Atlantic viewed as a stylish and trendy brand
                                                    • British Airways is the UK’s favourite airline brand
                                                      • Thomson Airways is the most popular charter airline brand
                                                        • Thomas Cook’s association with ATOL protection instils trust
                                                          • easyJet is the UK’s most popular budget airline
                                                            • Broadly negative views of Ryanair
                                                            • Market Share

                                                              • Ryanair enjoys double digit growth
                                                                • Figure 23: Top 10 UK-based airlines, by passengers uplifted globally, 2010-15
                                                            • Brand Research

                                                                • Brands covered
                                                                  • Virgin Atlantic
                                                                    • British Airways
                                                                      • Thomson Airways
                                                                        • Thomas Cook Airlines
                                                                          • easyJet
                                                                            • Ryanair
                                                                              • Brand map
                                                                                • Figure 24: Attitudes towards and usage of selected brands, June 2016
                                                                              • Key brand metrics
                                                                                • Figure 25: Key metrics for selected brands, June 2016
                                                                              • Brand attitudes: British Airways and Virgin offer consistently high quality
                                                                                • Figure 26: Attitudes, by brand, June 2016
                                                                              • Brand personality: Ryanair viewed as unappealing
                                                                                • Figure 27: Brand personality – Macro image, June 2016
                                                                              • Although perceived as stylish and trendy, Virgin Atlantic considered to be overpriced
                                                                                • Figure 28: Brand personality – Micro image, June 2016
                                                                              • Brand analysis
                                                                                • Virgin Atlantic most likely to be rated an excellent experience
                                                                                  • Figure 29: User profile of Virgin Atlantic, June 2016
                                                                                • British Airways is the UK’s favourite airline brand but also viewed as overpriced
                                                                                  • Figure 30: User profile of British Airways, June 2016
                                                                                • Thomson Airways is the most popular charter airline brand
                                                                                  • Figure 31: User profile of Thomson Airways, June 2016
                                                                                • Thomas Cook Airlines association with ATOL protection instils trust
                                                                                  • Figure 32: User profile of Thomas Cook Airlines, June 2016
                                                                                • easyJet is the UK’s most popular budget airline
                                                                                  • Figure 33: User profile of easyJet, June 2016
                                                                                • Broadly negative perception of Ryanair
                                                                                  • Figure 34: User profile of Ryanair, June 2016
                                                                              • Launch Activity and Innovation

                                                                                • Amadeus to tackle customer abandonment in the flight booking process
                                                                                  • Etihad Airways rolls out its new iPhone app
                                                                                    • Real time onboard seat auctions to be made possible
                                                                                      • Ryanair plan to launch new corporate jets
                                                                                        • Ryanair set to roll out new digital services
                                                                                          • Ryanair reveals plans for budget accommodation service
                                                                                            • Thomas Cook Airlines launch new routes for 2017
                                                                                              • Thomas Cook introduces new routes for summer 2017
                                                                                              • The Consumer – What You Need to Know

                                                                                                • The proportion of consumers flying grows over the past year
                                                                                                  • Use of budget carriers is more common
                                                                                                    • More consumers are purchasing premium economy seats
                                                                                                      • Charter flights most likely to be booked in-store
                                                                                                        • Most consumers are happy to book on a smartphone
                                                                                                          • A quarter of consumers willing to pay for Wi-Fi on long-haul flights
                                                                                                            • Budget long haul appeals to younger frequent flyers
                                                                                                            • Flight Types Taken

                                                                                                              • Air travel is growing as consumer return overseas
                                                                                                                  • Figure 35: Flight types taken, July 2015 to June 2016
                                                                                                                  • Figure 36: Last flight type taken, June 2015
                                                                                                                • Easing the stresses of business travellers
                                                                                                                  • Frequent flyers are more likely to live in London or Scotland
                                                                                                                    • Figure 37: Number of flights taken in the last 12 months, June 2016
                                                                                                                    • Figure 38: Number of flights taken in the last 12 months, by flight types taken in the last 12 months, June 2016
                                                                                                                • Airline Types Flown

                                                                                                                  • A greater proportion of people are flyer using charter airlines
                                                                                                                      • Figure 39: Airline types flown in the last 12 months, June 2016
                                                                                                                    • 16-24s are big users of full-service airlines
                                                                                                                      • Figure 40: Airline types flown in the last 12 months, by age, June 2016
                                                                                                                    • Perceptions of budget airlines are improving
                                                                                                                      • Figure 41: Perceptions of service improvements on budget airlines over the past few years, June 2016
                                                                                                                    • Parents also feel budget airlines have improved
                                                                                                                      • Figure 42: Willingness to pay for a more comfortable flight, June 2016
                                                                                                                  • Classes Flown

                                                                                                                    • Premium economy usage increases
                                                                                                                      • Figure 43: Classes flown in the last 12 months, July 2015 to June 2016
                                                                                                                    • Premium economy more popular with younger consumers…
                                                                                                                      • Figure 44: Attitudes towards paying for premium economy, short-haul versus long-haul, June 2016
                                                                                                                    • …while economy is more popular with older consumers
                                                                                                                      • Figure 45: Classes flown in the past 12 months, by age, June 2016
                                                                                                                    • Families are key target groups for premium economy
                                                                                                                    • Flight Booking

                                                                                                                      • Around a quarter book flights offline
                                                                                                                        • Figure 46: How last flight was booked, June 2016
                                                                                                                      • Charter flights most likely to be booked in-store
                                                                                                                        • Budget carriers are far more likely to be booked online than full-service
                                                                                                                          • Seniors are the mostly likely group to book offline
                                                                                                                            • Figure 47: How respondents would describe their financial situation, by age, June 2016
                                                                                                                            • Figure 48: Consumer’s financial outlook for the coming year, by age, June 2016
                                                                                                                            • Figure 49: What extra money is spend upon, by age, June 2016
                                                                                                                            • Figure 50: Plans to book a holiday in the next three months, by age, June 2016
                                                                                                                        • Device Used for Online Booking

                                                                                                                          • Reaching consumers while out and about
                                                                                                                            • Most consumers are happy to book on a smartphone
                                                                                                                              • Figure 51: Attitudes towards using a smartphone to book a flight, June 2016
                                                                                                                              • Figure 52: Attitudes towards using a smartphone to book a flight, by age, June 2016
                                                                                                                            • Smart TV bookings are one to watch for the future
                                                                                                                                • Figure 53: How last flight was booked online, June 2016
                                                                                                                            • Flight Behaviours

                                                                                                                              • Half of flyers exhibit savvy shopping behaviours
                                                                                                                                  • Figure 54: Savvy flyers*, June 2016
                                                                                                                                • Comparing different flight combinations to get the cheapest deal
                                                                                                                                  • A quarter of consumers willing to pay for Wi-Fi on long-haul flights
                                                                                                                                    • A sizable proportion think that loyalty programmes are confusing
                                                                                                                                      • Figure 55: Attitudes towards airline loyalty programme, June 2016
                                                                                                                                      • Figure 56: Flight behaviours (I), June 2016
                                                                                                                                    • Finding the cheapest flight
                                                                                                                                        • Figure 57: Flight behaviours (II), June 2016
                                                                                                                                    • Attitudes towards Flights I

                                                                                                                                      • Opportunity for medium-haul long weekends for the right price
                                                                                                                                        • Multicentre trips popular with young people and Londoners
                                                                                                                                          • The majority of travellers open to stopovers to save money
                                                                                                                                            • Figure 58: Attitudes towards flights I, June 2016
                                                                                                                                        • Attitudes towards Flights II

                                                                                                                                          • Consumers want the option of booking packages on airline websites
                                                                                                                                            • Business-to-customer interaction through live chat messaging
                                                                                                                                                • Figure 59: Attitudes towards flights II (1), June 2016
                                                                                                                                              • Courting older demographics
                                                                                                                                                • Figure 60: Willingness to pay for extra services, by age, June 2016
                                                                                                                                              • Budget long haul appeals to younger frequent flyers
                                                                                                                                                  • Figure 61: Attitudes towards flights II (2), June 2016
                                                                                                                                              • Mobile Ownership – Flight Attitudes and Behaviours

                                                                                                                                                • CHAID Analysis

                                                                                                                                                    • More parents think premium economy is worth it, while young frequent flyers are open to long-haul flights on budget carriers
                                                                                                                                                        • Figure 62: Target groups based on attitudes toward airlines – CHAID – Tree output, June 2016
                                                                                                                                                        • Figure 63: Target groups based on attitudes toward airlines – CHAID – Table output, June 2016
                                                                                                                                                    • Appendix – Data Sources, Abbreviations, and Supporting Information

                                                                                                                                                        • Abbreviations
                                                                                                                                                          • Definitions
                                                                                                                                                            • Forecast methodology
                                                                                                                                                                • Figure 64: Best- and worst-case forecast for total UK passenger uplift, 2016-21
                                                                                                                                                                • Figure 65: Best- and worst-case forecast for domestic UK passenger uplift, 2016-21
                                                                                                                                                                • Figure 66: Best- and worst-case forecast for international UK passenger uplift, 2016-21

                                                                                                                                                            Companies Covered

                                                                                                                                                            To learn more about the companies covered in this report please contact us.

                                                                                                                                                            Airlines - UK - August 2016

                                                                                                                                                            £1,995.00 (Excl.Tax)