2021
9
UK Airlines Market Report 2021
2021-09-04T04:20:32+01:00
OX1049491
2195
142134
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Report
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“The VFR and holiday segments are expected to recover quickest from COVID-19, while the business travel market will take longer to recover to pre-pandemic levels and may never reach its…

UK Airlines Market Report 2021

£ 2,195 (Excl.Tax)

Description

The UK Airlines report identifies consumer attitudes towards booking, amenities and services, the environment, and purchase drivers in the UK. This market report covers the market size, market forecast, market segmentation and industry trends for the Airlines market in the UK. 

Current Market Landscape 

Holiday booking intentions reached their highest levels since the pandemic hit in July 2021, offering potential to secure more last-minute bookings for summer and winter (sun) holiday destinations. The latter is likely to appeal to those who missed their usual overseas summer holiday this year, thanks to continued COVID-19 restrictions on international travel.

  • 31% of UK adults planned to book a holiday in the three months following July 2021, up from 22% in the previous month.
  • Value sales are estimated to slip back by 5% to £1.63 billion during 2021.

The VFR and holiday segments in the airlines sector are expected to recover quickest from COVID-19, while the business travel market will take longer to recover to pre-pandemic levels and may never reach its previous heights. Measures and innovations in the airlines industry that enhance the feelings of safety, increasing consumer confidence in travelling while making the journey as efficient and enjoyable as possible will be essential to speed up the market recovery.

Future Market Trends in Airlines 

Although the collapse in demand in the aviation sector resulted in some failures in the airlines market, there were fewer than expected. In fact, the withdrawal of capacity from the market has presented opportunities for those brands looking to expand or enter the market. The competition, in an already a highly price-driven market, will be fierce when demand starts to recover.

There is a willingness to pay for added benefits, particularly for flexible cancellation policies, spaced out seating on board and priority boarding. Another effective path for airlines to increase revenues would be to tempt holidaymakers to add-on accommodation, the element that consumers think is most worth spending extra money on. This report also covers the current market segmentation for international travel, between air, sea and tunnel options, as well as travel purposes such as holidays and business trips.

Read on to discover more details or take a look at all of our UK Holidays and Travel market research.

Quickly understand

  • The impact of COVID-19 on the UK airlines market.
  • Trends in holiday booking intentions and bookings.
  • Purchase drivers when choosing an airline.
  • Interest in amenities and services.
  • Behaviour regarding the environment and flying.
  • Consumers’ perceptions of seven key players in the airlines market.
  • Company activity among major airlines during the pandemic.

Covered in this report

Brands: JetBlue, Flybe, Stobart Air, British Airways, Ryanair, EasyJet, Jet2, TUI, Virgin Atlantic, Wizz Air, BA CityFlyer, Loganair, Lufthansa German Airlines, American Airlines, Korean Air, United Airlines, Emirates Airline, Air Transat, Qatar Airways.

Expert analysis from a specialist in the field

This report, written by Marloes de Vries, a leading analyst in the Travel sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The VFR and holiday segments are expected to recover quickest from COVID-19, while the business travel market will take longer to recover to pre-pandemic levels and may never reach its previous heights. Measures and innovations that enhance feelings of safety, increase confidence in travelling and make the journey as efficient and enjoyable as possible will be essential to speed up recovery.
Marloes de Vries
Associate Director – Travel

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • COVID-19 presented biggest the challenge in history for the aviation industry
      • Figure 1: Short-, medium- and long-term impact of COVID-19 on the UK airlines market, 2020-25
    • International and domestic passenger volumes will remain well below pre-COVID-19 levels in 2021
      • Figure 2: COVID-19 scenario forecasts for the volume of International passenger numbers uplifted at UK airports, 2016-2026
      • Figure 3: COVID-19 scenario forecasts for the volume of domestic passenger numbers uplifted at UK airports, 2016-2026
    • Consumers’ confidence in their financial situation remains high
    • Oil price bounced back to pre-COVID-19 levels
    • Consultation to review Air Passenger Duty started
    • Efforts increase to decarbonise the aviation industry
    • The competition will be fierce when demand starts to recover
    • Key focus on offering the best value for money
    • In July 2021 holiday booking intentions reached highest level since pandemic hit
      • Figure 4: Actual bookings and plans to book a holiday in the next three months, 2019-21
    • Participation in holiday flights and VFR set to recover quickest
      • Figure 5: Participation and future intention to take flights, by purpose, 2021
    • Long-haul destinations continue to be on Brits’ wish list
      • Figure 6: Destinations visited by plane vs intention to visit, 2021
    • Demand for air travel mostly impacted by COVID-19 uncertainty
      • Figure 7: Reasons for taking fewer flights in the next three years compared to prior to COVID-19, 2021
    • Nearly 7 in 10 think their business travel behaviour will bounce back to pre-pandemic levels
    • Purchase decisions for plane tickets remain highly price-driven
    • Environment plays a more important role when choosing domestic flights
      • Figure 8: Factors influencing choice of airline, by plans to visit destinations by plane in the next three years, 2021
    • COVID-19 measures to enhance feelings of safety remain important
      • Figure 9: Attitudes towards the impact of COVID-19 on flying, 2021
    • Highest interest in flexible cancellation options and spaced out seating on board
      • Figure 10: Willingness to pay for amenities and services, 2021
  3. Issues and Insights

    • Increased focus on lowering costs while improving the customer experience
    • Showcasing sustainable practices and offering consumers more control will become increasingly important
  4. The Market – Key Takeaways

    • International and domestic passenger volumes will remain well below pre-COVID-19 levels in 2021
    • Consumers’ confidence in their financial situation remains high
    • Oil price bounced back to pre-COVID-19 levels
    • Consultation to review Air Passenger Duty
  5. Market Size and Performance

    • COVID-19 presented biggest the challenge in history for the aviation industry
      • Figure 11: Short-, medium- and long-term impact of COVID-19 on the UK airlines market, 2020-25
    • Prior to COVID-19, growth came predominantly from international traffic
      • Figure 12: Passenger numbers uplifted at UK airports, 2016-21
    • International traffic volume down by 76% in 2020, domestic traffic by 73%
    • International and domestic passenger volumes will remain well below pre-COVID-19 levels in 2021
  6. Market Forecast

    • Leisure and VFR travel expected to lead the recovery
      • Figure 13: International passenger numbers uplifted at UK airports, 2016-26
    • Domestic passenger volume will recover at a faster pace
      • Figure 14: Domestic passenger numbers uplifted from UK airports, 2016-26
    • Market drivers and assumptions
      • Figure 15: Key drivers affecting Mintel’s market forecast, 2015-25
    • Forecast methodology
  7. COVID-19 Scenario Performance

    • Mintel’s approach to predicting the impact of COVID-19
    • Fundamental differences in how COVID-19 is affecting consumer markets
    • Extended COVID disruption will be disastrous for international travel
    • International traffic volume could recover in 2024 in the rapid COVID-19 scenario
      • Figure 16: COVID-19 scenario forecasts for the volume of International passenger numbers uplifted at UK airports, 2016-2026
    • Domestic traffic could recover in 2023 in the rapid COVID scenario
      • Figure 17: COVID-19 scenario forecasts for the volume of domestic passenger numbers uplifted at UK airports, 2016-2026
    • COVID-19 market disruption: risks and outcomes
      • Figure 18: Summary of Mintel scenario expectations and the impact on the UK airlines market, 2021
  8. Market Segmentation – Overseas Flights Taken By UK Residents

    • Overseas flights outperformed the overall outbound market in 2019
      • Figure 19: Overseas trips taken by UK residents, by mode of transport, 2015-19*
    • Prior to COVID-19, growth was mainly driven by increased demand for holidays and VFR
      • Figure 20: Overseas trips taken by air by UK residents, by purpose, 2015-19*
    • Greece entered the top-5 most visited overseas destinations by air by UK residents
      • Figure 21: Top 20 overseas destinations by volume of trips taken by air by UK residents, 2015-19*
  9. Market Drivers

    • England presses ahead with final stage on roadmap …
    • … but international travel restrictions remain
    • Consumer confidence in their financial situation remains high …
    • … but end of furlough is approaching
      • Figure 22: The Financial Confidence Index, 2015- 2021
    • Oil price bounced back to pre-COVID-19 levels
      • Figure 23: Europe Brent Spot price, yearly averages 2010-22
    • Consultation to review Air Passenger Duty
    • Efforts increase to decarbonise the aviation industry
  10. Regulatory and Legislative Changes

    • UK moved from laws to guidance on 19 July 2021
    • Fully vaccinated travelling from amber countries exempt from self-isolation measures
      • Figure 24: Traffic light system for international travel, 2021
    • More destinations added to the green list in August traffic light list review
    • As of 19 July, England lifted the legal requirement to wear face masks
      • Figure 25: Attitudes towards wearing face masks, 2021
    • Consultation on suggested changes to ATOL scheme
  11. Companies and Brands – Key Takeaways

    • The competition will be fierce when demand starts to recover
    • Key focus on offering the best value for money
    • Aviation industry has increased its focus on becoming greener
  12. Market Share

    • High competition will continue to put pressure on fares
      • Figure 26: Top 10 UK-based* airlines, by passenger numbers uplifted globally, 2015-20
    • Low-cost long-haul airlines are back
  13. Launch Activity and Innovation

    • Innovations to increase revenue in response to lower demand
    • Lufthansa introduces Sleeper’s Row to economy class passengers on select long-haul flights
    • More unlimited flight passes were introduced
    • Innovations focused on enhancing passenger wellbeing
    • British Airways launches power nap EnergyPods
    • American Airlines offers in-flight classes for personal enrichment
    • Technological innovations to improve the customer experience
    • British Airways launches in-seat digital ordering platform for food and drink
    • Korean Air introduces baggage loading notification system
    • United Airlines orders supersonic aircraft that can cut travel times in half
    • Increased efforts to reduce and offset carbon emissions
    • Heathrow calls upon UK government to achieve rapid scale up of production of SAF
    • New investments to accelerate the development of electric aircraft
    • Ryanair offers passengers the option to fully offset the emissions from their flight
  14. Advertising and Marketing Activity

    • Above-the-line spend by airlines declined by 70% in 2020
      • Figure 27: Total above-the-line, online display and direct mail advertising expenditure on ads by airlines, 2017-20
    • British Airways’ employees star in new TV add to show passion for taking care of its customers
      • Figure 28: Top 10 above-the line, online display and direct mail advertising expenditure on ads by airlines, 2020
    • Nielsen Ad Intel coverage
  15. Brand Research

    • Brand map
      • Figure 29: Attitudes towards and usage of selected brands, 2021
    • Key brand metrics
      • Figure 30: Key metrics for selected brands, 2021
    • Brand attitudes: easyJet most closely associated with offering good value
      • Figure 31: Attitudes, by brand, 2021
    • Brand personality: Virgin Atlantic and British Airways seen as most ethical, but least accessible
      • Figure 32: Brand personality – macro image, 2021
    • A fifth of Brits who have heard of Ryanair associate the brand with being unreliable
      • Figure 33: Brand personality – micro image, 2021
    • Brand analysis
    • Virgin Atlantic front runner in excellent experience and recommendation levels
      • Figure 34: User profile of Virgin Atlantic, 2021
    • British Airways seen as reliable, efficient and welcoming
      • Figure 35: User profile of British Airways, 2021
    • Jet2.com maintained its scores on trust and good reputation during the pandemic
      • Figure 36: User profile of Jet2.com, 2021
    • Nearly half associate easyJet with offering good value
      • Figure 37: User profile of easyJet, 2021
    • Wizz Air challenged to raise its brand image
      • Figure 38: User profile of Wizz Air, 2021
    • Ryanair invests in improving low customer satisfaction
      • Figure 39: User profile of Ryanair, 2021
    • Reading word clouds
  16. The Consumer – Key Takeaways

    • Participation in holiday flights and VFR set to recover quickest
    • Demand for air travel mostly impacted by COVID-19 uncertainty
    • In July 2021 holiday booking intentions reached highest level since pandemic hit
    • Purchase decisions for plane tickets remain highly price-driven
    • COVID-19 measures to enhance feelings of safety remain important
  17. Impact of COVID-19 on Consumer Behaviour

    • Exposure concerns increased slightly in July amid rising cases
      • Figure 40: Mintel COVID-19 exposure anxiety and lifestyle impact index, 2020-2021
    • Increased travel freedom for fully vaccinated travellers provided small boost to international leisure travel
    • Majority of overseas holiday bookings were still in the pipeline in mid-July
      • Figure 41: Main holidaying intentions by destination, 2021
    • In July 2021 holiday booking intentions reached highest level since pandemic hit
      • Figure 42: Actual bookings and plans to book a holiday in the next three months, 2019-21
  18. Flights by Purpose and Destination

    • Participation in holiday flights and VFR set to recover quickest
      • Figure 43: Participation and future intention to take flights, by purpose, 2021
    • Long-haul destinations continue to be on Brits’ wish list
      • Figure 44: Destinations visited by plane vs intention to visit, 2021
    • Families show high interest in domestic flights
      • Figure 45: Demographic profile by intention to visit destinations by air, 2021
  19. Changes to Frequency

    • Recovery in air travel will be led by younger audiences
      • Figure 46: Changes in the number of flights expected compared to prior to COVID-19, 2021
    • Demand for air travel mostly impacted by COVID-19 uncertainty
    • Few passengers intend to fly less because of the environment …
    • … but consumer consciousness of sustainability has increased
      • Figure 47: Reasons for taking fewer flights in the next three years compared to prior to COVID-19, 2021
    • Nearly 7 in 10 think their business travel behaviour will bounce back to pre-pandemic levels
      • Figure 48: Frequency of business flights once the COVID-19 outbreak is over, 2021
  20. Purchase Drivers when Choosing an Airline

    • Purchase decisions for plane tickets remain highly price-driven
    • Package holidays are an effective path for airlines to increase revenues
    • Environment plays a more important role when choosing domestic flights
      • Figure 49: Factors influencing choice of airline, by plans to visit destinations by plane in the next three years, 2021
    • Business travellers are the least price-sensitive segment
      • Figure 50: Factors influencing choice of airline, by purpose of flights in the next three years, 2021
  21. Attitudes towards the Impact of COVID-19 on Flying

    • COVID-19 measures to enhance feelings of safety remain important
      • Figure 51: Attitudes towards the impact of COVID-19 on flying, 2021
    • A well-known brand is more important amid COVID-19 uncertainty
    • Potential long border queues put two thirds of passengers off flying
    • Older generation continues to value human interaction …
    • … while business travellers are more interested in minimal interaction
  22. Flying Behaviours and Preferences

    • Ultra-long-haul flights appeal to majority of long-haul travellers
      • Figure 52: Interest in ultra-long-haul flights, by demographics, 2021
    • The majority of the younger generation always tend to select the cheapest tickets
      • Figure 53: Attitudes towards selecting the cheapest available tickets, 2021
    • Increased focus on inclusivity
      • Figure 54: Consumer needs for extra support for health/disability needs, 2021
  23. Interest in Amenities and Services

    • Highest interest in flexible cancellation options and spaced out seating on board
      • Figure 55: Willingness to pay for amenities and services, 2021
  24. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  25. Appendix: Central Forecast Methodology

    • Volume forecast and prediction intervals for total traffic
      • Figure 56: Total passenger numbers uplifted at UK airports (prepared on 20 August 2021), 2020-26
    • Volume forecast and prediction intervals for international traffic
      • Figure 57: International passenger numbers uplifted at UK airports (prepared on 20 August 2021), 2020-26
    • Volume forecast and prediction intervals for domestic traffic
      • Figure 58: Domestic passenger numbers uplifted at UK airports (prepared on 20 August 2021), 2020-26
    • Market drivers and assumptions
      • Figure 59: Key drivers affecting Mintel’s market forecast, 2020-25
    • Forecast methodology
  26. Appendix: COVID Scenario Performance Methodology and Assumptions

    • Volume scenario performance for total traffic
      • Figure 60: COVID-19 scenario forecasts for the volume of passenger numbers uplifted at UK airports, 2021-2026
    • Volume scenario performance for international traffic
      • Figure 61: COVID-19 scenario forecasts for the volume of international passenger numbers uplifted at UK airports, 2021-2026
    • Volume scenario performance for domestic traffic
      • Figure 62: COVID-19 scenario forecasts for the volume of domestic passenger numbers uplifted at UK airports, 2016-2026
    • Rapid COVID recovery, central and extended COVID disruption scenarios outline
    • Scenario methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

Consumer

Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

Brand/Company

Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

Market reports provide appendices of data to support the research and insight produced. Our databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

*databooks not available with UK B2B Industry reports.

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