Views: 10 Author: Site Editor Publish Time: 2024-01-04 Origin: Site
A new report projects that the global airport ground handling market will grow at a CAGR of 9.7 per cent from 2024 to 2034.
Market research company Visiongain valued the market at $37.2bn in a paper published last week.
Forecasted to grow at a CAGR (compound annual growth rate) of almost 10 per cent, the report determines that two of the main driving forces behind the projected growth include the expansion of low-cost carriers, and the increase in focus on passenger experience by airports and airlines.
The report found that the coronavirus pandemic had a “profound impact” on the global ground handling market. In addition to the substantial decrease in air travel, significant changes in passenger behaviour and preferences, and a heightened focus on health and safety measures have forced ground handlers to adapt swiftly to industry-wide changes.
The industry remains optimistic, with many saying they are seeing a return to 2019 levels, despite some stagnation post-pandemic. But John Geddes, chief governance and sustainability officer at Menzies Aviation, suggested the projections are optimistic.
He told Airside: “The report sounds pretty racy to me. If you look at pre-Covid and the 10 years prior to that we talked about the market growing at a CAGR of 5 per cent in ground handling. I hope 9.7 per cent is correct, but it seems quite high.”
“We always target growth in excess of 10 per cent per annum, but to get to that figure, the market is rebounding very strongly at the moment … we’re getting back to 2019 levels in most markets and [pandemic] recovery is strong. Commercially, we’re doing quite well at the moment.”
Geddes added that the industry has to work together – from the ground handlers to the airports and airlines – to raise standards because of the staffing issues brought on by Covid, which he explained has had an impact on the sector.
Ivan Jakovljevic, a former ground handling operations manager, shared Geddes’ view that market growth is reliant upon ensuring handlers have the staff to maintain pre-pandemic capacity for operations.
He said: “I think 9.7 per cent is realistic for potential growth. But ground handling itself has its challenges – and the pandemic highlighted the industry’s issues around staff retention and training.
“We need to ease the burden for staff, [because if we don’t] that could stunt growth, even though there’s a potential for the market to grow.”
Damian Devlin, lecturer in aviation management at the University of East London, added: “IATA has forecast an annual passenger demand growth rate of 3.4 per cent, with total demand doubling from four billion in 2019 to eight billion by 2040.
“In light of this long-term outlook, a 9.7 per cent growth rate to 2034 does not seem especially bullish, considering the aviation industry has yet to fully recover to pre-pandemic demand levels at the time of the study.
“There is still uncertainty, however. The sector currently faces some short-term headwinds such as elevated airline operating costs, geopolitical tensions, and macroeconomic drags like high inflation and cost-of-living increases that constrain consumer spending, as well as lingering supply chain disruptions.
“Over the longer term, additional considerations around environmental sustainability and the transition to net zero [carbon] emissions add uncertainty to future growth trajectories.”
