The way ahead transport survey - third report

Responses were received from 1100 individuals in the aviation, rail and shipping sectors, providing an authoritative examination of views from around the world.

When we conducted this survey in 2009, concern was running high across the industry in the light of the global financial crisis. In 2010, the picture was one of cautious optimism about a broad recovery. At that time, 17% of respondents thought that the effects of the economic crisis were lessening, with a further 14% saying that they expected an improvement during 2011. We undertook our latest survey at the end of 2011, and set out to test the sense of the experience of the previous three years, the current issue of raising finance and views as to future prospects. We find the general view across the industry is an increasingly polarised one. A mixed picture emerges with both very positive and very negative views being expressed and no widespread consensus on the current state of the transport industry as a whole.

Key findings

• The key lesson for respondents in aviation (55%) and rail (58%) from events since 2008 is the importance of getting and remaining close to their customers and for shipping respondents (55%), the need to maintain cash reserves and secure funding lines.
• The main effect of the financial crisis on shipping respondents (28%) and rail respondents (20%) has been a lack of available funding/reduced flexibility, whereas in aviation, the crisis has prompted a large proportion of respondents (22%) to seek opportunities in new markets.
• The industry was divided between 20% of all respondents expecting an increase in business volumes during 2011 of more than 5%, and 26% expecting a reduction of more than 5%.
• In the context of claims and disputes over the last three years, all sectors report the main experience as having been an increase in contract renegotiation (aviation 52%; rail 44%; shipping 52%).
• The primary source of funding across all sectors has moved from government support in 2010 (45%) to shareholders and equity in 2011 (44%).
• Reducing operating costs is the key financial strategy that the industry is using in all sectors to prepare for further uncertainties ahead (aviation 70%; rail 73%; shipping 49%).
• Of the 45% of respondents who sought finance during 2011, pricing and liquidity were by far the two most pressing issues that respondents had to address in all three sectors.
• General economic uncertainty is cited by the majority in aviation (62%) and rail (71%) as the principal factor restricting the availability of funding and by a majority of all respondents (aviation 63%; rail 64%; shipping 71%) as the greatest threat to the stability of their business.
• In 2012, the primary focus is expected to be on joint ventures, strategic alliances and pools (aviation 43%; rail 45%; shipping 39%), with a low expectation of M&A activity.
• Demand for infrastructure investment from governments remains high, and was selected as the single most helpful form of state intervention in 2009, 2010 and again in 2011.

The survey results suggest that during 2012, transport businesses in all regions are expecting to concentrate on building strategic alliances and sourcing their funding primarily from shareholders, bank debt and retained earnings. Respondents in Asia Pacific and the Middle East say that enlarging their global footprint is a priority. In Europe, North America and Africa, the emphasis will be on increasing product offerings and research and development, while raising equity will be a central activity for transport organisations based in Central and South America.

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