As those of you who’ve been following our Demand Index may already know, the Avinode Marketplace has seen the total value of requested departures in Europe increase by approximately 30% during the first 6 months of 2013 from the same period in 2012. Looking back over the past two years we see an even more encouraging 80% increase in value.
What does this mean?
The Avinode Demand Index monitors the total value of requested trips in the Avinode Marketplace. To accomplish this we combine the number of sent requests for each aircraft category with total prices for each requested trip. Only aircraft priced in euros and dollars are used to calculate demand in Europe and the U.S. respectively. This helps us reduce the effect of currency differences on demand.
When interpreting the Demand Index it’s important to note that there are two basic factors that lead to fluctuations in the index. Changes in either total trip price or number of trip requests will drive demand to either increase or decrease. If we break it down further we can see that demand variations can be caused by changes in the number of flights requested, the total length of requested flights at a given time or the popularity of different aircraft sizes at particular points in time.
The above graph shows the fluctuations between the average trip price and daily number of flight requests over the two year period from January 2011 through December 2012.
For example, when we see a peak in the summer months it indicates a sizable increase in requests for lower priced flights, while a winter holiday peak is due to a small increase in requests for higher priced flights. Breaking it down further we can see that the summer months bring an increase in requests for both short-haul and light jet flights. Meanwhile, in during the winter holiday season we see an increase in longer haul flights and heavier aircraft.In Europe, flight trends tend to alternate between business and leisure during different periods of the year causing large fluctuations in demand for different aircraft types over the course of the year. While we are focusing solely on Europe for the sake of this article, it is interesting to note that the U.S. doesn’t experience the same seasonal variability. This is due to a number of differences between the two markets, chief among them being disparities in client profile and aircraft usage.