Monday January 30, 2012

Calling The DOT On It's Dishonesty:
The Truth Is Now Officially A Lie

Free speech, increasingly, does not extend to questioning the Regime. For one example, never question anything that's labeled as "consumer protection" - even if it has nothing to do with protecting anybody. 

It's anti-consumer to question any part of anything that comes out of Washington that's postured as being Big-Brother-Good for the poor consumer schlemiels who need the protection of a pack of clowns in congress who are too inept to balance their own budget.

Along those lines, it's now clear that daring to exercise one's First Amendment rights in regard to DOT pronouncements is not acceptable, especially if you're an airline.

It's for real. Remember last year, at an FAA conference, Ray LaHood, the Secretary of Transportation, angrily and literally  ordered airlines "not to be against high-speed rail." He warned them against any criticism of one of the administration's pet projects - one that is so riddled with intellectual, if not political, corruption that it would make Third World cleptocracies blush.

It was not just a comment. It was a threat. It was professional extortion. Shut up and don't be critical of the administration. Or, the not-so-subtle message is, you may get a political brick through the window. When it comes to LaHood's DOT policies, your First Amendment rights don't count.

Fed Fees? They're 15% - 18%. A Lot More Than A Bag Charge. Now comes the new DOT rules requiring airlines to disclose all fees right up front to the consumer. Aside from the fact that that's what most, if not all, airlines have already been doing, it's not a bad idea. But the rule, dishonestly, covers all but federal fees, which are to be buried in the quoted fare.

All other fees must be disclosed, but the fees imposed from Washington are exempt. Sure, airlines can, if they wish, advise the customer of the federal extortion, but it's only Federal fees that are not required to be identified to the consumer.

The DOT rule is intended to mislead the consumer into thinking that the "fare" quoted with tax is all charged by the airline.

It's Not Consumer Protection. It's DOT Dishonesty. Let's cut to the chase. This in not about consumer protection, or full disclosure. It's about a sleazy attempt to mislead the consumer into thinking that federal taxes are part of the airline fare. (Take a look at some of the stupid media stories: "Airlines now required to reveal their fares and taxes..." Emphasis on their.)

That says volumes about where the DOT and the administration are coming from. They'd prefer the consumer not know the exorbitant booty that the feds collect on every ticket. At least with a baggage fee, the consumer knows what he's buying. But regarding the fed extortion, not only are consumers not given any explanation of where the money's going, but they have no say in how the feds spend it. Billions for TSA fees that keep a bureaucracy in business. Billions so that the FAA can comfortably squander more money on a NextGen system that year after year delivers vapor results.

So, it is in the consumers' best interests that the fed fees should be clearly stated to the consumer, too. But that's not the intent of this DOT rule - quite the opposite.

Now comes Spirit Airlines, calling the DOT on their scam. They have correctly and boldly identified the name of the DOT's game. In public statements and on their website. Spirit is telling the truth - that the DOT rules require that federal fees be postured only as part of the fare - which they are not.

But that criticizes the Regime, and as LaHood has made clear, that is not to be tolerated. For speaking the truth, Spirit is taking a hammering - from the DOT, from sleazy politicians, from two-bit hangers-on who try to pander to the Regime, and from zipper-brained reporters who see the term "consumer protection" and don't have the professional integrity to do any research beyond parroting what the DOT says,

Don't miss Sen. Barbara Boxer, D-California, who called Spirit's actions a "deliberate attempt to deceive the flying public," which in itself is a blatant lie.

"I have been shocked by the failure of your airline to tell the truth in an email sent to your customers earlier this week as well as warnings posted on Spirit.com."

Message: if you criticize the government, we will call you a liar, facts not withstanding.

Mobilize The Lackeys. Then there are the usual running dogs of veneer consumerism, such as the bozos who posture their kitchen tables as headquarters of "coalitions," rushing to show their loyalty to the Regime, by issuing pandering press releases denouncing Spirit's "lies."  And since this rule has been supposedly issued to protect the public, by and large the media has painted the airline as being some sort of airborne scam, looking to rip off the public. Much of the media is too lazy to research stories beyond reading the official Regime press release.

The real scam is the DOT, which refuses to require that the public be made fully aware of the severe financial hit federal fees impose on the public.  The real scam is that the public gets hosed on every air trip with government charges. Charges and fees for which there is no accountability. Charges and fees that the DOT wants to dishonestly pass off as an integral part of the fare.

Like Spirit. Hate Spirit. Like the DOT rule, or hate the DOT rule. It makes no nevermind. Now, it's not the DOT rule that's the issue. An airline is being systematically attacked for honestly criticizing the government. That's the issue at hand, and everybody in aviation should recognize that the LaHood regime is not one that respects the right to free speech.

Every honest person in aviation should stand up to this outrage. The track record is clear: first it was the prohibition against criticizing high-speed rail. Now it's not proper to criticize DOT rule-making.

Ignore this at your peril. When a government takes aim at anybody's free speech, and vilifies those who question federal actions, that's a threat to everyone's rights. Right now, it's just some little airline in Florida, so, most people think it's no big deal. It's not affecting anybody but them, so who cares?

Next time, it could by you.

(Note: Boyd Group International has no business relationships with Spirit Airlines.)

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Monday January 23, 2012

Prediction 2012: Kodak Moments In The Airline Industry

Eastman Kodak. A blue chip company. An American industrial icon. The global leader in its field.

Today it's bankrupt. It has no leadership in anything. It's been living off revenues from selling patents. Their main "product"  has degenerated into making lawyers rich by suing anybody they could accuse of infringing on their patents. Their core product lines - film and copy technology - got leapfrogged by technology. They failed to morph into the 21st century.

Guess what - much of the air transportation system in place today is approaching their own Kodak situation. Point: economics are shifting - fundamentally shifting - the basic financial underpinnings of the airline business. As the fleet forecasts of Boyd Group International first predicted, fleets  of 50-seat RJs are becoming economic toast. Turboprops are not the panacea some of the recent media stories have painted them to be. Global Alliances are shifting turf decisions, focusing increasingly on just adding members instead of growing route systems of individual incumbents.

The airline business has changed much the same as what Kodak faced - they can no longer depend on consistent demand growth to fuel profits. They no longer look at competing carriers as fair game for more traffic. The consumer, by and large, no longer has anywhere near the open choice of air service options available just ten years ago. The core business traveler is focused on frequent flyer loyalties, and at any given community there is a very limited brand choice for consumers of all categories. The once rich revenue feed provided by "regional" partners is disappearing due to the sheer costs of smaller aircraft which make less and less economic sense.

Airline competition is now a matter of trench warfare, albeit without much competitive shooting.

What all this means is that in 2012, airline health for large carriers will be based on two key areas. The first is access to global traffic flows - particularly Asia - either directly or via alliance partners. Today, over 26% of all enplanements are directly or indirectly the result of international connectivity. That is going to increase in the coming decade. It's a whole lot more than just having flights to Punta Cana.

As for costs, let's face it - the air traffic control system is a deteriorating joke, NextGen or whatever Madison Avenue name they use. Fuel will continue to go up. New-technology aircraft will be only a blip on the radar screen of total costs. The key metric going forward will be how well a carrier can manage minutes - which is the core factor in airline costs. Unfortunately, most carriers are focusing just  on the bargaining table, not the airport ramp, to get costs down. 

The Kodak example has been seen in the past in the airline industry, where former powerhouses such as Braniff, Eastern, TWA, and others suddenly found themselves out in the cold and out of business because they had management that started to believe their own press. Or, the business environment suddenly outgrew the management abilities they had in place, resulting in catastrophic planning decisions. In this racket, a couple of strategic mistakes can take a carrier from being the darling of Wall Street to the steps of the bankruptcy court in a very short period of time.

Year 2012 is going to have a number of Kodak situations in the airline industry. We're already seeing it in the "regional" sector, where operators are finding 50-seat jets to be akin to a roll or Ektachrome. Nice stuff, but the market is a sliver of what it was 20 years ago.

Prediction: by December, we may well be seeing the same dynamic affecting some brand-names in the industry. Evolve or start to go away.

Kodak Moments are coming.

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Monday January 16, 2012

Another Beacon From The Financial World

In the San Francisco Chronicle, an entity called "Investopedia" last week published "A Look At The Airline Industry." Breathtaking in scope, mind-boggling in depth, bold in its conclusions. Truly a work to be reckoned with...

In addition to many profound insights, such as the tidbit advising readers that American Airlines is retiring its "MD-80 aircrafts," there was this:

"...Domestic routes are ruled by local players and margins are low. Southwest Airlines, JetBlue Airways, AirTran and Alaska Air are all low-cost domestic carriers fitting into a space that is becoming unviable for legacy players to play in. These domestic carriers usually have one type of aircraft, outsource maintenance, use lesser used airports (thus reducing landing costs) and encourage direct booking online to reduce intermediary costs. For these reasons, domestic route players are primarily becoming hub feeders..."

Somebody better let Southwest know that their entire maintenance operation at DAL does not exist, and tell B6 that they don't have A-320s and E-190s. And ask them all to check out their "landing costs" - which don't seem to be a line-item on any of their P&Ls. Call JetBlue and the Port Authority and let them know that JFK is now a "lesser-used" airport. Will someone please call Southwest and JetBlue and let them know that they're now hub feeders?

Articles like this from the financial "experts" belong at the bottom of bird feeders.
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Prediction 2012: Airlines Are No Longer in The Volume Business

American Airlines is pulling out of Burbank.

To most folks, it's just a minor route decision. To some of the talking heads in the financial world (above), it's due to inability to compete. It's neither. It's another planning outcome of an airline industry that's fundamentally different in structure and competitive strategy than just three years ago. It is fallout from a wholly-different business model - one that's already in place.

Here's the key point: air passenger traffic is now more a function of what airlines want to capture, instead of what's available to capture. This is the reason that traditional airport and system forecasting doesn't work anymore. In fact, it can - and does - sometimes lead planners and communities off into the weeds.

It's The Front Office, Not Main Street, That Drives "Demand." Historically, forecasting air passenger traffic was a matter of projecting key metrics such as GDP, disposable income, population shifts, and other data. From this, passenger "demand" could be estimated into the future, with the assumption that the airline industry would simply respond  by adding capacity to meet the projected opportunities in traffic growth. In effect, the assumption was that the airline business would be the caboose on the national economic train.

• Those were the days when lots of airlines competed with one another.

• Those were the days when the airlines focused on individual system expansion.

• Those were the days before frequent flyer programs that were engineered to identify and retain high-end business traffic, while focusing on using the economy cabin to provide fill-in revenues.

• Those were the days before having a few front-cabin passengers connecting from Shanghai or Munich became much more important that gaggles of consumers that could be generated with fare sales.

• Those were the days before global alliances and the concept of "alliance turf."

• Those were the days before raw airliner economics pointed to an air transportation system in the US that will be much more dependent on the automobile to get to the fewer airports served.

Those were the days that don't exist anymore.

Airline systems now generate the capacity that specifically fits their strategies. For one example, the year 2011 is expected to clock out with nearly flat traffic compared to 2011 - up only slightly at 1.6%. to1.8%, and well below the rates indicated earlier in the year.

And as it stands today, there will be a decline in passenger traffic in 2012 - because airlines are cutting back on capacity. Based on Aviation DataMiner analyses of data filed with our partner Innovata, LLC,  airlines will be putting almost 3% fewer flights into the skies in the 1Q of 2012, compared to the same period last year. With fleet shifts, this will translate into almost 2% fewer seats for sale. It's a lead-pipe cinch these data are just the start: airlines will be cutting back further in 2012. 

Don't mis-read this - it is not just a fallout from the recession that, regardless of what the parrots in the media might say, is still going on. It's due to a fundamental shift in the business structure of the airline industry. As noted above, historically, the idea was to carry as many passengers as possible. What has been missed is the shift to focusing on balancing their costs and their operations to the specific revenue streams - both qualitative and geographic - that can maximize the bottom line. It is a permanent shift.

This is what sets the Boyd Group International's Airports:USA enplanement forecasts apart from others - including the annual FAA Aerospace Forecasts. The latter assume that passenger traffic is the result of issues such as changes year to year in GDP, buying power, incomes and whatnot. The assumption is that when these go up, travel demand goes up, and the airline industry will be there to satisfy that intrinsic demand.

That was a forecasting methodology that may have been valid in the 1960s, 70s, and 80s, but as they say down on the ranch, not no more. Airlines are now in the bottom-line business more than the passenger volume business. This means that with a consolidated industry, the name of the game is to maximize the return from "brand-fiefdoms," not necessarily attempt to conquer new traffic territory from the competition.

At risk of making an indelicate comparison, it's sort of like the "five family" structure that was one of the key storylines in The Godfather. Each family had its territory, and give or take a skirmish or two on the geographical margins, there was an uneasy peace between the Families. Major airline systems - now evolving into global alliance brands - have now generally taken a similar approach.

Circle The 737s. Expand Turf With Additional Alliance Members, Not More Airplanes. We've reviewed in the past how American dropped BOS-SFO nonstops, despite strong load factors and good yields. Neither city, however, was a stronghold any longer for AA,  or more importantly for the oneworld Alliance. So they moved the aircraft resources elsewhere. The same territorial dynamic was in place when Qantas moved its SYD-SFO flights to SYD-DFW. Circling back to Burbank - AA also dropped BUR-DFW - a route with @ an 82% load factor. Reason? They will near-certainly keep the high-yield traffic on their DFW-LAX flights. Passengers - at least to ones AA wants to keep - will use LAX.

Traffic Forecasts: Driven By Strategies More Than Economics. This is the fundamental approach taken by Boyd Group International's Airports:USA enplanement forecast product. We understand that while economics and demographics are a factor, they take a way-back seat to shifts in airline strategies at a each airport. Hence, we have better, more realistic forecasts than the mathematical-modeled projections produced by the FAA and other sources

It's also the reason that airports, aircraft manufacturers, suppliers, engineering firms and financial institutions turn to us when they need forecasting and cutting-edge consulting expertise. For more information, click here.
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Update:

Armbrust Aviation Group

This is the event where US companies can obtain tremendous insight regarding China's aviation & airline industries. We are honored that the honorable Mr. Li Jianxiang, Minister of Civil Aviation Administration and the honorable Mr. Liu Tienan, Minister of National Energy Administration will speak at the conference.

Representatives will be there also from major Chinese airline systems. For airports, aviation authorities and other entities seeking more interaction with the opportunities represented by the growth in US-China trade, this is the event to attend in 2012.

Boyd Group International will be holding Path-Finding Sessions outlining areas where mutual opportunities are emerging for doing business with this growing aviation economy. Click above for more details and to register.
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Monday January 9, 2012

From The You-Can't-Make-This-Up-Department

“Rome, N.Y.  January 6, 2012. What if you could cruise over to Griffiss International Airport (in Rome, New York), fly to Dayton and on to San Francisco or some other destination?

... Oneida County officials are engaging a study to see if enough area residents would be interested.
If they are, and the airport is equipped, it’s possible a small airline company would step up to provide the service…

… The $19,000 study will first look specifically at the Dayton option. The study will determine what the volume of such traffic could be, and also examine whether the general public would use the option of using Dayton as an alternative connecting hub to the busy New York City airports...

...From Dayton, travelers can hop flights to a slew of airports, including ones in Washington, D.C., Chicago, Milwaukee, Orlando and New York….”

Got it? Cruise to Griffiss. Get on a small airline company, Fly to Dayton, as an alternative connecting hub, Then  hop on a slew of flights to the Big Apple.

It'll be the new paradigm in air travel.

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Prediction 2012:
The Year Air Transportation Reality Comes Back To Earth

Obsolescence:  a loss in utility or value that results over time from intrinsic limitations or circumstances
that result from external factors that render an entity or function as no longer competitive, unattractive to purchasers or investors, or of decreasing usefulness...

This perfectly describes substantial parts of  what we take for granted as the air transportation system.  Much of it is functionally obsolescent. It does not work anymore. It's unattractive to purchasers or investors.

Air Travel Obsolete? Non-Functional? Decreasing Usefulness? Heresy! For 60 years, the expansion of the air transportation system has been a march to the future. So, how could any of it now be moving to be obsolete as a travel mode?

One word, Benjamin: fuel. Another couple words: relative economic value. The technology related to levitating airplanes in many small markets is a home-run in meeting the above definition: it's no longer price-competitive, at least in terms of relative value, which now makes it unattractive to consumers.

Let's state the heresy clearly: In many cases, air transportation simply is no longer a viable mode of transportation for many smaller communities. It's not time-efficient nor cost-efficient in many applications, either.

"Yeah? It takes three hours to drive from Happyville to Indianapolis. Air service would reduce that to just 45 minutes!"

Right, Lone Ranger. But you ain't traveling between those two points. You're going from your home or office to another home or office. The air trip is just one part of it, and it departs and arrives at set times, not at your convenience. And getting to and from that alleged flight means having ground transportation at each end. All of which means less convenience, more cost, and a product that actually doesn't meet many consumers needs.

Sorry, but airplanes for scheduled intra-state or intra regional transportation to small communities are usually a great way to lose a lot of money. It is, by definition, an obsolescent means of transportation for that application. Unless it's to a major connecting hub, it's a lost cause. And even then, there are many cases where it no longer works. Standby for news throughout 2012.

Profit Center: Peddling The Bunker Mentality. This has been proven time and again in the last ten years although it's not a contention that needs to be "proven" - it's clear and obvious. The lack of aircraft, operators, and business interest in this part of the airline industry make it a fact:.

The economics of the airline business have evolved to the point that there are very few airline players left, and it does not require a "study" to identify them and determine if the community fits their systems.

Possibly nowhere is this more obvious than the Kabuki Theatrics going on in the area of air service development, particularly at rural communities. It's degenerated into games, schemes and side-shows attempting to create what simply isn't possible. The number of meetings, conferences, training events, and air service get-togethers have developed into a giant year-round cocktail-party circuit.  But they're not going to change raw airline economics. Forget offshore drilling - if consultant snake oil could be refined, we'd have a solution to energy self-sufficiency.

It really has in many cases degenerated in to selling unwary communities programs that can only be described as air-service-gone-bunker-mentality. Recall the dozens of movies made, showing the deluded dictator sitting in a bare concrete structure deep in the ground, isolated from reality, moving imaginary troops and tanks around a map, with the belief they were coming to relieve the city. But the troops and tanks didn't exist anymore. They were just on a piece of paper that had no relationship to the outside world.

It's not much different with some schemes, studies, and "plans" passed off on communities who  are desperate for local air service. Internet surveys with less scientific basis than a Ouija Board are done, "identifying" the panting public demand. Documents and massive slide decks are produced to show great air service potential, and imply that there are airlines out there ready to jump at the opportunity.

The communities are thrilled at the prospect that air service relief is in the works. But just like Berlin in 1945, there are no airlines and there is no opportunity. It's all just on paper, and the community is getting deluded information. And a healthy invoice for the show.

If We Need It, We Don't Need To Find Out If It'll Work. A few weeks ago, there was a flurry of sunshine articles lauding a proposal to establish an intra-state airline operated with, golly, wow! - turboprops. "These aren't your father's turboprops," gushed an RAA official, who went on to describe the latest and greatest about 70-seat models. Perfect for capturing all the latent intra-state O&D at small communities that can't generate sufficient traffic to a major connecting hub. Or, as another industry alphabet person suggested, getting 19-seat or 15-seat aircraft and have at it. It will capture that traffic that exists only in the minds of the paid consultant "studies" that somehow tend to pop up around such schemes.

Nope, they don't need no stinkin' facts. Like, who'd invest in such a project? Just who'd be the operator? Gee, how 'come just about every other attempt at intra-state air service went over like a lead balloon? Just a couple weeks ago, an attempt at point-to-point service between Twin Falls and Boise went glub. "Yeahbutt, Horizon used to fly it, and by golly, it was always full!"  They did a survey, too. Guess what it said.

Regardless of the situation, avoiding reality is a sure path to results that are decidedly not pleasant. It's the equivalent of digging deeper to get out of the hole.

But in the coming year, reality is going to set in. The half-baked schemes will burn enough communities that word will get around. The cocktail-party circuit will wind down. The concepts of regionalization and road-hubbing are going to come into play.

At some point, everybody has to come out of the bunker and into reality. That's going to be a trend in 2012.

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Monday January 2, 2012

Boyd Group International to Participate In China Conference

We're honored to announce that Boyd Group International will be participating in the Armbrust Aviation Group China International Aviation Fuel Conference & Exhibition in Beijing, April 4-6, 2012.

The Pacific Ocean has commerce in both directions, and the growing aviation industry in the Middle Kingdom is rapidly becoming a global industry. This has been reviewed year after year at the annual Boyd Group International Aviation Forecast Summits - China today is a driving force in economic growth, advanced technology, and aviation investment in the US. Firms that recognize this have a competitive advantage  - on both sides of the Pacific.

This is the event that gives airports, airlines, suppliers, and financial institutions the contacts and insights they need to understand and take advantage of the China opportunity.

Think You're Not Affected By Fuel Trends? Think Again. It's The Foundation Element In Aviation Planning. This the value of the Armbrust Aviation China International Aviation Fuel Conference & Exhibition. Fuel and related trends are the bedrock on which the future dynamics of aviation will develop. Manufacturers and suppliers have their long-term planning tied to the economics that result from fuel trends. Airlines make fleet decisions based largely on fuel trend considerations. (Example: witness the recent rush to order re-engined single-aisle airliners and the corresponding push to get "regional" jets parked in the desert as fast as possible.)

Airlines make market planning and hub growth decisions based on where they see fuel trends going. This Conference is about the direction of global aviation in the future, and Armbrust Aviation Group is the pre-eminent leader in identifying the wide-ranging effects of trends in aviation fuel across the world.

Get A Perspective On Your Opportunities With China Aviation. In addition to the other important events at the Conference, Boyd Group International will be holding incisive Path-Finding Sessions, designed to outline the Chinese aviation market, and the global investment direction of Chinese companies.

These sessions will provide airlines, airports, suppliers, and financial institutions with insight on how to align future planning to take advantage of the business opportunities represented by China.

Click here for more details on this event.

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The Year Ahead In US Air Service...

"Chris Gonna Find Raaaay Charles!"
- Queen Isabella, 1492

That's a line from a classic 1960's Flip Wilson routine. It's based on Columbus scamming Queen Isabella into funding his trip to America by promising to discover Ray Charles.

Take a listen. We hear similar exclamations today from small communities across the nation, except they're a long way from comedy: "Consultant gonna find San Jose!" Or Chicago. Or air service where there's no traffic. Or magic interstate commuter service. Or  some other objective that's about as likely as Christopher Columbus actually finding the late Mr. Charles in 1492.  In too many cases, intentional or unintentional, it's a scam.

In reality, it would be more ethical to actually promise to find Ray Charles. At least we know where he's buried. As for promising to find flights from a small community to a non-hubsite airport, or to set up a interstate commuter system, or starting service from tiny communities 40 minutes from airports that already have low-fare service, or promising self-funded RJ service, or doing studies to discover the identity of "any airline" to fly to Chicago, Flip Wilson must be getting a good laugh from the great beyond.

2012: The Year of Reality. This is going to be one of the realities that hits home in 2012. All the air service meetings, conferences, "best practices," hoedowns, hootenannies, and social functions held throughout the year don't change economic realities. "Pitching a route proposal" to an airline sounds great - but only if it fits in the realities of air service economics.

Some realities that will become bigger than life in the coming year:

• Regionalization. Small community air service access is shifting from local to regional. For example, the 50,000 or so passengers that have disappeared at Muskegon over the past decade aren't staying at home - they're driving the hour or so to Grand Rapids. It's happening across the nation. Changing fleets and evolving aircraft economics are the reason. It's a trend that cannot be reversed, and communities need to recognize and plan for it. Pueblo, Colorado has great air service, too. It's 45 minutes away at Colorado Springs. That's not much different that the time it takes consumers to get from Rockville Center to LaGuardia.

• The Auto Will Have A Bigger Role In Air Service. The name of the consumer demand game is connectivity - not flights from the local airport. When there's a major airline connecting hubsite 60-90 minutes away from a small community that has no real air service history, an appropriate consultant response to an air service RFP might be to send back a Ray Charles CD. At least they could have some good tunes as they drive to the bigger airport.  In most cases, purporting to tell a small unserved community that it can attract air service that consumers will actually use smacks  on the ragged edge of ethics.

• Smaller Airline Systems. There are no hidden commuter airlines to come and serve small communities, particularly the ones that don't generate enough local traffic to fill a VW microbus. Not only that, but there is no secret fleet of 15-seat or 19-seat turboprops out there to recreate the air service system of the 1980s. So when an unserved community announces a program to "find an airline" - they're getting scammed. There is a finite and immediately-identifiable number of airlines, and determining whether a community fits with their systems doesn't require much work.

• Realities Trump Flim-Flam. Doing unscientific internet surveys of "where people want to fly" is one of the latest trendy scams foisted on unwary communities. Sure, the responses are always overwhelmingly positive, with quicksand conclusions like, "80% of respondents said they'd use the service if it were offered."  

A couple years ago a community apparently paid big bucks to survey "demand" for flights to San Jose. Yup, survey results said it was huge. But what the community wasn't told was that there is no hubbing carrier at SJC and the local traffic wasn't enough to support the market. They weren't told that the only airline operating the turboprop equipment that might even distantly fit was the one dropping the service in the first place, Finally, any cursory look at the airlines in existence revealed that none of them strategically would have any earthly interest in shifting RJ assets to a route that provided no system feed and would lose money by the planeload.

That was two years ago. The SJC service, predictably, never came back.

Gravity is going to take hold in 2012: No matter how many schemes, studies, or other smoke-and-mirrors programs are suggested. There are limited airlines, limited aircraft, and  - face it - a shrinking air service network.

The hard fact - which we will cover next week in the Boyd Group International Predictions for 2012 - is that entire portions of the national air transportation system are now obsolete.

Check out the definition of that word. The economics just don't work anymore  Alternatives need to be pursued.

Just like Ray Charles, those B-1900s aren't coming back..
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Finally... A New Aviation DataMiner Strategic Gateway

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Now with the capabilities to encompass and enhance all areas of each subscriber's exact current and future aviation data requirements, Aviation DataMiner again moves well beyond other data systems that simply regurgitate only BTS tables.

Click here for a review.

Finally... At Least She Was Working At The Right Airport...

"December 19, 2011. The former office manger at Outlaw Field, Clarksville-Montgomery County's airport, has been sentenced to both jail and probation time for stealing more than $60,000 from the airport..."
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Monday, December 19, 2011

Tarmac Delays! Out of Control!

At least that seems to be the tenor of the junior Woodward & Bernstein wannabes covering the airline industry... "Airlines violated the DOT rule on tarmac delays 18 times in October!" was one general theme. Yes, friends, they violated the rule.

Then there were comments to the effect that "The DOT limits tarmac delays to 3 hours for domestic flights and 4 hours for international flights."  It gives one pause to wonder if journalism schools are graduating students by mail-order. It's the same as reporting, "DOT has ordered God not to have snowstorms that will create tarmac delays..."

To read the stories, tarmac delays are spreading like an evil fungus, endangering consumers, frightening small children, threatening democracy, and raising the wrath of Ray LaHood. But let's put it in context.

In October, the US airline industry had over 715,000 flights scheduled. Eighteen flights had the chutzpa to "violate" the DOT rule. The majority were due to an ATC outage at Newark. Ten were international arrivals that couldn't clear customs.

Now, if we take all of the 18 tarmac-violators, and get a percentage, it means that two one-thousands of one percent of all flights operated in October were inflicted with this dread event. Now, it's not certain how many passengers were involved, but let's assume an average of 150 per airplane. That's 2,700 passengers. Compare that to the roughly 43 million passengers (passengers, not enplanements) who took flights in October, and the odds of getting caught in the media-reported tsunami of tarmac delays: six one-thousands of one percent.

Use either metric. As far as tarmac delays being a threat to the public, it's about the same as an ant crawling up an elephant's rear end with lust on its mind.

Great journalism, guys.

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Fares: Second Quarter 2011
The Real Cost-Ranking

Despite the BTS news stories, Cincinnati/Northern Kentucky doesn't have the highest fares in the US. Neither does Memphis.

in fact, CVG's not even in the top 25 of airports with traffic over 25,000 passengers in the quarter.

The reason is that BTS data is not fare data, per se, but "ticket spend" - the total of all reported itineraries, one-way, round-trip, multi-stop - divided by the dollars indicated. It's a very valuable and useful metric to compare travel patterns at various airports. But it doesn't identify where air travel itself is more expensive or less expensive. The location of the city, and the business/leisure mix will materially affect consumer air travel buying habits. Newark would tend to have different consumer travel patterns than, say Las Vegas.

The real metric regarding the cost of air travel at a given city is what passengers are paying per-mile. And again, CVG isn't near the top of that hit parade, either.

For example, the place in the US (including territories) with the highest average one-way fares is Guam - over $600 including federal feel and taxes. And that's because when flying out of the place, in general the next stop is LA or Tokyo. The average trip length, which is a key determinant in ticket price, is over 5,000 miles for passengers to or from GUM. Consumers flying to or from Nantucket - which was #1 based on travel cost per mile - only traveled an average of 276 miles.

The DataFlash this week takes the top 250 airports for the 2Q 2011, and ranks the top 25 in cost of a one-way fare, and also the cost of air travel per-mile.

By the way, consumers paid 9,3% more for air travel ($217.02 v $198.54) for air travel compared to the same period in 2010. The average one-way journey was virtually unchanged at 1,174, v 1,169.

It's from Aviation DataMiner. Real-World Business Intelligence. Not just numbers. Click here to go to the DataFlash.

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Now Available:
ATL: Life After AirTran
Less Traffic, Not More.

This analysis is a follow-up to the study done by Boyd Group International immediately after the announcement of the Southwest acquisition of AirTran.

Compiled independently, the prognosis is clear: Atlanta will experience a traffic decline as a result of this merger. The simple reason is that Southwest is a well-managed company, but its operating system simply cannot take advantage of all of the revenue flows inherited from AirTran.

Again, a study that questions what "everybody knows" using hard data from Aviation DataMiner, and analysis from the professionals at Boyd Group International. Click here to download the forecasts that other consultants will be parroting six months from now.

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Senator Schumer Demands More Bureaucracy For Consumers

"We have to have a balance between security and convenience..."

When something's wrong with the government, the #1 solution from the hacks in the middle of it is to implement more government. That's the solution that Senator Chuck Schumer  D-NY) is proposing to address recent TSA screening outrages, such as elderly passengers being strip-searched.

The intrepid Senator wants the TSA to appoint and train employees to be passenger advocates to resolve disagreements between screeners and screen-ees. The advocate would be a regular TSA employee, but would be there to represent consumer interests. Advocates would be at every airport, with at least one on duty at all times.

Yup, that'll work. A TSA employee right on site to tell other TSA employees that they're wrong. Or, stand up to the supervisor on duty or the FSD and tell them not to harass a passenger, or that their understanding of a rule is not accurate. That Advocate guy oughta be real popular in the TSA breakroom.

Schumer's suggestion is typical of a politician that puts "the system" ahead of the public. Instead of standing up and demanding that the TSA be transformed into a real security organization, the Senator wants to create an in-house security version of a yellow-dog union - an "advocate" that supposedly represents the public, but is paid and directed by the TSA.

Schumer wants a balance between "security and convenience." That can't ever happen as long as congress and folks like Schumer think the solution to the mess in aviation security is just throwing more bureaucracy at it.

Here's a factoid: The TSA was envisioned to have 16,500 employees. Today, the management ranks at the organization alone represent half that number - about 20 for every scheduled passenger airport. And Schumer thinks we need to get more staff.

How 'bout a balance between good sense and excellence in security? Nah. That's too hard for politicians to understand.

And, On The Other Side Of The Aisle...

Representative Marsha Blackburn (R-TN) has introduced a bill to remove the title "officer" and the related badges from TSA screeners. Unlike Schumer's proposal, this one already has support of 25 co-sponsors.

The hard fact is that the term "officer" traditionally refers to individuals who are qualified to be law-enforcement officials (hence, "officers") and have legal authority for arrest. The TSA staff were hired and trained as screeners, not officers in any capacity. Screeners. Sorry, but that is the job. Unfortunately, the politically-appointed hacks in charge of the TSA over the last 10 years have played silly games with the TSA - more show than security go.

But now, we're paying a price for another incompetent Bush Administration appointee, one who had no qualifications whatsoever to be TSA Administrator. One who was repeatedly lauded by alphabet organizations. One who's been given awards by groups of oh-so-concerned consultant organizations. One who once responded to repeated failures of screener tests by simply saying he was proud of his people. Yes, it was the indomitable Kip Hawley.

Hawley had no security background. He was a railroad executive. But, he was a buddy of W's. It was Hawley that got the brilliant idea to re-title screeners as "officers" and give them metal badges, just like police, even though the job was screening, not law-enforcement, and the staff had no such training. But it would look like law enforcement, see.

All to "improve morale" - and supposedly improve the public image of the TSA, which, accurately, had already become synonymous with waste, poor management, and government incompetence. Instead of trying to fix the real flaws at the TSA, Hawley and Bush tried to hide it behind a gold badge and a new blue uniform.

Now, to take the title away - even though it never should have been there in the first place - is viewed as an  "insult" to the screeners. But the truth is that what's out there is a screening staff, not law-enforcement. It is very unfortunate that Bush had no more judgment of character or ethics - he appointed a string of embarrassing nebbishes to TSA Administrator position. Hawley was one of them, and it was he who tried the cheap stunt of trying to re-uniform, instead of reform, the TSA.

The folks in the blue shirts are fine people. But they weren't hired as law-enforcement, and to give them such titles was the result of flat-out inept management and the smoke and mirrors that two-bit politicians on both sides of the aisle are playing with aviation security.

Titles and badges, however, are just another sideshow that diverts attention for the real issue - aviation security that's scored by political, not functional metrics. It would be refreshing if people like Schumer and Blackburn would call for accountability at the TSA, instead doing  cheap PR stunts.

Not going to happen. Nobody really cares.  Nobody wants to make the effort. Just like before 9/11.

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Monday, December 5, 2011

The AMR Bankruptcy -
So Many Things We Didn't Know About The Airline Business

It's been a bonanza for creative writers and Walter-Mitty-esque "financial analysts" working on the fringes of reality. The AMR C-11 filing, that is.

The past week has been a hoot, reading all the "expert" prognostications on the causes, outcomes, and fallout from the AMR bankruptcy... Some of the great insights we've found at various media outlets:

"... Now that the airline is in bankruptcy, it is likely to cut back on schedules and the number of seats on various flights, to save money. That will make even fewer seats available for purchase – either with dollars or with points....

Really? Where are the data to support the projection that the airline will cut back on "various flights" to "save money" as a direct result of the Chapter 11 filing? The direct cause of the decision to file was high debt load and the challenges of a costly pension program. How will cutting back on flying fix that?

No matter, it was in the press, so it must be accurate.

Or, from the LA Times...

...The 777 jets will include lie-flat seats in first- and business-class sections, mood lighting and a walk-up bar stocked with snacks and drinks, the airline said. Throughout the plane, passengers will have access to an entertainment system with 120 movies, more than 150 TV programs and 350 audio channels.... American ordered the narrow-body planes in July to replace the airline's MD-80s, most of which had been built from 1979 to 1999. The new planes are expected to be up to 35% more fuel efficient than the MD-80s.

You bet... Somebody please let airports know so they can order new Jetways when the 777s replace those MD-80s. Great research, reporter.

Now Ready...

The AMR Bankruptcy - Now For Some Reality

As noted above, suddenly, there are dozens of sudden "experts" on AMR in particular and the airline industry in general.. Click here to download some FAQs that get around the haze of idiocy coming out of from some of the gurus the financial industry.

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Monday, November 28, 2011

Uncomfortable? Things Not Perfect?
Take 'Em To Court

The latest trend in the legal industry seems to be chasing airplanes instead of ambulances.

• Delta Air Lines is reportedly being accused of having noisy airplane cabins.

• AirTran is getting zapped because a couple passengers saw cockroaches.

• Southwest is facing charges for breach of contract (or some other legal gobbledy-gook) for suddenly making drink coupons valid for day-of-flight only. An outraged consumer claims he's been defrauded of 45 free cocktails. (He's apparently been squirreling them away. What was he planning to do with almost four dozen free drinks - go on a bender between PHX and Burbank? Rest assured, one of the comebacks from the plaintiff's lawyer will be: "It's not the booze. It's the principle." Maybe he might want to consider how valid that comment might be.)

• Reportedly, a passenger is going after an airline for turbulence, claiming the pilot was incompetent for flying into bad weather. Nice that the guy in 13E knows more about how to divert around a weather system better than the pilot in command.

What's next?

• How 'bout suing for "boarding anxiety" - the unreasonable anguish inflicted by being in boarding group #3, waiting while "premium" frequent flyer categories described by every mineral known to man (Gold, Platinum, Titanium, Kryptonite, Bauxite, Spent Uranium, etc.,) are called first, and not knowing if there's going to be overhead space for your roller bag.

• Or, "child cruelty" by showing an in-flight movie that had to be shut off ten minutes before an early arrival, defrauding children throughout the cabin of the exciting end of the Muppet Movie Christmas Carol?  "My four-year-old may be permanently damaged by not knowing whether Kermit The Frog ever actually found Santa Claus..."

• Or, maybe mental abuse - like having to read the airline's in-flight magazine, which typically has some of the most vapid, meaningless and mind-numbing articles ever written by the hand of man. They're the only things the airline now supplies to read on-board. If your Kindle battery goes down on a long flight, that could be really painful. (Find your fun in Kabul! It's Air Fred's newest destination! or, How to make perfect mare's milk - or better, fly us Ulan Bator to find out from the locals!)

The worst part of this is that it's probably cheaper for the airline to just toss these people some fast money, instead of taking them down legally in court. Lawyers know that in front of a jury, airlines today are about as popular as Darth Vader in drag.

It's a cost of doing business. In most cases, it's also giving in to petty extortion.
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Start-Up Airlines: A Quick Review Since 1978

We've revised a review done a few years ago of some of the whiz-bang new airlines that have come and gone since the outset of airline deregulation.

While there have been a few that actually succeeded, most attempts at starting new airlines and new competition have ended up with the founders fatally shooting themselves in the landing gear.

The claims by consumer twits that new competition over the years has been choked off by greedy incumbents is mostly vacuum-brained, albeit trendy, hogwash. In most cases, incumbents never got the opportunity. Various other causes for failure - dimbulb business plans, total idiots at the helm, financial shenanigans, or just pure stupidity zapped these start-ups before competition had a chance to do it.

Click here for the review.
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Monday, November 21, 2011

Travel Likely Down, This Thanksgiving

"Big crowds are expected to descend on the nation’s airports this week..."

 'Tis the season. It's when the stories appear about long lines, "jam-packed" airplanes, and fall-of-Saigon-like chaos at airports across the nation. Makes great press.

But it's not really consistent with reality. There is no spike in flights, nor is there a significant spike in passenger numbers, either.

Airlines have been operating at 80%+ load factors for years, so the "holiday spike" isn't what the stories on the local news seem to indicate. The real slow-downs are not due to more volume, but probably due to a shift in the clientele - fewer business and more leisure travelers, and maybe lots of kids. (And, no, airlines are not universally sticking them in the back of the airplanes, either.)

But lo! This year, traffic is likely to be down from 2010. A look at the departures and seats offered this Thanksgiving week (measured from the Sunday before, through the Monday after) compared to 2010 show almost 4% less flights and 3% fewer seats in the sky.

Also, contrary to the lore - there will be no additional airplanes in the sky for Thanksgiving. In fact, not only is capacity down from one year ago, it's also down from the prior 8-day period, too. So the usual news stories about "crowded" skies are nice, maybe - but they are not based on fact.

This data is analyzed from filings with our partner Innovata, LLC, and analyzed by Aviation DataMiner as of November 16.
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Summary Review:
TSA – Ten Years In

 In 1997, Boyd Group International was quoted in the Wall Street Journal:

“To a professional terrorist, US airports have the security of a Laundromat…”  

 Fourteen years, Four hijackings, 65,000 “security” staff, and billions of dollars later, that statement is still true.  No - we are not any safer than before 9/11.

We've seen ten years of the TSA in action. Stick close. Get a cup of coffee. We're going to cover key points that everybody with a pulse and a sense of ethics knows about the TSA, but are strictly not to be mentioned for fear of being labeled as being a weirdo - or "unpatriotic."

Start: The TSA Has An Ally: Buddy Reporters. You gotta love the occasional stories by a few of the usual suspect network correspondents. They get “exclusive” interviews with the TSA Administrator, during which they never ask a hard question, and then come roaring out like pie-eyed teenage groupies just leaving a Justin Bieber concert.

You’ve seen the evening news pieces generated from these wind-up-toy interviews. Earnestly voicing-over b-roll of a security check point, the near-breathless correspondent – usually one that fancies himself an expert, even though he wouldn’t recognize an encapsulated pistol from a bottle of Ex-Lax - gushes back to the anchorman: “Bob, Administrator Pistole showed me the new programs being implemented to make us safer than ever before. Body scanners. Behavioral screening. Trusted traveler programs. Great progress is being made…”

In point of fact, it’s all a load of yogurt. But dare try to point out any facts to the august correspondent, and he’ll come unglued, intimating that the questioner is a crackpot.  ‘Course the correspondent’s never had responsibility for a security check point. Never had any training in security procedures. Never developed a GSC program. Never taken any gander at reports from Red Team inspectors, or even given them the courtesy of responding to their e-mails. Never paid much attention to study after study by the GAO.  Nope. But he's been at TSA briefings, and that's all he needs. He's there to defend the TSA, regardless of the facts - and the truth.

Ten Years of Screening. Not Security. We can start with this: the main focus of the TSA is passenger screening, not security. Not threat identification. Not event mitigation. Not contingency planning. It’s mostly about looking for proscribed items. That's not security. It's the pointy-object patrol.

Locking The Barn Door After The Ranch House Gets Burglarized. Besides, passenger screening most certainly was not the security failure on 9/11. The whole system failed. The evidence from 9/11 points to the weapons getting on airplanes in ways other than screening checkpoints – like via buddies working on the ramp. We know the hijackers studied Logan airport and the other airports weeks before the event – so getting caught going through passenger screening wasn’t a risk they likely  wanted to take, particularly for a caper planned so extensively. Besides – the tapes show the hijackers at Washington/IAD getting a complete secondary screening.

But what did Congress and the Bush Administration do? Held a press conference, did a special session of congress, and then began chasing their tails. They immediately lauded the nincompoops at the top of the FAA who to this day have blood on their hands for inept management of aviation security. They tossed billions at passenger screening, not airport security.

Norman Mineta, Bush's DOT Secretary, (and a professional Cabinet appointee) was particularly a deer in the headlights. As a PR stunt, he commissioned several special "committees" to make suggestions. To this day, we've never seen any substantive reports on what those committees came up with. It's secret, Mineta, claims.

Here Are Points Those Network "Experts" Intentionally Ignore. But getting back to the ten year anniversary, here are some facts on the "success' of the Transportation Security Administration. Read ‘em and weep - for the victims on 9/11 who are being dishonored by a government that’s been too incompetent to implement professional, comprehensive and focused security at airports across the nation.

• Point: study after study shows that the screening process isn’t any more effective than before 9/11.

• Point: The TSA was supposed to be a 16,500 person organization. It’s at 65,000 and climbing. It’s become the DMV from Hell.

• Point: there is little or no real scrutiny regarding employees and contractors working out on the ramp at airports. Construction crews… ramp workers … fuelers… suppliers, etc.

• Point: TSA is looking for objects, not security threats. There’s more to airport security than just passengers… What’s the routine security procedure for parking garages? For fuel farms? For the HVAC system? Take a look at any screening point at any large airport – you think those courteous people in blue shirts were hired and trained for such security-awareness and threat mitigation? Not on a bet.

• Point: The TSA is completely reactive. Professional security means you have to think like a professional terrorist. The honchos at the TSA don't think at all. They just react.

- If somebody puts explosives in a shoe, we gotta take our shoes off and put them through a metal detector – which is not designed to find C-4, anyway.

- When somebody sneaks a bomb under their coat and blows up a plane in Russia, the TSA makes us take our coats off.

- The Brits discover a plot involving liquids, the TSA brilliantly decides to limit passengers to as many 3-oz bottles of stuff that'll fit into a 1-quart Glad Bag.

- It makes no never-mind what's in those 3-oz bottles. The TSA honchos are oblivious to the fact that Terrorist "A" can have a couple of bottles of chemical X, and his three buddies go through screening with several more bottles of chemicals Y and Z. All this fun stuff they can then mix in the secure area, enjoying a latte at Starbucks while waiting for their flight to meet the 29 virgins.

It's all more of the sloppy eyewash that the folks at the top of the TSA pass off as making us safer.

• Point: The TSA has no security mitigation or contingency plans at airports. If something goes wrong, their grand plan is to evacuate. What if there is a professional terrorist threat at Terminal A? What is the plan for Terminal B? Who is in command? Are the people drilled? What is the plan for emergency access and egress at each airport – medical, police, etc. – in the event of an attack? TSA ain’t got none.

•  Point: TSA wastes money on more crackpot schemes than a dim-witted “mark” at a rigged Carney game. Remember the “puffer” machines? Millions spent. They didn’t work. The TSA finally had to pay the Department of Defense $600 each to destroy them. And the “full body scanners?” The TSA lied about the effects on the human body. Now there's the "trusted traveler" scheme that has alphabet groups all excited, even though they have no idea how it will really reduce screening time. All these clowns at the top of the TSA do is get suckered by scheme after scheme, and waste billions in the process. And now Obama wants passengers to pay more to keep this mess going.

•  Point: At the top, the TSA is a political organization first, and a security organization third or fourth. The first TSA Administrators were not security experts. (Based on performance, they were also incompetents.) The last one under Bush was a railroad executive. The first tentative appointee by Obama was known to have lied to congress. The current guy is a former cop. Police is enforcement of laws. Security is threat identification and mitigation of potential threats.

What we've seen in the last ten years at the TSA is the equivalent of sending soldiers into battle led by politically-connected orthodontists.

• Point: The current stupid buzz-excuse is that baggage fees are increasing carry on, making security tougher. That is blatant pabulum. But the media has bought it hook, line, and TSA-sinker.

First, the system is designed to screen passengers who are limited to one personal item and one carry-on bag. There is no credible data to show that carry-on is up 50% - that’s more hype from the TSA. But, boy watch those media types paint it to look like passengers are cramming stuff into the screening lines. CBS even reported it as a security threat, making the poor TSA's job harder and, by implication, an excuse for more screening failures.

Whatever increase in carry-on (which, by the way, is what the TSA is there to screen, anyway)  the number of passengers has not increased markedly in the past two years. Pistole told the media that people are also packing bags “more densely." The only thing dense is the folks who accept this jive from the TSA.

• Point: The TSA’s lack of effective security is aided and abetted by travel groups and the airlines – they don’t demand better security when tests show failure. They just don’t want lines. The US Travel Association, for example, has performed on-site PR stunts at airports, decrying carry-on luggage – and has cowardly ignored the fact that the TSA is out of control.

• Point: Effectiveness in security is not mutually exclusive from speed in screening. That is, if the screening is done professionally and is focused on identifying threats, not confiscating 5-oz bottles of Grecian Formula.

• Point: Pure Malarkey: The TSA claims it’s a success because there have been no hijackings since they’ve been on the job. If anybody thinks the TSA is a deterrent to professional terrorists, they’re encouraging just what led us to 9/11: intentionally ignoring the problem. The FAA claimed its security was great, too - until that Tuesday morning when we found out just how negligent Jane Garvey and her merry band of political staff really were. Make no mistake: the track record over the last ten years shows that the TSA isn't much different.

The truth is that we’ve been lucky. With the Gong-Show we've seen in the last ten years, another well-planned attack on aviation would be a snap. No, maybe not kicking down cockpit doors (that's the reactive part of the TSA), but getting things onto an airliner wouldn't take much work.

The reason we’ve not had another attack is for the same reason we didn’t have one before 9/11: Nobody has wanted to try. Terrorists know where we’re vulnerable – and passenger screening isn't the only place.

Passengers Are Not The Only Victims, Either. Final point: There are another approximately 50,000 daily victims of the TSA’s top-level incompetence, a group that nobody seems to recognize. The screeners at over 400 airports across the US. 

In general, the most customer-oriented folks at airports are the ones in the blue shirts. Pay an airline a grand to get to Chicago, and the passenger barely gets a thank you from the carrier's employees. At the screening point, typically the people that have to paw through luggage full of laundry are courteous, thoughtful, and helpful.  

Give it a thought: you think these TSA people realty want to pat down terrified 6-year olds, as Napolitano ordered a few months ago? You don't think they know that some of the rules they are required to enforce are strictly Looney-Tunes? Unlike Janet, they aren’t sleazy politicians. They're honest, hard-working people. But they have to follow the procedures given them. They deserve better. 

Here’s the heresy, and the suck-up network correspondents can take it wherever they want: the TSA ain’t doing the job.

As it stands now, we can look forward to another ten years of PR hype.

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Monday, November 14, 2011

Finally! The Energy Solution: McGrease

Rapture.

That's pretty much what the reporting's been regarding the airline stampede to fly into the bio-fuel skies.

Holy Happy Meal, Batman! We can now see the day when airplanes will be flying around on fuel developed from used cooking oil and other agricultural products! Keep glomming down those french fries, everybody, 'cause that deep-fryer's gonna be a new source of go-juice.

United, Alaska, Virgin Atlantic, and who knows what other carriers are doing the PR-shuffle to show the world that they're on the bio-fuel bandwagon. Yup, the stuff can be mixed with real jet-A, and off we go into the politically correct wild blue yonder. And, it'll reduce "greenhouse gasses," too! Regardless of the fact that any improvement (if you can call it that, and buy into the trendy carbon inquisition) is miniscule on a global basis.

It Burns! So, It's A Geo-Friendly Solution! Only one little problem. Or two, or more. The stuff costs only slightly less than French perfume - reportedly $16 a gallon. Oh, yeah, there's the sourcing issue, too. Some of it comes from agricultural products. Been there, done shafted a lot of people with that. Anybody bother to check the massive unexpected consequences we experienced from the flex fuel ethanol rapture? It takes huge subsidies to make it market-viable, and there are open questions whether it does diddly to improve our dependence on foreign oil. It has less BTUs, so it gets less mileage and we use more of it than pure gasoline. There's also the issue of whether the energy it takes to process ethanol may offset the grand savings in bucks we aren't sending to bejeweled potentates in the Middle East.

Then there's the issue of shifting food production to fuel production - raising the cost of what goes onto the shelves at bodegas in Third World countries. But bio-fuel sounds so, well, environmentally-friendly. Boeing claims in three years, bio-fuels will be a major source of jet fuel. At what cost... and at what level of unintended consequences?  That must be determined.

Yeah, what about getting jet-A from algae, sewage, or sludge? Nice, but just what is the long term supply chain for these sources? How much acreage is needed to get the algae-action to put 30,000 pounds of jet fuel into a 737?

Memo to the media: Just because a jug of used Crisco or the effluent from the local treatment plant can be burned in an JT-9 doesn't mean it's a sudden - or even a long-term - energy panacea.

Oil? It's So Politically Incorrect. Even If It's A Better Option. Yeahbutt, some will say, we gotta look into every possibility. Okay... how 'bout the Keystone Pipeline from Canada that would deliver enormous amounts of new energy to plants in Texas, addressing supply and hiring thousands of people? The Administration just last week put it on hold. Now, instead of funneling this supply to the US, the Canadians are considering shipping it off to China. And meanwhile we're dancing around congratulating each other because we're focusing on trying to make what goes into Pampers go into a fuel tank.

Funny, while the airline industry was busy doing PR-stunts with airplanes powered by $16-a-gallon pond scum, they didn't make a peep over a government plan  to further reduce national supplies of oil.

 Of course not. They might be accused of not being "green."

Nothing wrong with pursuing alternative energy sources. But when it becomes a sacred Jihad, all that gets pursued is a lack of common sense.
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Monday, November 7, 2011

More From The PTA On Steroids:
The EU & Airline Carbon Taxes

Let's see. Greece has gone bust. Italy's finances look like something dreamed up at a Monopoly game in a rural trailer park. Spain's real estate bust has done to their economy the financial equivalent of what Hiroshima experienced in 1945. High level summits to fix the EU's Ponzi-scheme economies degenerate to what look like dysfunctional condo association meetings, with Germany's Merkel and France's Sarkozy trying to do a 21st Century re-make of The Bickersons.

These EU guys have all the credibility of a Cub Scout Troop on a sugar high.

Yessir. It's yet another area where the US seems to be losing global leadership: dimbulb smoke and mirror financial planning. You bet that the folks in Congress are doing their best to regain the lead, but we're just one incompetent legislature and leadership. The EU has the jump in having several, all trying to shift IOUs around between one another.

Give Us Money. We'll Save The Planet. Or Spend It Someplace Else. But now these EU wunderkinds are telling the world that starting January 1, airlines need to pay them money to atone for the sin of alleged damage to the environment due to nasty carbon emissions from airplane engines. See, by taxing airline passengers, it will force airlines to buy planes that emit less carbon. Now, just how much carbon that is, compared to, say, the Thai cement industry, or some industries in other Third World countries, is a question not to be asked.

And for goodness sake, don't ask what these EU people want to do with the money from all these carbon taxes. They don't know, as a matter of fact. They say it will be used to stop "global warming" - but just how, well, don't ask. And global warming, nee climate change, is a sacred doctrine that is never to be questioned. Just as in the mid-1970s, the expert opinion that there was global cooling was not to be questioned, either.

US Airlines Have Validated The EU, Actually. Unfortunately, the US airline industry has stuffed its landing gear in its mouth. The official line is that there is a problem and "something" must be done (facts not in evidence, except to be politically-correct). The correct answer would be determining scientific data to show what the airline "carbon impact" really is on the environment. This hocus-pocus stuff about tonnes per passenger of carbon is nice but it puts nothing in context as to what it means, other than carbon is bad.  In short, the US airline industry opposes what the EU wants to do, but not their reasons for doing it. Intellectually, they're deep in the Stockholm syndrome.

The proper response from the US airline industry to these hobby-lobby EU environmentalists is: justify your aims beyond the mystical belief that 767s are causing polar bears to wear sunglasses. But that would lead to immediate recriminations about greedy airlines, instead of a factual response.

Being environmentally responsible means being intellectually honest. That's a factor too often missed. When anybody questions climate change and human intervention, the response is a mob-like denunciation of the individuals involved. It's the Salem Witch hunt gone global.

That's one reason you won't see gratuitous comments on this site - or anywhere else - about how Boyd Group International is "environmentally responsible" or pursues "sustainable business practices." The fact is that good business inherently includes these factors. To even mention it is akin to claiming "hey we won't cheat you, and we won't dump our trash in the street, either!!" All that stuff means when a consultant puts it on their website is that they want to let the world know that they are true believers, in the hope of pandering for business. Or, worse, they don't want to ask any touchy questions for fear of losing  business.

In the meantime, expect the EU to at least prevail in extorting some money from airlines that really don't want to call the folks in Brussels on their stuff.. Maybe - the Chinese are outraged, and they carry weight. The US airline industry is unfortunately carrying the EU's water - whether they want to admit it or not.

All contents of this website are (c) Copyright 1992-2012, Boyd Group International.
All Rights Reserved.

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