Myths & Realities
Airline Consolidation

Air Service Rationing:
It's Started

Small Community Air Service
Presentation To Senate Commerce
Committee Symposium

What Our Research Indicated
About Southwest In 2006

Missing In Action:
United's TED

No-Frills Airlines
Flying In The Wrong Direction

DOT O&D Data:
Don't Pay For Bad Numbers

Airline Bankruptcy Myths

Rural Air Service:
Rules of Dis-Engagement

Hot Flash Archives
Jan 2007 - April 2007

Hot Flash Archives
Oct-Dec 2006

Hot Flash Archives
Jan-May 2005 

Hot Flash Archives
Through June 2006

The Boyd Group, Inc.
Advisors to the Aviation Industry
Since 1984

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Aviation Insight & Perspectives
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Archives May - August, 2007
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Hot Flash - Monday, August 27, 2007

From The
They-Don't-Hear-Thunder Department

The short answer is no. The long answer is no.

That's pretty much directly what Delta's new CEO stated when asked if he was looking at pursuing a merger with Northwest. He ought to know what can be done, what can't be done, and what won't work in this regard, having been CEO of both airlines.

Things like fleets that have about as much in common as locomotives and street trolleys. Things like the enormous expense of integrating entirely different ops specs, maintenance programs, and pilot seniority assignments. Things like the revenue growth potential for wider cooperation within the current DL/NW/CO and SkyTeam alliances, without the wreckage a merger creates.

But that hasn't stopped the usual-suspects on Wall Street from confidently "predicting" such an event, usually accessorized with some babble about the "great route synergies" a combined DL/NW would represent, and the "billions" in "new value" that would result.

Keep this in mind: a lot of these financial "analysts" speak first, and worry about factual data later. The fact is that a lot of these folks literally have no basic knowledge of how airlines work. They look at a route map and start spouting.

Another trendy bit of Sacred Wall Street Scripture that's also coming up in many of these articles is the unquestioned pronouncement by analysts to the effect, "legacy carriers such as Delta are abandoning domestic routes - which are less profitable - to low cost carriers and are instead expanding into more lucrative international markets..."

That's flat out nonsense. Not within three zip-codes of airline reality. The truth is that carriers such as Delta are not being chased out of any major mainline O&D markets by LCCs. To the contrary, over the last two years, it's been Delta harassing LCCs by tossing in RJs to siphon traffic in a number of markets LCCs have entered. The fact is that Delta, Continental and Northwest have added international flying to feed and strengthen domestic markets, not as a refuge from Southwest. And it's that international feed revenue that gives the comprehensive network airlines an on-board revenue advantage domestically over LCCs.

These blind-leading-the-intellectually-lazy babblings from some (but certainly not all) corners of the Wall Street cognoscenti are more clear indications that a Sealy Posturpedic is a better place for consumers to trust their money than with some of these alleged financial "experts" - many of whom couldn't tell you the difference between a CF-6 and a PT-6.

But do expect this type of misinformation to become more and more of a chorus line in the next few weeks. It will be one of those subjects in media stories that takes on a life of its own, with its validity based mostly on the number of times it gets repeated, not on hard facts or industry knowledge. Lots of times some of the media does no real fact-checking on matters that "everybody" knows, simply because "everybody's" repeating them over and over and over again.

The Flat Earth Society Lives. Just don't take their investment advice too seriously.

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Looking Ahead: The Boyd Group Aviation Forecast Conference
New Heresies - To Be Presented October 14 - 16

We thought we'd outline some of the areas that will be covered at the 12th Annual Boyd Group Conference this October 14-16 in Sarasota.

Air Traffic Growth Trends - Spotty & Disruptive.  The Boyd Group's Airports:USA™ Forecasts indicate that the nation is on track to experience approximately 580 million passenger trips, equating to 712 million enplanements, in 2007. That's 2.7% above last year.

However, closer analysis indicates that much of the growth is based on LCC capacity increases that may not be sustainable in the event of an economic downturn. It is also of concern that some of the 2007 LCC expansion efforts have resulted in fare-based traffic growth that has not necessarily translated into bottom-line profitability.

Factors we'll be covering in the Traffic Forecast Session of the Conference include:

• The effects of economic slowdown on each airline sector.

• The potential of $80 oil & what the aviation industry can expect

• Airport enplanement shifts expected by region

• Continued constriction of rural air service levels & quality

• The increasing importance of general aviation to the economy

• Potential new strategies at LCCs to shore up revenue streams

• The rising revenue bar for small community air service & the dynamics driving it

• The importance of emerging international cross-flows to CNCs

• Fundamental difference between "traffic growth" and "air service growth"

• Identifying new international traffic generation at non-hubsite cities

One disruptive dynamic Airports:USA™ is looking at is the disparate capacity increase between Comprehensive Network Carrier Systems and the LCC sector. The CNC segment has limited additional net new capacity coming on line, while the LCC sector will be looking for markets to place a disturbing number of new 737s/A-320s/E-190s. That means some fare stimulation in some regions, as LCCs claw for market share and look for ways to fill additional 100-seat and larger airliners

We've identified several outcomes of this - including stronger leakage trends within some regions, and we've found a number of potential scenarios where traffic could see sudden declines, as LCCs begin to re-structure their strategies.

We'll be cutting new ground, as usual, and discussing trends other conferences and analysts well be noticing years down the road.

Program Update. We're happy to again confirm that the FAA Administrator, the TSA Administrator, and DOT Secretary Mary Peters will not be attending The Boyd Group Aviation Forecast Conference in Sarasota, October 14-16.

That's for the simple reason that The Boyd Group Conference is an event where new territory is covered. We are not particularly interested in canned speeches that have been repeated over and over at prior Alphabet group conferences.

Questions ATA Should Ask, But Won't. We did however, give serious thought to inviting the outgoing FAA Administrator, with the goal of asking her to answer two simple questions. The first one: since the ATC system is indeed, as she claims, "at the breaking point," yet the (old and outdated) stuff planned in the FAA's alleged NextGen program won't be fully operational for a decade or more, then what exactly does the FAA propose airlines do in the meantime? Cut back? Ration flying?

The second question would be, with the proven track record of the FAA's inability to meet deadlines, why should consumers and the aviation industry give any credibility to the FAA's promises? Both questions are rhetorical.

Free Flight Revisited. The Conference will have a very exciting session that will review new approaches that can, and must be done to address the ATC and avoid the economic hit that is on the near horizon due to a constricted air transportation system. The impact - and the opportunities - for airports, airlines, and suppliers are immense. There are solutions, and they don't involve a decade of more FAA bungling.

Captain Michael Baiada and Mike Boyd will be tag-teaming in a presentation on the applications and potential of a real Free Flight ATC system. NextGen is mostly simply shifting the data links from radar to satellite - good, but as the GAO has noted, upgrades that may be out of date by the time the FAA gets them finally up and running. There are better approaches, but the FAA has not pursued them.

For more information and to join the aviation leaders who make this Conference  a must-attend event, click here.
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(c) 2007 The Boyd Group, Inc. All Rights Reserved

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Hot Flash - Monday, August 20, 2007

Ten Years On The Web

This month marks ten years of AviationPlanning.com. From initially being the perfunctory eye-candy "cyber-brochure" on the firm back in 1997, the site quickly developed into one of the most influential aviation sites on the web, updated with new insights, information, and discussions on aviation issues virtually every week.

We want to thank the quarter-million plus annual visitors for making this website a success, and especially those who from time to time provide us with feedback - both positive and sometimes not so positive.

The New Trendy ATC Fix:
Toss Small Communities Under The Bus

It's like the fashion industry.

Every year there's a new line, a new trend in aviation that "everybody's" accepting as an article of faith. You're not "in" nor "informed" if you're not chanting the latest mantra. Whether it has any factual basis or not isn't important. It's just that everybody's doin' it, and it's snicker and sneer at anybody who's so unfashionable to disagree.

Last year it was "over capacity" and the unquestioned immediate "need and inevitability" for airline consolidation. It was the mantra - there're too many seats, so stand by for all the mergers. It was a certainty that airlines were going to start to act like wildebeests in rutting season. 

Those trends - over-capacity and consolidation - are now passe. There's barely a word about either to be found, 'cause they were last year's aviation fashion trends.

New For '08: The Airport & Airway Crisis. Announcing the new-for-2008 Aviation Media Mantras: The air traffic control system and how small jets are clogging the airways across America. 

Notwithstanding the fact that the ATC system's been a deteriorating mess for the last two decades, it's now "in" as the latest aviation story. Interviews with the FAA Administrator are the thing for up-and-coming reporters. Almost daily there are the reports about how - golly, gee - the ATC system is years behind, and how the poor, beleaguered FAA is the victim of things beyond its control and is working sooooo hard to fix it.

There are companion stories about how terribly crowded the skies are. Stories about how there are just too many airplanes flying around. Stories that make the reader think that the ATC system is just like snowstorms, tornadoes, and earthquakes - it's a natural phenomenon around which the air transportation system must adjust for safety. According to the mantra, ATC's a system that's pretty much not subject to human intervention. We just must accept it. Those record delays and cancellations, according what the FAA is feeding, are simply things that are the natural result of man putting too many airplanes into the sky.

Amazingly, there's little or no recognition of the fact that delays are primarily are due to a failing ATC system - one that is not a natural phenomena, but a mis-managed set of outdated computers, obsolete philosophies, and botched upgrade programs that are now choking our air transportation system. There's little media consideration given to the fact that it's the ATC system that must adjust to the nation's demands, and now that it cannot do so, it is a national disgrace.

The FAA has successfully bamboozled much of the media into not doing any investigative research into the Agency's failure record. Interviews with the FAA Administrator are generally love-ins devoid of any pressing questions, and tend to be PR platforms where the reporter ends up writing a story about how under-funded the agency is, and how hard they're working - regardless of the fact the system's falling behind by the day.

The Emerging Villain: The Small Jet. The nation is paying - and will continue to pay - a very high economic price for this situation, and the bill is starting to come due at smaller airports.

Accessorizing the 2008 Aviation Mantra is the new revelation that it's those "little jets" that are gumming up the skies. The stories vary, but generally they focus on how airlines are insisting on using them to make more money, and since they take up the same airspace as bigger airliners, that's an outrage. It's not a case of what the market demand will bear and support.

See, the foundational belief in many media stories is that the ATC system is what it is, and therefore, it's the air transportation system that must adjust. And if those greedy airlines continue to insist on tossing RJs into O'Hare, or DFW, or - god forbid - LaGuardia, action must be taken to limit their use. (Anybody remember the Aviation Mantra of 1998? That was when the FAA decided to open LGA to almost unlimited RJ access, with the belief that since these were "regional" jets, that would open New York to more service from small airports. Right.)

The Solution: Let Smaller Communities Sing The Blues. So, there's a growing belief that, in light of all the delays, the use of jets under 100 seats must be limited and restricted. It's the Mantra of 2008. Force airlines to use bigger jets and fly'em less frequently. Make consumers in Charleston, Lansing, Fresno, and other small and mid-size communities adjust to the fact that they have no right to the levels of air service their economies need. Certainly not if there are delays. Certainly not if the FAA's ATC system can't handle it - even in light of the fact that the reason is inept management over the past 20 years.

This is not a drill. The FAA really does have a lot of people in the media - and probably in Congress - believing that restrictions in air service are the only solution to reducing delays. Pending, of course, their implementation of YesterdayGen - the upgrade programs that are years behind and will likely stay that way. Heck, if the FAA had been in charge of highways in the 1950s, the Washington Beltway would today be two-lane blacktop.

What this means is that some communities which today generate strong viable air transportation demand are in the crosshairs to lose some air service - maybe more than just some. Already, we've seen Delta cut back ATL service at more than half a dozen small communities. Economics are the reason - regardless of, in some cases, high load factors. The congestion and delays caused by the ATC system raise the economic bar, and since the FAA isn't doing dukey to substantively improve it, plan on airlines looking at doing more cutbacks in the coming months.

But the real danger is the FAA itself and its ill-informed supporters in the media. There have already been suggestions of restricting flights on the basis of airplane size at larger - read: hubsite - airports. As the public outcry about delays is fed by oh-so-outraged politicians and talk show hosts, there's a good chance that the half-knowledge of the subject matter could result in some communities losing more air service access.

For example, if a community has Delta service to CVG, the FAA could try to restrict any under 100-seat access to ORD, on the basis that the community still has connectivity via CVG. Or, prohibiting small jet service to the three main New York airports, allowing them only into Stewart, or Islip, thereby essentially cutting NYC access for many communities.

Don't think for a minute that these types of draconian actions are out of the realm of possibility.

The fact is lost that the ATC system should have been upgraded to accommodate the needs of the nation. The fact has been lost that the current upgrade programs - regardless of who pays - are years away. The fact that any such restrictions being considered are intended to adjust our air transportation system to the incompetence of the FAA is also lost.

But points like that are outside of the new 2008 Aviation Mantra. "Everybody knows" that the system is over-burdened. "Everybody knows" that it's RJs that gum up the system. Therefore, additional, more in-depth investigation or information isn't needed. Just cut flying down to the level that the ATC system can handle, and all will be well. And a lot of smaller cities will find that they don't have the air service access they need.

Targets. We've identified a range of outcomes and scenarios that can be expected at rural airports in regard to the deterioration of the ATC system. There's no question that the response of the FAA - to protect itself - will be shoot first and worry about economic fallout later. As it stands today, the FAA has outwitted most of the media and Congress into believing that the agency is in control and have a plan. They don't.

We'd suggest that communities need to take matters into their own hands. Right now, there's no help on the horizon inside the Beltway. The only focus there is on how to "reauthorize" and fund the same FAA that wants to cut air service to accommodate the ATC system. There is no - zero - focus on nor criticism of the FAA. And that means that there will be no near-term answers coming from Washington.

Within this, our Aviation & Airline Trend Forecast session at The Boyd Group Aviation Forecast Conference will be covering where the fallout may be felt, and what communities and airports need to do to make sure their air service isn't molested as a result of the FAA trying to dumb-down the system to their level.

But make no mistake. As it stands today, air service at small and mid-size airports will be tossed under the bus (or, is it under the RJ?) to adjust for the FAA's failures.

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Gee, That's Not How They Do It In Nogales...

As many as 20,000 passengers were delayed for several hours at LAX, including thousands stranded inside airliners, when the US Customs computers that check incoming international passengers for criminal records went down.

The Customs people were adamant that there was no alternative:

“We just can't take a risk knowing that one bad guy can harm our country significantly,” said U.S. Customs and Border Protection spokesman Mike Fleming.

So we make thousands of passengers sit on inbound flights for hours to stop the potential of that "one bad guy" getting in the country. Meanwhile, Congress and the Administration are content to let thousands of potential "bad guys" stream across the Mexican border without having to be inconvenienced by any computer checks or other scrutiny whatsoever.

But that's politics, don't ya know. Democrats apparently don't want to look uncaring and want to curry favor with certain ethnic groups. Republicans, apparently, want cheap labor - even a Wall Street Journal editorial a few weeks ago warned against the economic consequences of enforcing immigration laws. What was that again about the bad guys?

Yessir, air travel certainly is becoming more and more inconvenient. Come into the country as a ticketed passenger in 12E, holding a valid passport and whatever visa that may be required, and you can find yourself stuck for hours while Customs and the INS monkey around trying to plug in their computers, because passengers must be checked for criminal or terrorist tendencies.

Compare that to the thousands annually who come illegally across the border with Mexico. They have the full expectation that they can hitchhike or pay a coyote to take them to places like Denver and San Francisco, where the moron city councils have declared the cities to be "sanctuaries" that will hide them from any scrutiny or, unlike ticketed, passported passengers trapped on 747s in LAX, any need for a computer check.

With security and immigration systems like these, it isn't just the "bad guys" who're potentially harming our country.

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Hot Flash - Monday, August 13, 2007

Air Service Update
American To Re-Enter SRQ

Starting on December 13, Sarasota-Bradenton will again have access to the American Airlines system, with two daily Eagle flights to Miami. The service will provide omni-directional connectivity to American's global network, with access to Latin America, Europe and the continental US.

The Boyd Group is pleased to have been able to work with SRQ and AA in this successful new addition. If your community is looking for air service results, give us a call at (303) 674-2000. Or, click here for more information on why The Boyd Group is more successful than any other consultant in helping communities build long-term air service programs.

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Facing Realities... The Consumer Really Is Unhappy
Another Hit To The Airline Bottom Line

This past week, the Ninth Circuit Court ruled that once a person enters a sterile area at an airport, he or she is subject to security searches, regardless if they decide to fly or not, and must comply with security regulations.

It would be nice if there was also a ruling that once a person decides to take an airplane trip, he or she is subject to the laws of physics, and is not relieved of the potential of being possibly inconvenienced. Unfortunately, the current din in the media is that when something goes wrong, passengers have the God-given right not to experience discomfort, and when they do, airlines must pay. A Passenger Bill of Rights, it's claimed, will fix everything.

Over the past week-end, a customs computer went on the fritz, resulting in thousands of international passengers to be trapped for hours on airliners at LAX. Because they could not be cleared into the country, they had to be herded into hold areas, and when those were full, other passengers were kept on airplanes for hours. Regardless of the cause of the computer failure, the fact was that the operational and procedural physics of air travel meant that a reported 20,000 people were delayed for hours - many of them stuck on airplanes waiting to get processed.

A Passenger Bill of Rights wouldn't have done diddly to avoid this. The issue is a computer failure. The focus should be on fixing that. And fixing the FAA computers that went down three weeks ago, delaying over 100 flights at CVG. That's where the solutions are, not in passing laws to assure that the passenger in 13E has access to a soda pop while she's stuck in an airliner waiting on the ramp because of such events.

Tumble To It. Air Travel Has Potential For Discomfort. The same occurs with weather. Flights divert. Flights get delayed. Flights get cancelled. And consumers are being misled to believe that in such cases they have the right to be entirely sheltered from any discomfort or inconvenience. Consumers are also being led to believe that such events are entirely the airline industry's fault.

Two weeks ago, a Continental Airlines flight from Venezuela had to divert into Baltimore due to weather at Newark, along with a lot of other airliners. In this case, like at LAX, there were no FIS gates immediately available that could handle an un-cleared international flight. More hours for passengers on an airplane at the end of a long flight, and, voila! there was opportunity for another horror story about airline human bondage that will make inches of newspaper ink, as well as feeding the usual-suspect talk show hosts who'd rather rage on first, and worry about facts second.

Along those lines, an intrepid reporter from the Baltimore Sun jumped on to the BWI flight, writing another rip'em-up expose on how it was yet another example of airlines beating up passengers. Paragraph after paragraph droned on, describing the conditions passengers had to endure. Nothing was covered in any detail on the specific causes of the delay, the factors surrounding the diversion, or the physical issues that led to the event. No, just the human interest stuff about how outraged the passengers were, and the implication that the airline was entirely at fault. And, of course, there was the perfunctory quote from a consumerist gadfly who was about as objective as Osama bin Laden at a Bar Mitzvah. And about as well informed.

Then, way down in the story, well after the average reader was so angry as to be heading out to shoot the nearest airline employee, the article included some statements provided by the carrier. None of them were elaborated on nor investigated by the reporter. No elaboration on the fact that many aircraft were diverted to BWI. Or that the Continental flight was an international arrival that by law required that passengers enter the country on other than the swim-the-Rio-Grande approach. Instead, the article focused on things like how the passengers, once deplaned, were outraged because they were guarded. The legal requirements for this were left out of the story.

Media: Get The Facts - Then We Can Address The Problem. It's instructive that the writer and some of the people quoted in the story referred to the flight as "1669Y" - indicating their depth of knowledge of the airline industry.

The media has a responsibility to make reasonable attempts to learn about the airline business and the circumstances surrounding an event before they put pen to paper, or hot air to microphone, and start making blanket conclusions that any untoward customer service event is one the airline could have avoided. When flights divert, for example, it's not uncommon for there not to be a gate available to deplane passengers. When flights divert, typically the diversion isn't for hours, and is often one that can be lifted quickly. Therefore, going to a gate, even if there is one, may well mean an additional delay in getting folks back on the flight and getting the airplane pushed off the gate and into line for take-off. There's the issue, too, of security. Is there a sterile area sufficient to handle the passengers? In the case of 1669, (no, not 1669Y) the carrier couldn't just pull up some stairs (if there were a set available, and the airplane was in a spot were it was safe to do so) and let the people off, because they had to be processed into the country.

There are major problems with our air transportation system. Events like LAX and the flight at BWI are symptoms. Accurate, in-depth, and professional reporting, instead of amateur emotional stories, could go a long way in addressing those problems. Unfortunately, some in the media see what happened in instances such as the Continental flight, and jump to the conclusion that the solutions are simply a set of stairs, or a sandwich, or an extra roll of toilet paper in the lav.

Better reporters look beyond these things and attempt to identify causes and illuminate where the system broke down, if indeed it did, to cause the event in the first place. Getting quotes of outrage from consumerist Cindy Sheehan wannabes who simply have axes to grind against the airline industry doesn't do anything to get the facts.

The Airline Industry Misses The Point, Too. Regardless of the indignant outrage from some quarters, when planes divert, that doesn't mean that there's always going to be gates, hold space, food, and the staffing available to smoothly handle the situation. That's a fact, but it's not an excuse for really dumb service recovery. And is it absolutely true that airlines don't always think ahead in such cases. It is true that in general airlines tend to operate on automatic - "Diversions? We'll deal with 'em when it happens."  Planning is often a second-thought, regardless of the protestations from the PR department.

Airports and air travel are daunting. It's where consumers are herded around on the basis of rules, regulations, and procedures that must be enforced like a Papal Edict. Sort of like Army boot camp, only you have to buy a ticket to get in. Years ago, airline customer service employees were trained to guide passengers around and through the air travel maze. Today, too often, they are enforcers of the maze. Increasingly, and not in little part due to inflammatory stories like the one on "flight 1669Y," consumers look at the air travel experience with trepidation. That leads to anxiety. And anxiety leads to fear. Fear leads to the Dark Side - a.k.a. really clumsy federal regulations. It's up to the industry to address this, and silly "12-Point programs" are not the answer.

Ticking Off 1 Million Consumers Per Month? Passengers do deserve a travel experience that isn't a cross between gym class and rush hour on Ellis Island.  The hard fact is that the infrastructure cannot meet the demands of the nation any longer. Peter Greenberg, Travel Correspondent at NBC, has noted it clearly. In today's real-world environment of air traffic control delays, ramp congestion, and (at some cities) hubsite airport terminals spread out over a couple of zip codes, a published 50-minute or less connect time needs to be re-considered. In a perfect world, yes. In this one, where we don't have the ATC system we need, it's a recipe for lost luggage, misconnects, and coronaries with people running through terminals when their connecting flight arrives 15 minutes after schedule.

Flight arrivals are now approximating 20% off schedule. (Not just delayed, but off-schedule, because airlines have to add extra minutes to adjust for the ATC mess.)

Put this into perspective. The US generates about 50 million air passengers each month. Let's just figure that only 10% of the people on those late flights are badly inconvenienced. That's 2% of 50 million - or one million customers every month who are ticked off at the airline industry. No industry can afford that.

True, the delays are not caused primarily by the airline industry. True, flights are 80% full, and any cut back in capacity will result in less traffic, not better revenues. True, the costs to the industry of spreading out connecting banks would be enormous.

But this is the business airlines have chosen, and the conditions do not exist to allow as efficient an operation as the nation's air transportation system demands. Unless carriers can find better ways of dynamically managing their operations, the only future is an airline system that cannot grow with the nation's needs.

There's no rabbit coming out of the FAA's hat. The NextGen that is being touted as the solution is nothing more than a collection of the same programs the FAA has been bungling for years, and will continue to bungle for years more. This is the system that airlines are operating within, and there will need to be adjustments from the airline side of the table.

No Bill of Rights Will Reverse The Laws of Physics. Nevertheless, airlines are victims, too. They cannot avoid the ATC system, or weather, or customs computers from flummoxing the system. They have the responsibility to tell passengers exactly that. Bluntly. The Contract of Carriage should include the following: "You are agreeing to get on a big metal tube that we hurl across the sky. You must understand that things like weather, air traffic control, and mechanical problems are possible, and not always under our control.  We'll do all we can to reasonably minimize any inconvenience that may be encountered. However, you as a passenger understand the challenges these conditions can represent, and therefore you bear a portion of the assumed risk and responsibility for the discomfort such factors can sometimes cause..."

Most of the staff of The Boyd Group have been in and have managed airline customer service operations. We've provided customer service training to a number of carriers. We've seen both sides, and there's no doubt that there is a major perception problem that needs to be addressed. If the airline industry won't do it, then that vacuum will be filled quickly by self-appointed consumer crusaders whose only goal is to punish the industry, not improve it.

For some background on the airline service issue, click here. It originally was posted on this site in 2000, but it's still valid today. Unfortunately.

Or click here for a directory of several airline service related issues.

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(c) 2007 The Boyd Group, Inc. All Rights Reserved
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Hot Flash - Monday, August 6, 2007

The Economic Threat Is Real.
The FAA's Incompetence Is Real.
Aviation Industry: Start The Revolution.
Take Matters Into Your Own Hands

Let's put the situation in the proper perspective.

There isn't a single airline CEO who would tolerate doing business with a vendor who consistently fails to deliver goods on time, provides unreliable services that raise the airline's costs, is constantly over-budget, and then tries to cover it up by dishonestly changing deadlines and contract terms.

But that precisely describes what the senior management of the FAA has been doing with the air traffic control system for the past decade. So it's mind-boggling to find airplane seatback pockets stuffed with inflight magazines featuring ghost-written editorials trumpeting how FAA reauthorization is the wonderous key to a new ATC system that will reduce delays and vastly increase the efficiency of air travel.

Based on the clear performance record of the FAA, that simply isn't going to happen.

But the airline industry tolerates this fantasy, to the detriment of its own bottom line and to its customers. What's worse is that this ignores the economic impact to the nation resulting from the constricted, inefficient, and rationed air transportation system caused by the bungling of the FAA.

The Fuel Hammer Is Coming This Fall. The airline industry has known full well that the ATC system was an ever-increasing threat to their bottom lines. Suddenly, with FAA reauthorization in the works, they've got religion, standing up and urging the FAA to continue with a "satellite-based" ATC system. Unfortunately, they're in the Amen Corner of the wrong church. The airline industry knows full well that the "NexGen" system isn't new, and that the FAA isn't going to have any such thing in place system wide in the next decade.

It's also unfortunate with all this posturing, the airline industry may have run out of time. Too many years wasted trusting the FAA to get the job done. Too many years of silly public relations events, lauding the FAA, when, as we told Congress in 1994, CEOs should have been storming the Administrator's office demanding results every time an upgrade program was again delayed.

Today, thirteen years later, airlines not only are working within the same deteriorating ATC system that's draining their coffers, but the results of the ATC system - off-schedule flights, cancellations and service cut-backs - have the public and Congress enraged at the airline industry, not the FAA. Already, one state has passed a stupid, but very angry Passenger "Bill of Rights." Not a word about the ATC system, just about getting those greedy airlines to stop doing bad things.

Now, there's another cost crisis suddenly on the horizon. Tack the $9 billion or so that the ATC system inflicts on the industry to the news that oil prices are heading toward $80 a barrel, up from around $58 earlier this year, and it's back to the trenches for airline management. One might conclude that airline industry front offices would be in the full metal jacket mode, looking at ways to offset the higher jet fuel costs that are going to be percolating down to the airport level this fall.

Unless these cost factors can be offset by a combination of new revenues and higher efficiencies, 2008 could shape up as another near-disaster year for the airline industry, much contrary to what was foreseen just a couple months ago.

There are not many options to get costs down. Labor's tapped out. Staffing levels are anything but fat. Yet the biggest single excess-cost factor in the airline industry today - the estimated $9 billion in waste inflicted by the inefficient air traffic control system - is being side-tracked into silly internecine media battles between airlines and GA.

What those happy-face in-flight magazine editorials tend to gloss over is that, even if the FAA could actually do what they claim (which they've proven they cannot), it will be a decade before the ATC system is "fixed."  The fact is that the US air transportation system does not have the luxury of being able wait that long.

Trendy Reaction - Cut Small Community Service Levels. Because the airline industry has left its future to decisions by the FAA, instead of determining for itself what needs to be done, it may get a number of interim ATC "solutions" forced on it from gadflies in Congress and other self-appointed "experts" from outside the industry.

They will be "solutions" that will immediately hurt small and mid-size airports, and damage the US economy in the long-term. But the goals, remember, of Congress and the consumer wags-without-a-life are to eliminate delays and punish airlines. Having an air transportation system that keeps America globally-competitive simply doesn't have the immediate emotional value as taking shots at those fat cats who force people onto "packed airplanes."

For example, we're already hearing the trendy, easy-solution refrains... "Cut out those little jets flying to those little places. They just gum up the hubs at key times... Better to take care of the big cities, where the real business demands are!" 

Unfortunately, that seems to be what's naturally happening already. Some small and mid-size communities are getting air service pink slips - and the main reason is the new economics represented by an air transportation system that must now adjust to the higher costs and artificial limitations caused by a deteriorating ATC system.

Some "experts" are simply calling for air service to be limited to 80% (or some other random number) of what airports can handle. But what airports can "handle" is constricted by the ATC system. Therefore, the supposition that airlines should fly less and just use bigger airplanes on fewer flights, is amateur and inconsistent with realities of air travel demand. Aside from that being a cowardly surrender to the incompetence of the FAA, these kinds of armchair-expert "solutions" are nothing more than accepting a future where America becomes even less globally-competitive.

The Inept ATC System IS An Economic Hit To The Nation. Today, small and mid-size communities are experiencing an influx of new industry, new high-paying jobs, and new, often international investment. Without viable air service connectivity to the rest of the nation and the world, which is what the FAA's ATC bungling is threatening, this economic growth could be cut off at the knees. A couple of examples of the type of global growth we're seeing in rural America:

• Montgomery: First Hyundai, and now Kia, are putting enormous auto-related factories in the MGM region. Along with them come dozens of second- and third-tier suppliers, all of which generate and need viable air service. Unfortunately, that growth is being threatened by on-going ATC constrictions, particularly at Atlanta. The head of one of the major auto companies has noted that future investment in the region would be closely scrutinized unless reliability, such as delays and mis-connections, at Atlanta were not improved. Lost luggage, and in some cases, disgraceful Third-Worldesque customer service, are just icing on the cake. This illuminates the critical value to the national economy of a viable ATC system that frees the skies. And don't be bamboozled into thinking that the FAA's NextGen is the answer. Fundamentally, it represents the thought process that's got us into this mess in the first place.

• Columbus/Golden Triangle, Mississippi. This region is the poster child for the role of the New South in building America's industrial base. Walk out of the GTR terminal and the sun is almost blotted-out by a steel mill being completed by a Euro/Russian consortium. Depending which way you turn out of the airport, you'll pass either American Eurocopter's factory, or another aerospace manufacturing plant being built.

Not far away, the company that builds Kenworth and Peterbilt trucks is putting in a factory to produce Dutch-designed engines. When completed, the facility will generate demand for over 10,000 net new O&D passengers from around the world, just for training classes alone. That means air service access - east and west - will need to be increased, not choked off by the FAA's continuing inability to do its job in providing an ATC system that meets the nation's needs.

• Erie. This is the center of global locomotive technology, with rail units being shipped across the world. Air service access is critical. But that access is being threatened by air carriers having to take a hard look at what markets make the most sense for the limited and increasingly-valuable ATC capacity they are restricted to. So, even with load factors over 72%, Delta found it necessary to drop Atlanta access. Not a jobs-builder.

The Aviation Industry Can Unite. Or It Can Continue To Get Stomped On. Not having the air transportation system the nation needs is a serious economic threat, yet that's exactly what we're facing. Viable and robust air service connectivity will be critical to assuring that America can compete in a global economy.

But it's not up to the FAA anymore. As we've noted, that Agency has proven conclusively over the past two decades that it is structurally incompetent in regard to managing and upgrading the ATC system. To believe differently is to ignore reality. To continue to "trust" the FAA to get the job done is foolhardy.

Given the mess that the air transportation system has descended into this summer, Marion Blakey should be booed off the podium at AAAE meetings, not lauded like some latter-day Cleopatra stepping off the royal barge. It is time for the airport industry, the airline industry, and general aviation to join together and take matters into their own hands. The FAA's constant excuses over a period of years, and the dishonest "re-benchmarking" deadlines, and negligently "re-defining" ATC errors, all represent incontrovertible  evidence that the FAA in its current structure is not capable of addressing the issue.

Instead of cuddling-up to the FAA Administrator, the aviation industry needs to shed itself of its current Stockholm syndrome, and unilaterally begin to plan the ATC system that's really needed to meet the needs of all aviation sectors in the 21st century.

Forget "NextGen" or whatever the FAA is re-labeling the programs that it's failed implement over the last ten years. The industry can no longer afford to dither with ineffectual and money-wasting joint FAA task forces. No longer can the aviation industry take the senior management of the FAA at its word, because its word cannot be relied upon.

Take It Out Of The FAA's Slippery Hands. Instead, the aviation industry - not the patronage appointees running the FAA - must define the specific type of ATC system that's needed for the future, outline how it will be achieved, and then tell Congress to get it done or tell the American public why they don't have the aviation system it needs. That means the industry must - without the interference of the FAA - define the real capacity requirements, develop real forecasts, investigate various technologies, make cost projections, and prepare an implementation plan. Then, and only then, transmit it to Congress. It's then up to Congress and the Administration to assure that it is implemented.

Sure, some will immediately opine that such an approach won't work. Their intellectual dodge is in ignoring the fact that it's the current FAA approach that doesn't work. The industry can either take this bull by the horns or let the nation's air transportation system continue to get gored by the continuing excuses and non-results the FAA is so well known for.

The fundamental truth that should not be lost in all this is that the FAA in its present form is irrelevant. Irrelevant because the FAA has proven time and again that it cannot get the job done. Passing the project off to incompetents will result in incompetent results. Like we've seen from the senior management of the FAA's ATC program for the last 20 years.

It's time the aviation industry tumbled to reality. Before the FAA's ATC system tumbles our economy.

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Hot Flash - Monday, July 30, 2007

FAA Reauthorization:
Everybody's Lost Sight Of The Objective

Rarely has there been an issue as hotly debated as that of how to fund the FAA.

Tempers are flaring. Hype is flowing. Politicians are being lobbied. Various aviation alphabet groups are working to structure their position on the matter - for, against, on the fence, or just trying to duck stray bullets.

The senior management of the FAA is darting in and out of industry meetings, implying that reauthorization is the new key to having their NextGen (a.k.a. YesterdayGen) program implemented, notwithstanding the fact that it's years late due to their own mismanagement - mismanagement that no reauthorization bill will do anything to correct.

The fight has become so intense, they've all forgotten what the goal was in the first place. All the fight is focused on is simply who gets the bill to pay for a bureaucracy that has proven itself beyond any doubt incapable of spending the money properly, and incapable of managing an ATC upgrade program. Neither the airline industry nor the GA segment is demanding full accountability for how the money will be spent. Demanding results is not in the discussion at all. It's just that neither side wants to pay more.

They're both in for a surprise.

The Airline Position: We're Carrying General Aviation. On one hand, we have the airline industry, which feels that it's bearing most of the cost of the ATC system, while general aviation gets a free ride.

Their point is that "a blip is a blip is a blip" on a radar screen that has to be managed by ATC, whether it's a 747 or the orthodontist pushing the limits of his weekend flying skills in a v-tailed Bonanza. To that end, they have a point. Their ads, however, which depict fat cats sipping champagne on G-Fives at the expense of airline passengers crammed into middle seats, are a bit over the top. GA is a lot more than just executives in $30-million biz-jets.

GA Position: We're Paying Our Share. Folks on the GA side contend, correctly, that the current system has engendered a vibrant general aviation industry that's unrivaled anywhere else in the world, and which has enormous economic impact at communities across the nation, as well as on the US economy as a whole.

To that end, they are correct. Avoiding what's happened in Europe - taxing GA out of the skies by imposing punitive fees - is a paramount objective. But this group has also decided to descend to on-the-fringe advertisements, accusing airlines of wanting yet another big federal bail-out, and discussing airline CEOs getting bonuses that rival the GDP of Bulgaria. It's not only cheap emotion-baiting, but it has no bearing on the issue at hand.

For both sides, sticking closer to the realities would be a better approach. But, as we outline below, joining forces would be the best path, because they aren't each other's enemies. The incompetence at the FAA is a mutual threat they need to counter, and soon. 

Lost In The Heat of Battle: Results. Both sides are passionate. Unfortunately, they've both lost complete sight of the goal. Much to the FAA's delight, the whole debate has degenerated into the equivalent of arguing over who's going to pay the bar tab on the Titanic.

Regardless of who's paying, the ATC system is going down. Regardless of how the bill is split, the FAA will still get away with excuses as to why the ATC system is years late and millions over budget. That not a just a prediction. It's a description of the FAA's approach to ATC over the past 20 years.

Everybody's arguing over fees. Nobody, it seems, is too concerned with how the money will be spent. Nobody, it seems, is concerned about the fact that our ATC system today is a mess, and it's the mismanagement at the highest levels at the FAA that's responsible.  Nobody, it seems, has had the guts to ask Marion Blakey why.

Both the airline industry and GA are living in a dream world, assuming that a) if they win, they'll pay less, or at least not more than they do today, b) the FAA will use the dough to fix the skies, and c) the senior management of the FAA has a new plan to accomplish that goal.

All three of those points are outright false, and both GA and the airline industry should stop deluding themselves - the one core problem is lack of accountability at the FAA, not funding. 

Whoever Pays, The FAA Will Just Continue To Squander The Money. First, the FAA's hodge-podge upgrade program, now magically named "NexGen," is something that the FAA has proven itself incapable of implementing. They are, however, masters of the media sleight-of-hand, which never fails to succeed in diverting attention from reality. The FAA's PR stunts continue like a never-ending three ring circus, and nobody, it seems, wants to criticize the stumbling performances of clowns involved.

For the latest example, the FAA Administrator and her staff glittered into Oshkosh like a dancing-bear act to show off the great progress they've made. Then, carefully orchestrated, and with media cameras rolling merrily, she demonstrated the wonders of the "new" ADS-B system to the oohs and ahs of all in attendance. By 2014, she noted, ADS-B would be unclogging the skies of America.

That's seven years away. Left out of the show, and not mentioned by the FAA nor by any of the media in attendance, is the fact that the ADS-B project was originally to be in place by 2001.

Yup. Six years ago, and all we have to show for it today is some implementation in Alaska and, soon, over the Gulf of Mexico. Last year the estimate for full implementation was 2012. Now, it's 2014. Nothing like a moving target. And the FAA Administrator claims that their "NextGen" upgrade program, of which ADS-B is a part, is on track. And that track is going directly to nowhere.

What's amazing is that this silly burlesque from the FAA Administrator and her travelin' show took place at the Mecca-meeting of general aviation, and in front of the aviation segment that has the greatest fear of being gouged into zero-growth by some of the reauthorization proposals now in play. Yet nobody stood up and told her and the rest of her performing troupe that it was outrageous that ADS-B was a dozen years behind, and that any increase in fees must be accompanied by strict accountability in meeting deadlines and budgets. But at the official levels, GA is sitting like deer in an A-380's landing lights, just ready to get splattered into runway kill.

Then we have the airline industry, which is suffering at least an $8-$9 billion cost hit every year due to the failure of the FAA to properly upgrade and manage the ATC system. Their solution? Just make GA pay more, airlines pay less, and things will be fine. Sure, just as fine as it's been for the past decade of declining efficiency and increasing constriction in the skies.

Divide, Conquer. And Continue To Produce Non-Results. The senior management of the FAA has succeeded brilliantly in manipulating the situation. They've convinced the nation that they have a solution ready (they don't), and they have the public and the media swallowing the jive that delays, cancellations and constricted skies are all the fault of not having the money to pursue the necessary solutions (which is blatantly untrue.)

But most brilliantly, the FAA has succeeded in dividing its adversaries - getting the airline industry and general aviation at each other's throats like a couple of two-bit Iraqi warlords, instead of recognizing that the FAA is their common enemy. As of now, the public views the FAA as the good guys, when in reality, they're the ones most responsible for inflicting airline delays and cancellations on the US public.

Meanwhile, the airline industry is being hammered from all sides, taking the hit for delays, cancellations, and supposedly treating passengers like dirt on a consistent, planned basis. General aviation can't expect much sympathy, either. After all, the images of GA are rich folks flying or riding in their private jets, gumming up the oh-so-crowed skies and making the FAA's life harder.

Aviation Industry Solution: Cooperate, Consolidate, And Counter-Attack. While there needs to be some re-structuring of aviation fees, that process need not be one that torpedoes either the airline industry or GA. These two segments are co-victims of the FAA, and they need to sit down, sign an alliance aimed at making sure the skies of American do not degenerate into what's happened in Europe.

Most important to the alliance is standing up, and telling it like it is. Stop the pandering to the FAA. It is the mismanagement at the top of that organization - over the last two decades - that has gotten the nation's aviation system into this mess.

To imply that the current reauthorization debate is one critical to fixing ATC is dishonest - both sides know well what they're dealing with at the top of the FAA, and the current reauthorization debate has nothing to do with changing how the FAA has botched the ATC system. All it will do is continue what's in place today - the same system that "re-benchmarks" programs to mislead the public that they're on track. The same system that is not above mis-reporting errors. The same system that re-defines errors to make the system artificially look good. The same system that won't be one iota more efficient or accountable under the current reauthorization proposals.

Both GA and the airline industry must demand that reauthorization be tied to strict, enforceable goals and performance standards at the FAA. Both can either demand such goals, or they can continue to fight each other, while the FAA's mismanagement continues and gets rewarded.

One thing is certain. The aviation industry is at a crossroads. If they acquiesce to the current system - which is where they're headed now - they will both lose. GA will eventually get squeezed badly, and scheduled air service will, as we have forecast, continue to get "rationed." The decision is in the hands of the airline industry and GA organizations.

They can stand up, or they can continue to let patronage-appointees at the top of the FAA decide their fate and that of our air transportation system. 

____________________

 

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Hot Flash - Monday, July 23, 2007

Bangor Gains Low-Fare Service.

Bangor International Airport will see its first low-fare jet service this fall when Allegiant begins service to Orlando. The Boyd Group is honored to have assisted BGR in its  efforts to recruit the carrier.

One reason that The Boyd Group is more successful than other consultants in crafting air service recruitment programs is the depth of our work in all areas of aviation. Our expertise and our reputation for excellence is well respected in airline front offices. For information on how we can assist your community, click here.
_________________

It's Official: The FAA Is Now Irrelevant To Fixing The ATC System
The FAA Introduces NextFudge

The senior management of the FAA has stumbled on a new strategy to convince the world that they're doing a great job in rebuilding the air traffic control system. It's highly cost-efficient, because it massively reduces the need for new equipment, and it magically improves the performance of the various outdated contraptions they foist on air traffic controllers today. It's a key part of the FAA's NextGen program for the ATC system.

It's called NextFudge.

Don't Fix It. Just Change The Metrics. It's simple: when the numbers or results indicate something that the senior management of the FAA doesn't like, they'll just fudge'em. If there are too many failures, just lower the standards, then when the data comes in, the FAA Administrator can jump in front of Congress and announce the great progress that's being made.  If there are errors, just attribute 'em to something else. The slop, the failures, and the poor performance are covered up by adjusting the metrics, not fixing the system. That's a whole lot cheaper than actually doing the work and spending the money on something that might actually meet the needs of the US air transportation system.

NextFudge is a cornerstone of the FAA's much bally-hooed NextGen ATC program. And, like NextGen, it's a dishonest fraud.

NextFudge is in full swing and it's working wonderfully - for the FAA, but not for aviation safety. First we had the "re-benchmarking" of upgrade programs for the air traffic control system, where years-behind projects were suddenly trumpeted as being "on-track" by the FAA. Fudgeroo, and the media and congress have swallowed it like a live goldfish at a drunken fraternity party.

Then we had the revelation that the FAA management at DFW were intentionally hiding ATC errors by mis-categorizing them as pilot errors. It wouldn't look good to have the public know that the FAA's failures compromised safety, so they changed the paperwork to blame airlines. Fudgeroo. A little lyin' here and there won't hurt anybody, right?

Now, Dallas Morning News reporter Katie Fairbank has discovered that the FAA is moving the NextFudge program to a higher level. In the FAA's ongoing efforts to bamboozle the public as well as the gullible congresspeople who supposedly are overseeing the agency, we have yet another data-stunt. It's called "re-definition."

Like re-benchmarking, the concept is brilliantly simple - when something goes wrong, just change the nomenclature of the event - i.e., just say it didn't really happen. In this case, it's separation errors. Until last month, incidents when aircraft got closer together than allowed by FAA standards were categorized - logically - as an "error."  But, based on the FAA's own numbers - which may well be understated, in light of the DFW experience where the FAA doctored error data - there were over 1,100 separation incursion errors in 2006.

Much too high. So now they're going to improve the system, and, in their minds, aviation safety, by re-categorizing "minor" separation errors as not being errors at all, but as "proximity events." In that one flick of the pen, reported separation errors in 2007 will be reduced by around 30%. A massive improvement in FAA performance! Fudgeroo again. And at no cost to the taxpayer. Unless one considers safety a cost.

Fudging Has A Price - In Reduced Air Safety. But it's all smoke and mirrors. The skies are not safer. Separation incursion errors are not reduced. It's just that the FAA will make the decision not to report a lot of them as errors. The beauty is that FAA management will make that call, so, if there are an undue number in any one month, voila!, re-define a bunch of them as "proximity events" - they don't even use the word "separation." They claim that this will allow the Agency to concentrate on the "big" errors, but apparently lack of management integrity isn't one of them.

"We think that this is a quantum leap forward," was the statement from the FAA official in charge of oversight, no less, of ATC system performance. In terms of outright corruption and official dishonesty, he's right on the mark. But keep in mind that this statement is from the Agency which defines any event where nobody's killed as one where "safety was never compromised." Regardless.

An official with the union representing air traffic controllers commented, "Changing numbers around to try and show the system is safe doesn't mean the system is safe." It's pretty clear that he and his union are devoid of modern creative thinking. They probably still think 2+2=4, or that there should be some standard of right and wrong in the front offices of the FAA. They're obviously delusional, and are completely missing the wonders of living in a NextGen world.

FAA: Now Irrelevant To ATC Improvement. As we're going to cover at the 12th Annual Boyd Group Aviation Forecast Conference, the FAA is now totally irrelevant to the process of assuring that the United States has the ATC system it needs for the future.

Irrelevant - because it's been proven beyond any doubt that the FAA cannot, will not, and has not the integrity to take on the task.They doctor numbers. They re-classify errors. They have a "NextGen" program that is the same set of projects that are years behind and which have been proven by experience to be undertakings that the FAA is not able to implement.

Therefore, the FAA is not a factor in ATC improvement. To that goal, they are irrelevant.

Airlines: Leave The Stockholm Syndrome Behind. The hard reality is that the airline and aviation industries now have the ball in their court. There are processes that the airline industry can implement (sorry, your "continuous improvement task forces" have not considered all options) to tighten up operations and adjust to the fact that the skies are and will continue to be ineptly managed.

This is a new environment, and the old one, which subjected the industry to be a hostage to FAA mismanagement, cannot be allowed to continue. Airlines need to adjust their entire operations to fit within the ATC system realities. That means doing things differently, and changing the directional roles of the carrier, the PIC, and the FAA, in flight planning.

There Are Options. And The Airline Industry Better Pursue Them. Solutions are not going to be coming from the FAA, or any other agency which will stoop to doctoring data to cover up failures. So, we'd suggest coming to the Conference and hearing a no-holds barred presentation and subsequent discussion with Captain Michael Baiada, an expert in futurist ATC, and the real father of the concept of Free Flight. Click here for more details on the Conference.

In the meantime, relax. The FAA's making the numbers safer.

But not the skies.

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(c) 2007 The Boyd Group, All Rights Reserved.

Hot Flash - Monday, July 16, 2007

Too Late Now. We're Cutting Back To Accommodate Incompetence
Rural Air Service: Rationing Begins
Small Communities: Stand Up Or Get Zapped

The news is out.

Airline delays are at record highs! Cancellations are rampant! Passengers are getting stuck in sweaty terminals for hours or even days, waiting for the next flight! Flights are jammed, cramming passengers like sardines into airplanes! DOT complaints are going through the roof!

The media frenzy is at its peak. After zero deliberation, the verdict is in: airlines are guilty of consumer abuse. Their insatiable thirst for quick profits is driving them to cram too many airplanes into the skies of America, causing back-ups all across the country.

We have "delays" - and that's all that's necessary for a few in the media to feed into the TelePrompTer for the lead-in for the 6PM news. Why, how, and what the solution is, are not considered.

Something must be done!  As will be outlined shortly, that "something" is going to hit home hard at smaller communities - and it's already started. But the issue needs to be framed properly.

Short On Facts. But Lots of Fun Stories. Almost daily, there are media stories recounting the "skyrocketing" complaints regarding airline service. (Comparing the actual number to the volume of passengers is beyond the ability of most of these reporters, by the way. Do the math. If GM had a defect rate that low, they might even sell some cars.)

Then there are the perfunctory interviews with the usual consumer gadfly morons, recounting how airlines routinely keep people trapped in airplanes for hours on end, implying that this is happening daily, and can always be avoided. Feckless, pandering politicians call for Bills of Rights, without a clue as to what really is going on.

One enraged talk show host compared airlines to Big Oil, and has called for the FAA to investigate airline scheduling practices. Great. He must have done at least 30 seconds of research before coming up with that brilliant idea. The fact that it's the FAA itself that is a foundational cause of most airline delays is not one the guy would want to consider. That would widen the issue and maybe threaten the easy storyline that airlines are the evil dragon that's being bravely challenged. Better to be populist, and play to emotions - higher ratings, don't ya know. And anybody who dares disagree will be accused of being a running dog for the evil airline cabals, facts notwithstanding.

But behind all this hysteria is one real fact: the air transportation system really is in trouble. Off-schedule operations are up. Cancellations are up. Block times need to be scheduled to accommodate longer flight times. Connect times at hubsites need to be widened, reducing utilization. "Congestion" is an issue at major hubsite airports.

Some have claimed that there are too many airplanes in the sky. They are wrong. We have too little air traffic control infrastructure to efficiently handle the natural demand generated by our economy. It's not too many airplanes when the industry's running at 80%. (And the folks who glibly declare that the easy solution is just flying bigger and fewer airplanes, immediately cash themselves out of the game. Right, replace all that service at Montgomery with one 747 a day. That's more ignorance along the same lines as the news guy who called for the FAA to investigate airline scheduling.)

FAA Bungling: Irresistible Force. Air Service: A Very Movable Object. But there is one hard fact that, whether we like it or not, must be accepted. The FAA is nowhere near implementing an ATC system that is anywhere near the needs of the air transportation system. And Congress, the airline industry, and aviation alphabet groups are not doing much about it - beyond squawking and making promises to "work with the FAA" on "solutions." The same FAA that's still monkeying around with the same late upgrade programs for the past decade. "Solutions" are the airline side of the table. The FAA doesn't have any.

So, if the ATC system isn't going to increase capacity (which it is not), that means that the nation's air transportation system must adjust to what the ATC system can handle. Guess what that means.

ATC Incompetence First. The US Economy Second. So, the conclusion is inescapable: if all these nasty delays and cancellations and passenger-trapping are to be fixed in the near term, the US air transportation system must begin to adjust downward to the incompetently-managed air traffic control system. Regardless of the needs of the nation, and regardless of the economic hit involved in constricting air service, we have too many airplanes in the sky for the FAA's outdated, deteriorating, mis-managed ATC system to handle, and since that system won't be fixed anytime soon, some service must be pulled down.

Forget the fact that the system's load factors are now 80% or above - which means virtually full. Because the "delays" must be eliminated, according to the hysteria, there is only one option: less flying. And because flights are full because of strong demand, that means fewer seats available and higher fares. The new game will be highest and best use of the unnaturally-limited ATC capabilities - which means smaller communities will get hit first and worst. It's already starting, quietly along the margins of the air transportation system. A number of small and mid-size airports are getting unpleasant news this month.

View of FAA Management: Congress Is A Pack of Gullible Fools. This trend is unfortunate, because there're enough reports, events, evidence and facts to clearly show that the air transportation system is in crisis for one main reason: the senior management of the FAA has proven that it couldn't properly open a box of Cracker Jacks, let alone implement complex and timely upgrades to the ATC system.

Examples abound. A few weeks ago, the FAA's old flight planning computers went on the fritz, turning airports along the East Coast into winged gulags with ground stops. WNBC in New York investigated and found that new replacement computers were delivered to the FAA two years ago. The FAA's bungling senior management hasn't yet figured out how to get them installed and working. Maybe in 2008, they say. So, by then they'll be installing computers with three-year old technology, getting a real jump on obsolescence.

This is not an isolated example of the reason that the USA is facing air service rationing: the senior management of the FAA has no accountability for results. Worse, Congress thinks that the situation is just fine. Nobody in the FAA has any reason to worry about being fired for incompetence.

This was again demonstrated recently, when FAA Administrator Marion Blakey testified to Congress, delivering a giant load of dishonest yogurt that the pols swallowed hook-line-and-sinker. She boldly stated:

"If we're unable to have a financing reform bill in place. . .the delays and the missed connections and the headlines are only going to get worse--much worse. Without a reliable funding stream, the NextGen program will start to slow down, and when the bow wave of delays hits, it'll be too late."

This is like Paris Hilton calling for an end to bimboism.

Say what? The NextGen program will start to slow down? In light of the fact that most of these programs involved are substantially delayed already, to make this statement is to imply what's not true. In short, it is a lie. Funding isn't the issue. Inability to manage and produce results are the core problems.

Accepting It Means Supporting It. As long as the airline and airport industries accept this lack of integrity, they set themselves up for nasty and unfair criticism. Airlines have a difficult time telling consumers that the majority of delays are not their fault, when the airline industry itself has by and large accepted the FAA's incompetence. The airport industry forfeits its moral position to complain about loss of air service at smaller communities caused by ATC limitations, simply because it has not come forcefully out demanding results in light of the FAA's continued failures. If these industries go along with the smokescreen put out by the FAA Administrator, saying nothing, they have to take the responsibility for the consequences.

Here's a flash: the current FAA reauthorization debate is only about how the bill is split up. It's not about more money - which the FAA over the past 20 years has found innovative ways to waste. It's simply about where the current revenue stream will come from. But the projects the FAA is dishonestly passing off as being "on track" and needing funding are virtually all over cost and well behind planned schedule. Some a dozen years or more.

This FAA "NexGen" scam should be enough to have any lawmaker with a modicum of integrity call for the FAA Administrator's immediate resignation or removal from office.

"NexGen" is dishonest because the FAA's senior management is trying to imply that they've come up with a new, satellite-based system that's the magic fix to delays. The truth is that "NextGen" is a PR stunt to describe the same upgrade programs the FAA has been stumbling with for the past five years.

Congress, however, isn't interested. All they do is go through their own unique version of Kabuki Theater, a.k.a. Congressional hearings (definition: events where speeches are made that say nothing, and nobody listens, anyway). Quite the show: The FAA Administrator parades in with her minions, reads a prepared statement, answers a few softball questions by dodging facts, and then leaves, usually to the sickeningly-sycophant compliments and thanks expressed by the chairman of whatever sub-committee called the meeting.

Then the munchkin staffers of the various politicians rush into the hallway, trying get in a good word with the departing Administrator for that discretionary funding request for the local airport's new taxiway, or overlay, or tank farm, or whatever. ATC failures? Who cares?

The upshot: nothing happens, and the incompetent system that's choking air transportation, hurting economies of communities, and, yes, trapping passengers on airplanes, continues with the de facto blessing of the same congressional inhabitants who never hesitate to decry how the airline industry is a mis-managed mess.

Airlines Have No Choice. Cutbacks In Service Are Coming. The enormous excess costs inflicted on the airline industry by the FAA's out-of-date ATC system are now starting to come home to roost on Main Street, USA. Small town Main Street, that is.

Because the ATC system cannot handle the demand, capacity is restricted. That means the available capacity becomes more valuable. That means that the economic bar to air service is going up - way up. Small communities are starting to find that previously-viable air service may no longer provide sufficient return, based on higher costs and the declining ability of the FAA's ATC system to handle the nation's needs reliably.

So, some markets that worked in the past, - particularly those operated by RJs - may no longer work in the future. It's already started. Binghamton, New York, is losing Delta service to JFK and Atlanta - the net return on the flights has been eclipsed by the burdens of a declining ATC system. Erie is losing ATL service - not because of traffic, but due to the comparative return requirements within the new capacity constrictions of the ATC system. Newburgh, New York is losing service from the American Airlines system. Nonstops to Chicago are going away - even with an 80% load factor. The limitations caused by ATC congestion - extra flying and the potential for airport delays - have brought the term "highest and best use" home to the Lower Hudson Valley.

It also means that some smaller communities that once had a chance of attracting new service may as well howl at the moon. It's not coming.

Soapbox Reactions. Not Results. This isn't to say that we're not hearing from Congress about this. Yes, indeed, we are. Just this week, Senator Schumer of New York made public his oh-so-outraged missive to the Chairman of Delta, demanding that flights be reinstated at Binghamton. It's to the Senator's credit he stepped up the the plate, but he went to the wrong stadium. Note that the good Senator said nothing about the costs, restrictions and capacity limitations inflicted by the declining ATC system, and their effects on the ability of places such as the Southern Tier of New York State to support air service. Not to be left out, plan on Hillary jumping into the fray this week, too - with not much more intellectual impact than Schumer did.

Air Service Pink Slips.  More small and mid-size communities across the nation will be seeing announcements of service cut-backs in the months ahead. Plan on it. Add to that the increasing calls to get "those little RJs" out of the system - regardless of the fact that they are the current life lines for smaller communities' access to the air transportation system. While the 50-seat RJ fleets will continue to decline simply for operational cost reasons, the ATC mess is likely to accelerate the process, and result in a smaller long-term RJ residual fleet in operation. Not good.

But, in an environment where the nation must dumb-down demand to the negligence of FAA's ATC management, restricting RJs at major airports may be an eventual necessity. That will do wonders for the local economies at places such as Lansing, Kalamazoo, and Grand Rapids. (Note to Michigan DOT: Add another lane to I-94 and I-96 to accommodate the leakage to Detroit Metro.)

Memo To The Airline Industry: You Knew It Was A Snake... The pundits in the media who rant about how delays and cancellations are all the airlines fault are not completely wrong. Aside from the fact the industry has avoided aiming any of criticism at the FAA, they have known and seen this coming for years. It isn't any surprise.

In 1994, our study, "Free Flight - The Economic Impact" was published jointly by The Boyd Group and RMB Associates. It outlined the enormous financial burden imposed on the airline industry and its customers by the ATC system, including references to internal studies done by United and American which - way back then - found the hit to be around $500,000,000 annually to each carrier. We outlined how a fully-functional Free Flight system could be implemented, and within a fraction of what the FAA was then projecting.

But not one airline CEO stood up and demanded change at the FAA. Go along to get along, seemed to be the strategy. Months later, in a ridiculous photo-op, group of them posed with Bill Clinton, announcing yet another born-dead and brain-dead joint FAA/airline industry committee intended to end delays once and for all. But nothing changed. The ATC system continued to deteriorate. Now, when the media, consumers, and Schumer-esque politicians are screaming for airline blood, the airline industry is finally beginning to scream about the ATC system. That's the good news.

The bad news is that they're again playing the system, instead of demanding it be replaced. Airlines are pandering to Congress and the current FAA management to fix ATC, which is like asking the Five Families to fix the problem of organized crime. Until and unless the airline industry takes off the gloves, stops playing politics, and demands change at the FAA, there will be no improvement in delay and cancellation performance. Regardless of how the FAA's funded.

Forget Recruitment. For Some Airports, It's Now Air Service Retention. We are entering a new dimension in air service. Airline systems are going to be re-evaluating the financial performance of markets through the lens of limited ATC capacity. This means that for smaller communities, attracting new air service will become in some cases secondary to vigorously trying to hang on to what's already in place.

But neither the airline industry nor the airport industry can claim they didn't see it coming. And now, it's arrived.

Imperative: Cities Need To Educate Their Congressional Reps. This is not a drill. It's here, and it is real, and it is going to get worse. Small communities and mid-size communities are on their own. The Washington alphabet groups are not in a position to do much except play ball with the FAA. Heck, the AAAE is a major vendor to the federal government, so it's real unlikely they're in any position to take shots at a major source of their income.

So, the recommendation is that small airports and communities take the ball and run. Make sure that local congressional representatives are fully briefed on the ATC crisis. Don't expect them to