Monday Insight – May 17, 2021

Air Traffic Growth Trends:

Don’t Misread The Clouds on The Horizon.
Expansion’s Coming. But Just Not Where Traditionally Expected.

As of today, it appears that capacity in June will likely be around 80% of that in the same month of 2019.

As the CCP-Covid pandemic continues to recede (or, at least until the incredible, unfocused political hype surrounding it runs out of steam) it is natural to find consumers going back to leisure travel.

But amid all the media stories about the crowds and “surge” expected this summer, it’s still a spike off of a materially lower travel base. The economy has changed. Therefore, the role and location and applications of air transportation will change also.

To be clear, the increase in capacity does not necessarily mean a corresponding increase in enplanements. Allegiant in April had the majority of its fleet back in the skies, but with a reported 60% load factor. They are planning for the future.

The only real unknown is the level to which business travel will return. Some are predicting that it will be at or near 2019 levels. This, unfortunately, ignores the fact that electronic communication was already eating into the value of air travel as a business channel. The CCP-Covid episode served to shove it into overdrive.

The Value of Business Travel Has Changed. One bottom line that tends to be missed in such projections is that, simply put, a substantial portion of business travel was undertaken because there were no other communication modalities that allowed people to meet, confer, and exchange ideas face to face. Now, there are alternatives superior in efficiency and cost – virtual meetings – and the CCP pandemic has established them front and center.

Other Clouds on The Air Transportation Horizon –Beyond the current snap back in traffic, a longer view for the airline industry may not be particularly comforting, unless it is viewed in the context of the new role of air travel as a communication channel. There are some serious issues – troubling issues – but the emerging shift in the geographic make up of the U.S. industrial and business base will deliver some surprising growth in some surprising regions.

But, let’s reach out and touch a couple of storm clouds.

Higher Fuel Costs. The Colonial Pipeline security fiasco has sent a strong message in regard to fuel costs based on current distribution channels. (Yes, it was a security failure, conceptually like 9/11, but without violence.) The supply system is vulnerable and fragile, and airlines will need to re-think fuel logistics to some degree.

Moonbeam Energy Planning. It needs to be stated. There are a phalanx of misguided, trendy policies coming out of Washington, which are guaranteed to spike the cost of jet-A, not to mention all forms of energy. The shutdown of the Keystone pipeline construction (particularly after the distribution vulnerabilities demonstrated by the Colonial affair) is not sound future planning. It’s part of a playbook that’s not going to get the USA over the goal line.

There is an open and clear attack on the programs that made the USA energy-independent for the first time in over half a century. In their place are schemes that encourage use of “alternative” and supposedly “sustainable” sources of energy, such as battery-electric options. The fact is that while there are no emissions from the tail pipes, that electric automobile or electric push-tug is the end product of a total system that is neither ecologically clean nor “sustainable.”

(We cover that point in the latest Aviation Unscripted video. Click at the end of the Insight to go there. True heresy.)

The Economy – Signs Are Not Going In The Right Direction. While the stock market may be bubbling along, a number of the indicators that affect how consumers use air travel can be taken as warning signals. Consumer confidence – a harbinger of air travel demand – plunged last month. Inflation – and media stories about inflation – are also front and center. At this point, the majority of consumer-related factors that support air service are in question, based on traditional metrics and planning methodologies. They no longer fully apply to the emerging, post CCP-Covid economy in the USA.

But There Is A Recovery – Regional & Focused. What our Airports:USA® forecasts are now indicating is actually strong redistribution of air service demand. Mid-size and even some smaller cities, particularly those with strong and growing economic foundations and a high quality of life, will be experiencing air travel growth, in some cases enormous growth.

We are not – repeat, not – referring to the lucky airports that see ULCC service enter. This type of traffic is separate and parallel to the economic-generated demand that will be accessed by the major network and semi-network carriers.

As we noted in our March 3 Aviation Unscripted video, there is now a migration of businesses seeking new venues. They are escaping to regions that do not demonstrate the major challenges seen last summer – and continuing today – at many major metro centers. We’d note that several weeks later, the Wall Street Journal came to similar conclusions.

It’s not a re-make of Exodus – there’s no economic Moses involved, and the Interstates aren’t choked with moving vans escaping New York City and other big metros. But it’s enough migration to deliver strong traffic demand to places like Boise, Colorado Springs, Ithaca, and the like. And, it’s not in future tense. It’s happening now.

We cover this dynamic literally on a daily basis with Airports:USA®. We’ll be soon sending out information regarding our new forecast subscription programs for airports and communities.

It’s a tool that until now, simply wasn’t available.

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And As For Believing The Consensus...

Again – we’re being told that if there’s no CO2 coming out of the tailpipe, that means all is green and “sustainable.”

Not necessarily so.

If you have not yet seen our Aviation Unscripted video on the subject, you may want to take a look. Over the decades, the powers-that-be, the media, and lots of groupie-like gadflies have periodically fed us official dogma about the latest unquestioned future trends.

Remember in the 1950s, for example it was the wonders of the atom that would change the world?

Today, there’s another whole set of future solutions, none of which should ever be questioned. But here’s a tidbit. All that electric ground equipment that airports are snapping up – the ones that have no emissions out of the tailpipe – are in a Colonial Pipeline-like danger. The supply that makes them move has a distantly similar vulnerability.

Oh, and this stuff about this equipment representing “sustainability” and green propulsion isn’t entirely accurate, at least in the total process of getting that tug to gate 23.

Click here for the video.

Monday Insight – May 10, 2021

Summer Traffic Spike – It’s Restructuring. Not Recovery To Pre-CCP-Covid.

We’ve noted in the latest Touch & Go newsletter sent to our clients & friends that the now-in-progress spike in air passenger growth may be only a bubble on the way to a new role for air transportation in the USA.

Comparing 2021 Planned Capacity To 2019… As of today, the airline industry has not yet fully adjusted the schedule patterns for July and August… plus, it is highly optimistic that September will remain at 8% more seats offered than in 2019.

Clouds On The Horizon. It is logical to accept that June will be in the @80% range of what was offered in 2019. July, too. However, it is really optimistic to project that air traffic volumes will exceed 2019 by the 4th quarter.

First, business traffic most likely will see no rebound to the pre-CCP-Covid levels. How much it will rebound will depend on the fundamental changes in the basic foundation of business communication systems that have been experienced in the last 12 months.

Second, it is an open question regarding the drivers of the summer travel spike. It may be a bubble of demand, or it may be the indication that in the future leisure demand will be a larger percentage of revenue opportunities for the airline industry. That would indicate more vulnerability to economic shifts that affect disposable income and investment income.

Finally, air travel is entirely dependent on available dollars – both personal and business. That’s factor which apparently nobody wants to consider right now.

Planed Economic Policies Are Not Encouraging. Let’s state the facts: The economic view from 30,000 feet up isn’t real encouraging. Virtually every economic policy coming out of Washington is based on wealth reduction (taxes) or wealth suppression (social experiments that deter free and open discussion of issues and are openly aimed at reduction in commerce.)  Then there are open trendy attacks on supply of fuel – prohibiting exploration and closing pipeline projects will only make travel – and the cost of living – more expensive.

This stuff does not encourage travel spending – particularly when higher taxes will ultimately eat up discretionary spending – regardless of usual political promises to the contrary.

It is understood that these conclusions might be politically incorrect, but it’s what’s on the table and it is clear and obvious.

The next four weeks will be very interesting – if bookings remain strong for post-Labor Day travel that will determine how rapidly we will attain “full” enplanements – this being air passenger traffic that the new economy will support.

Stay tuned.

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Another Sacred Tome Questioned

There is an increasing number of political and social areas that unfortunately are being relegated to the “not to be questioned” category, for fear of being pilloried or burned at the stake of consensus thinking.

There are things we mere mortals must not question for fear of being publicly exposed as a socially dangerous heretic.

In the early 1950s, “everybody knew” that atomic power and nuclear energy would deliver incredible economic benefits… nearly free electrical power… nearly free heat in cold regions… all sorts of magic. It was the dogma.

It even extended to official and nonsensical malarkey regarding the ease avoiding the dangers in the event of nuclear attack. Folks who attended grade school in the 1950s can remember “duck and cover” exercises in the classroom. Simple. If you see a nuclear flash, kids, just duck under your desk. And, if you’re outside, just cover yourself with anything – even a newspaper – to be safe.

Not kidding. The government actually produced cutesy public service announcement films about this stuff. Atomic power was the unquestioned future, and indeed a copy of the financial section of the New York Times was sufficient to ward off being turned into a crispy critter if the Commies attacked.

‘Course, in the case of a real nuclear attack this would likely delay your journey to the Pearly Gates by at least two to three milliseconds.

Today, we still have a range of sacred dogmas that are not to be questioned. Those who do so are immediately and confidently attacked as “non-believers” or worse. The masses are tacitly instructed to do so, automatically.

Okay. We’ve now stepped over the line, and possibly stepped into a pile of accepted dogma.

Last week’s Aviation Unscripted has dared to discuss the concept of “sustainability” in regard to at least one accepted “green” approach to the future. The reality is that some of the accepted “green” alternatives are anything but – and are socially damaging.

We included this in our last Touch & Go, so if you missed it there click here to take a factual gander at one “accepted” green solution that is anything but.

If you haven’t viewed it, click here. 

Leadership means questioning the norm. That’s not what’s going on with a lot of “sustainability” assumptions.

 

 

Monday Insight – May 3, 2021

 The Airports:USA™ Forecast Update

The Next 24 Months Will Be Airline-Driven – Internally

It is very uncertain regarding just how much traffic the expected summer demand spike will bring.

To read a lot of the media stories regarding airlines resuming pilot hiring and the TSA looking for more screeners, it’s easy to conclude that things will be back to pre-CCP-Covid levels by the end of the year.

Unfortunately, as it stands today, that isn’t in the cards.

… The capacity won’t be there, so neither will the passenger volume

… The passenger mix will be very different… the expectation is for spikes in leisure/personal travel

… The levels of business travel will not be back to pre-CCP-Covid… certainly not in 2021 and a full return isn’t likely in the foreseeable future. The relative value of air travel as a business communication tool was changing even before the pandemic.

… While the fleets are being restored, the fleet mixes are different and in most cases the fleet sizes are smaller than pre-CCP-Covid.

… There are growth areas being explored by all areas – but not all will pan out as being viable.

It’s a Different System. The current Airports:USA® forecast still indicates strong growth for the next two years. But one fact needs to be understood: The 2019 air passenger traffic levels are NOT a functional benchmark. They are just a number reflecting the air transportation system of that year. An air transportation system that’s now gone.

The underpinnings of the air transportation system of the future are still being determined.

We will be updating the Airports:USA® forecast as we see shifts in the airline industry. For the next 2-3 years, traditional methodologies that assume airlines simply react to just economic metrics and demographics are nonsense. They are watching where the revenue streams – which are not specifically tied to historical tables – can be maximized within their specific corporate objectives. This latter concept – understanding airline strategies – is usually absent from most air service development approaches.

As they work to claw back, it is revenues that will be the driving force in airline route planning. That determination is specific and unique – and evolving – at each carrier.

Check Out The New Demand Drivers… Airlines are calling the shots within whole new passenger demand stratas. We covered this in last week’s Aviation Unscripted video, discussing the four major consumer segments and how they will be affected in the new air transportation system.

The video covers how many traditional metrics are gone. It then touches on the expected changes to the four basic air passenger segments – personal, business, leisure, and (new) impulse. Airports need to determine the general mix specific to their emerging post CCP-Covid traffic base.

Invest 8 minutes – click here to take a look… the point is that yesterday and yesterday’s metrics are gone.

Along those lines…

We are completing the subscription modality for AirportsUSA.com. In the meantime, click on www.AirportsUSA.com and take a look at the Snapshot tab, which provides overviews of current traffic projections.

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Thursday, May 6, 2021… 11AM US MDT
Clear Your Calendar and Log On To Aviation Unscripted

We’re Questioning The Consensus… With Clearly Disruptive Intentions.

In some areas, aviation future planning may be in danger of sinking into severe group think.

Sacred cows are starting to wander into the picture. Certain assumptions are increasingly not to be questioned. The masters have spoken. Accept and listen. This is not a healthy environment in which to plan the future.

Identifying Pied Pipers & Craven Idols. On Thursday May 6th at 11AM MDT, we’re planning to post an Aviation Unscripted video that within a few short minutes will openly question some of the key assumptions in regard to the race for non-fossil-based aviation propulsion.

It’s not that pursuing alternatives isn’t positive. It’s the often myopic and dogmatic goal-focus that has some very real dangers.

In just a few minutes of video, we’ll be bringing up a number of challenges that are being glossed over, or completely ignored. In some case, the direction that is being pursued could be disastrous for the human environment.

The point is not whether alternative propellants and alternative powerplants are not possible, or in some cases better than traditional technologies. It’s a matter of upline and downline sustainability, social cost and global economic impact. It’s more than just changing the chemical composition of what comes out of the business end of a jet engine. A lot more.

So, join us at 11AM MDT when we go on-line with some questions that it’s getting trendy not to ask.

Leadership means not following… too much of this important discussion has degenerated in to just that.

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HAVE A GREAT WEEK!

 

Monday Insight – April 26, 2021

The Expected Summer Traffic Spike…

Based On An Experimental Air Transportation System

Let’s take a look at the latest Airports:USA enplanement forecast…

Based on known and expected airline capacity and fleet decisions, 2021 is still projected to clock in at @615-620 million enplanements – even with robust second and third quarters.

The media is all agog about the near future… but a couple things need to be kept in mind:

Business Travel Has Been Decimated – Leaving aside the hyperbole, a lot of business revenues are gone… for the long term.  It may be 25% or more. Airlines are banking on developing new leisure traffic flows to fill the seats – and the revenues.

International Traffic Isn’t In The Play. The direct and indirect traffic generated at US airports by international demand is a fraction of what it was in 2019.  When whole countries are shut down from time-to-time, both leisure and business demand won’t manifest. This represented about 31% of US enplanements in 2019. It will not be a major factor in 2021.

The Foundation Is Discretionary Dollars Being Available. The expected spike is based on leisure traffic. This sector is dependent on consumer confidence. Consumer confidence is based on the expectation that people will have money to spend.

Now, look at some of the information oozing from the financial sections of the media. In all cases the stories focus on the “need” for higher taxes. Maybe gasoline taxes, maybe excise taxes, higher income taxes. None of that foggy drivel encourages discretionary spending. How fast this realization hits the public will bear on leisure air traffic demand.

The Expectations Are Based On An Experimental Air Transportation System. The chase after new leisure traffic is coming from major resource shifts at the four main network carriers… AA, DL, UA, and WN.

Take a gander – they are now in many markets that a year ago would have been a career-limiting move for an airline planner to even suggest. Point: they are looking for net-new demand to fill empty seats that were occupied by business travelers in pre-CCP-Covid times.

Plan For Changes….Rapid Changes. The positive news is that US airlines  have a strategic pulse and are responding aggressively to the foundational changes in air service demand.  They are experimenting with new approaches to address the economic damage done by the global gift from the CCP in Wuhan.

That means that today’s new-route ribbon-cutting can quickly tune into a service pink slip. Nothing personal… strictly business.

In a whole  new air transportation system.  “New” means unknown.

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Now On Aviation Unscripted Video:

Yesterday Is Gone In Regard To Traditional Aviation Planning Metrics

Very in line with the comments above, the reality is that the damage done by the CCP-pandemic has affected consumer patterns… the basic reasons that people use air travel.

In this week’s video, we look at some of the metrics and measurements that are now gone – mostly permanently – in the area of air service and airport planning.

We tackle the four main air passenger sectors and what we can expect in the future as airlines continue to flexibly evolve their product. We can plan on less business passengers, and substantially more leisure & discretionary travel. Whole airline revenue streams are being scrabled.

The Aviation Unscripted channel is at Rumble.com… just click here for the latest video.

And while your there, subscribe and let us know your comments, too.

Monday Insight – April 19, 2021

The Magic 18 Inches of Health Protection

Never has seat 21E had the importance and health benefits it does today. It’s a middle seat, and the shamans in Washington are hyping it like they just discovered radium.

Last week, the Center For Disease Control (CDC) issued a new study, urging airlines to block middle seats to stop the potential spread of the CCP-Covid virus in airplane cabins.

Impressively, the CDC noted that this move could reduce the risk by over 50%. Wonderful  advice, particularly since there has been essentially zip evidence of CCP-Covid spread in  airplane cabins.

Naturally, however, the media took this CDC study and  ran with it like Zeus himself had just delivered it by express lightning bolt.

Nobody seemed to question the CDC’s conclusions. One major network radio outlet was furious that we dared suggest that the CDC was claiming to reduce something that’s been shown not to be a risk in the first place. Don’t want to hear that… truth doesn’t matter to certain parts of the media when it might shed light on bureaucratic political correctness.

This is just another in a long line of wanderings by the CDC. It is reprehensible in that it implies that there is a very real and present threat in airplane cabins – one that has been proven not to exist.

Sure, that 18 inches of middle seat separation is great protection – especially after passengers crawl over each other when one needs to get to the window seat and are next to each other stuffing things into the overhead.

This CDC magnum opus isn’t science. But it is consistent with a lot of the political Kabuki theater that has attached itself to the bureaucratic Washington response to the CCP-Covid pandemic like barnacles on a tramp steamship.

Back in February a year ago, we were assured by the various “experts” and pandering politicians that it was okay to take a cruise, or go to a movie, or participate in group activities… even though it was clear that the CCP-Covid was spreading rapidly in China, Europe or elsewhere. We were advised back then that wearing a mask was not needed or even  advisable.

Now the very same sources are prancing around, telling us that we should wear not one but two masks for safety. The media buys into that as obediently as they have this latest CDC dictum.

Nobody in the media asks what the specs for the “masks” need to be. Two N95s? Two plastic hoods? Two paper masks imported from factories run by  the same criminal government  who started this pandemic?  Two soiled  hankies?

Yup, all of the above are equally fine. It’s “science,” don’t ya know. Not to be questioned.

If looked at honestly and without the pandering political correctness much of the media worships, this stuff fails to meet the standards of a half-naked witch doctor in some far-off jungle.

See, this is more about proving obedience to the “authorities” than health. Sort of like a religious requirement to  cover one’s face to show subservience.

The latest CDC “study” is more of the same.

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The “Infrastructure” Bill:

Airport & Aviation In The Long-Term Crosshairs

France has just passed a law prohibiting air service between any two points where rail service is less than 2.5 hours. Germany is on the same path.

See, it’s all about reducing carbon emissions… regardless of other issues, or even the economic fallout that may result. Or even if it will make any real difference. It’s part of the sacred environmental scripture… air travel is evil. Choo-choo trains love the environment and will protect the polar bears and snake-darters and endangered lizard species in the Amazon rain forest.

Back home, there are clowns inside the Marble Playpen in Washington that are likely looking at trying to do the same in the USA… environmental jihadists who need no facts or truth to spoil their dogma.

Only problem is that the USA does not have any such rail system.

Yet.

But they’re fixin’ to do something about that little problem.

We touched on this last week. But it’s important that every sector of the aviation industry be fully aware that this “infrastructure” bill leaves airports out in the cold. And could be the start on the path of bureaucrats dictating how we must travel in the future.

Now, to be clear, this legislation has about as much to do with infrastructure as Karl Marx had with the Vatican Council. But it is obvious that airports and aviation are not at the table in this pork-fest.

In the current Aviation Unscripted video, we discuss how the bill will slobber tax money all over building trendy new “high-speed” passenger rail across the nation. It’s trendy. It’s environmentally superior. (A lie, but truth isn’t a factor in the dogma.)

This is more than just constructing rail beds. It’s part of a long-term plan to hamstring commerce based on crackpot but politically-accepted transportation planning.

Click here. It is critical that everyone in aviation be able to discuss this matter factually.

It does affect the future of our airport system – and the national economy.

Monday Insight – April 12, 2021

Congressional “Infrastructure” Funding:
Chump Change For Airports – And Insults For Communities

It gets really, really difficult not to simply call it for what it is: irresponsible political pork.

We’re talking about the financial dishonesty of the “infrastructure” bill being ginned up by the life forms inhabiting the marble playpen, a.k.a. Congress.

Two Trillion for “InfrastructureThat Isn’t.  This rag bill has payoffs in hundreds of millions for stuff for which anyone with access to a Funk & Wagnall’s would find no such definition.

But here in our industry, the glorious bill that we are told “the people” are all excited about has just $25 billion for airports.

‘Course, the trendy rail hobby-lobby got $80 billion, much of which is to build new intra-city lines that nobody will use, and in no case will even cover their costs. And lots of money to make Amtrak’s dilapidated, obsolete and mostly useless long-haul services even more wasteful.

See, air transportation is not a modality that has any real support among the elites now in charge. See, the emerging new role of air logistics is nowhere near as exciting seeing lots of new high-speed (like, 35-mph average in some cases) choo-choos going across the countryside. Mostly empty.

Let’s put this $28 billion in context… the post-CCP-Covid context…

It’s Barely Covering The CCP-Covid Losses, Let Alone A Runway Rehab. Airports:USA® produces the only independent enplanement forecasts accomplished entirely in the private sector. Below we have compared the national Airports:USA® forecast accomplished in the 3rd quarter of 2019 and presented at the 24th Annual International Aviation Forecast Summit in Las Vegas, to the most recent (April 1, 2021) forecast.

Not a pretty picture…

Take a look at the cumulative difference between what was forecast based on the air transportation system that existed before the CCP inflicted Covid on the Chinese people and then the world, and the current projections through 2025.

Through 2025, the forecast indicates there will be cumulatively 1.74 billion fewer enplanements at U.S. airports between 2020 and 2025 than would have been generated by the pre-CCP-Covid air transportation system.

Let’s put a pen to this. Assuming that the average revenues per enplanement – concessions, parking, fees, PFCs, etc. – would be something like $15, this loss of 1.74 billion enplanements represents just over $26.2 billion dollars.

These were revenues that airports had most likely planned for in their Master Plans and long-term facility projections. And they are gone like the dodo.

Gee, that’s not too far off of the $28 billion in federal largesse that’s in the “infrastructure” bill.

So, the conclusion is that this new money from Congress is barely a wash compared to the hit airports are/were taking due to CCP-Covid.

Time For Airports To Raise A Bit of Ruckus. Okay, aviation industry. The perfunctory congrats to the new Secretary of Transportation are over. It’s time that this infrastructure scam be righted. These people are going to spend this money in any case, and airports likely need four or five times the peanuts Congress is tossing at them.

The Washington alphabet organizations representing airlines and airports need to sharpen their pencils and advise Congress what’s really needed.

And make it loudly public. Or just sit back and get chumped.

This whole dishonestly-labeled spend has more to do with political pay-offs than infrastructure.

For more information on Airports:USA® just click here.

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Another Economic Pandemic Gift From The CCP?

As our clients know, last week’s Touch & Go newsletter outlined a potentially disturbing eventuality.

Like, another pandemic-type economic event that will torpedo the current post-Covid recovery. Perhaps a bit of skepticism… understandably.

It’s not crazy talk, but it involves crazy people. See, wars don’t do much for economic recovery, particularly ones that could shut down the entire logistics and air travel flows across the Pacific.

It’s the potential of China militarily invading democratic Taiwan. If this takes place, there will be major conflict – a.k.a. war. Missiles, tanks, all sorts of related violence.

In that process, you can take it to your bookie that trade between the USA and China (and the rest of the relatively sane world) will get disrupted.  That means a lot of the things we (unfortunately) rely upon from Chinese sweat shops won’t be on the shelves. Things from the tacky electronic gizmos advertised on late nite TV up to major auto parts, furniture, TVs, cell phones, computers, major appliances and the like.

This means that a lot of U.S. factories won’t have the China-sourced components to keep the production lines going. That means economic slowdown – facilities closed, paychecks missed, and a lot less discretionary travel – which has been the lynchpin in the recent recovery in air travel demand.

Yes, given the damage it will concurrently inflict on China, it makes no sense. However, the political factions inside the CCP are in a free-for-all to get the current Thug-In-Charge, Xi Jinping out. So, his next move could be a move to “restore” Taiwan — one that his political opponents would have to follow.

If you haven’t pulled it up, the latest Aviation Unscripted video explains the background to this hoedown, and what might happen. Trade channels are very fragile, and the fallout to the U.S. economy and air transportation system will not be inconsequential.

This event could happen any day, or maybe a couple years in the future, or maybe not at all.

But given the rumblings from inside Zhongnanhai (the CCP headquarters in Beijing) it may be sooner that we’d like.

Click here to get the story. It’s on our Aviation Unscripted channel on Rumble.com.

While you’re there, subscribe to get notices of future Unscripted videos, scheduled for each Thursday. Our approach is awake, not woke.

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FROM ALL OF US AT BOYD GROUP INTERNATIONAL, HAVE A PROSPEROUS WEEK!

Monday Insight – April 5, 2021

Traffic Forecast – Continued Strength
But 2019 Passenger Levels A Long Way Off

The latest Airports:USA® long-term forecast indicates just under 620 million enplanements for 2021.

Based on known and expected airline capacity and fleet trends, the latest Airports:USA® forecasts indicate 2021 on track for just under 620 million enplanements.

This tracks with current rates of screening reported by the TSA, which has been in the 1 million to 1.5 million level each day.

Currently, the average passenger journey generates 1.4 enplanements, which is the result of connecting itineraries. This then would indicate that the 620 million enplanement figure is on target.

The challenge is that this figure is well short of the 960 million experienced in 2019, and even further short of what was expected, pre-CCP Covid, for 2021. Based on the forecasts and traffic trends expected, year 2021 was projected by Airports:USA to be approximately 1.15 billion enplanements.

That means we are looking at a very different air transportation picture, and one that represents a much-reduced set of revenue streams for all sectors of the aviation industry. The planning that was in place in March of 2020 has in many aspects been made obsolete.

Obviously, the picture is mixed. Some regions are in line for very strong enplanement growth, based on the airline industry adjusting to the new consumer and business base.
What needs to be grasped is that there is no “rebound” – the reality is that we are experiencing traffic adjusting to the fact that air transportation as a communication modality is changing, both in regard to leisure and business applications.

How this will manifest is based on very different consumer and economic drivers than the ones in place in 2019. Understanding these emerging dynamics will be critical to revising airport Master Plans and revenue projections.

Airports:USA® is the only independent source of traffic and trend forecasts for the industry. Updated constantly, it provides clients with the insights and perspectives that illuminate how air transportation will evolve in the future.

Log on to www.AirportsUSA.com and then give us a call and we can set up a quick demo of how we can give you a clear planning tool for the future.
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In This Week’s Aviation Unscripted Video
Another Pandemic – An Economic Pandemic – May Be Coming

Not to be a Kassandra, but we may be in for another set of economic torpedoes later this year… maybe sooner.

Be sure to join us this Thursday, April 8, for the latest Aviation Unscripted video, published on that channel on Rumble.com. We have some very sobering insight regarding some possibly near-term shenanigans on the part of the un-elected hoodlum system running China.

Understanding the events and geo-political issues that are unfolding in other areas of the globe is essential to contingency planning. This is one contingency that might land in our laps and put air traffic and the economy back on the skids.

The CCP-Covid pandemic was a health-related scourge that was inflicted first on the Chinese people and shortly thereafter on the entire world.

Unfortunately, the mobsters running China may be in line to do a repeat, but this time it will be an economic pandemic.

Political trends in China are very dangerous. Various factions are going to the mattresses in power struggles regarding the current leader, Xi Jinping. It is just like the mafia on a huge scale… they are all members, but the infighting between “families” portends danger for the entire globe.

Dictators in trouble tend to take actions that are aimed at rallying the citizens and neutralizing opposition from political enemies. In this case, what Xi Jinping may pursue will do to the global economy what his incompetent handling of the Covid virus did to global health.

To access the Aviation Unscripted video channel, click here… and be sure to log on this Thursday and get the facts. Things could change very quickly in the months ahead.

Here’s one hint. Taiwan.

Monday Insight – March 22, 2021

Recovery In The US Airline Industry – Selectively

Last week,based on data from our friends at Cirium, U.S. air carriers slashed another almost 30% out of the already-filed April schedules… May has just started to get the knife.

Nevertheless, traffic is growing slowly, but based on entirely different air travel dynamics. US carriers are moving toward being cash-positive. But the fact remains that the air transportation system will be smaller. The fact also remains that international traffic is going to continue to to be constricted, which will drive additional changes in airline fleets and long-term strategies.

The open question is fleet decisions. We are seeing indications that network carriers are moving to the middle… smaller narrow-body units. One indication was United bringing in a used 737-700, and American/Envoy leasing in some used E170s.

Meanwhile, a number of airports across the country are getting pleasant surprises, with major carriers unilaterally adding additional hub-spokes as well as some probably-experimental point-to-point flying.

ULCCs – the “parallel” air transportation system is going to larger units of single-aisle capacity. Frontier is retiring A319s and adding A321s, including  at last look a number of A321XLR units.

The Airports:USA forecast is still indicating year 2019 traffic levels to return by 2024 nationally. Within that, as we’ve outlined in recent Insights, there will be at least two dozen US airports that will exceed 2019 enplanements by the end of this year.

More data in this week’s Touch & Go newsletter for our clients and friends.

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In This Week’s Aviation Unscripted…

“Try new approaches. If they don’t work,  fail fast and move on…”

That was the message from United Airlines at the 25th International Aviation Forecast Summit last October. It’s the absolute right  recipe to get through these uncharted times.

In the new air transportation systems and changes in consumer patterns, airlines have to move fast and flexibly in planning the future. They are doing just that, which means that there are no hard and fast rules. Things change overnight as carriers strategize out of the damage done by the CCP pandemic.

Traditionally, airport enplanement forecasts were static document updated every year or so. The air transportation industry was stable – no across-the-industry disruptions.

That’s no longer the case. As airports have found, air service trends are changing daily. Capacity levels, schedule patterns, fleet applications, and even new service entry can come as a surprise.

This means that traffic forecasting needs to be a live, constantly updated document. One airline expansion or deleting can change everything.

We cover this in the latest Unscripted… it’s a short view, but has some points important to maximizing the future.

Log on and join your colleagues. We are excited regarding the viewership on Rumble and other access points. We appreciate the support!

Monday Insight – March 15, 2021

The Traffic Picture – U.S. Positive. International Not So

We can start with this: the U.S. airline industry is in better shape than any other in the world. One reason is that, aside from China, it is the only one that’s based on a huge domestic demand.
A recovery is starting to show… the capacity knife was used a lot less on the originally-filed schedules for March… as it stands, it appears that this may be the case with April and beyond.

The latest Airports:USA® short term forecast:

If the trend holds, if the economy holds, if new taxes are not imposed, if the increasing constriction on petro-production on the part of the inhabitants in Washington doesn’t jack the price of jet-A up, the traffic recovery will be quicker than estimated three months. A lot of ifs.

The Welcome Signs Are Coming Up. A number of states have made the decision to completely or almost completely opened up. The requirements to cover one’s nose and mouth – regardless with what (N95 or a used hankie are both regulatory-satisfactory), and regardless of where one is, or how effective it may be – are being lifted in several states.

This removes the barrier and uncertainty of traveling to major places such as Texas and Florida. Other states are still in a state of CCP-Covid confusion. Nevertheless, the picture is clearing.
That’s in the United States. Not so in the E.U. or the U.K. Latest news is that Italy may shut down, and it appears that guy with the run-away hairdo who’s running Merry Olde England is clueless. Canada is still constricted. Same with other parts of the globe.

A New U.S. Air Transportation System. New Airline Strategies. Amid all this, the restructuring of the U.S. air transportation system will continue. The main apparent trends are:

• Expansion of Leisure Destinations… Florida is the main recipient, but any flows that can be identified as having potential leisure stimulation are in play. Montana is another opportunity. The goal is to plumb into some of the money not spent over the last year.

• Major City – Secondary City O&D Market Spokes. Big markets such as Los Angeles can offer potential of stimulating day-of-week or low frequency service to mid-size airports that in pre-CCP-Covid days weren’t really opportunities. In regard to Los Angeles – and California in general – it will all depend on some regulatory consistency coming into the picture.

• Expansion of Hub Flows. American in particular is bulking up on accessing secondary airport flows, particularly at CLT. Great news for some regions… how fleet changes will affect this in the long term is uncertain.

The U.S. airline industry went into full metal jacket mode almost immediately upon the arrival of this gift from the CCP in Wuhan. It’s clear that every airline now has an aggressive and internally-generated strategy to deal with the effects of the pandemic and the sometimes herkie-jerk responses on the part of some state governors.

Meantime, Back In The Old Countries… The situation in the rest of the world is not encouraging. As noted above, Europe is completely in planning chaos. Australia is still restricted in regard to international access.

Asia is not only affected by the CCP virus, but by widespread and very uncertain political issues, mostly driven by the 21st century Nazis running China. (The chief Don of this criminal enterprise has instructed his army to prepare for war. It may be more than the usual doggerel, based on infighting between factions in China. Think Kinmen or even Taiwan as “points of interest” in the next 12 months.)

The point is this… the main reason for the plunge in domestic air traffic in the USA was first fear of the disease, and then the uncertainty of whether entire cities might be shut down. Both of those factors are receding. Domestic traffic levels will rebound faster than recently forecasted.

But the emerging national and global air transportation systems are still structured for the world of 2019. That’s dead… the roles and utility of air travel have been shifted. Leisure, business and international travel patterns have changed and that means airlines are facing new fleet imperatives.

As noted last week, the era of the “regional jet” – defined as 70-seats and below – is over. The next big trend will be in the single aisle category, with A320neo, 737 MAX and A220 variants opening secondary airports to a much wider set of new market opportunities.

The only uncertainty is how the economic plans being ginned up by the inhabitants of the Marble Play Pen will slow all this down. The indicators are not positive.