ATC “Reform” – Following The Gambino Model

Anybody remember Paul Castellano?

He was the all-powerful Don of the Gambino family in New York.

He got whacked by his underlings in a high-profile hit in front of Sparks Steakhouse in 1985.

It seems they disagreed with the Don regarding management issues, but had no disagreements about the underpinnings of the family activities themselves.

It resulted in a complete management change in the family. But at the end of the day, the family was operating just as it did before Big Paul met his untimely demise. Just new faces at the top.

“ATC Reform” – Whacking The FAA… But Keeping The System. What took place long ago on East 46th Street is pretty much along the lines of the current hoopla around whether to “reform” and privatize the air traffic control system, or leave it in the clumsy control of a bungling government agency.

The reform crowd, not to put too fine a point on it, wants to corporately take out the current ATC Don – the FAA – and take over the “family” – the air traffic control system.

And like the Gambino capos who wanted Big Paul out, the ATC reform folks have no quarrel with the core business activities of the current FAA Don. They just want control – in this case, that means control of the NextGen program. Not change it. Just control it.

As a factual matter, neither side in the ATC squabble have issues with what the FAA is actually doing… they have no criticism whatsoever on NextGen. it’s just the management style they disagree with.

Nothing personal – it’s strictly business.

Much Ado About Going Nowhere New. The noise surrounding whether the air traffic control system should be “reformed” or left in the clumsy cloak of the FAA gets louder – and more irrelevant – with every press release from either side.

The “reform” crowd all contend that putting the ATC system under a semi-private structure will result in a new modernized system. Poof! Just like that. No other changes necessary.

These vapor claims are sometimes accessorized with un-supported and frankly fruitcake predictions that “reform” will massively cut airline delays by double-digit amounts.

The anti-reformists are warning that privatizing ATC will be devastating to the air transportation system, as they claim it will turn it over to the evil airlines, who’ll certainly use to make more money at the expense of the consumer.

A key tenet of the anti-reformists is that privatization will result in small communities losing air service – a contention completely concocted and being nothing more than a desperation fear-grenade… not much different from the clowns that claim an end to EAS will close airports.

The point in all this is that neither side has a clue. Neither side has a problem with the ATC NextGen “family business” – which is a fraudulent scandal that both want to continue to worship and retain.

Neither side has promulgated any fundamental changes in ATC modernization. Nobody has dared mention that NextGen has a rap sheet of failure longer than I-95. Nobody has suggested structural changes that address the bungling at the FAA for the last 30 years.

Both sides agree, apparently, that NextGen is the answer… they only differ on how it should be managed… or, mismanaged.

It’s An Airline Problem Now… And That’s Where The Solution Is. What is becoming more and more clear is that the path to improving air transportation efficiency does not lie within the FAA or the ATC system, regardless of who’s running the show. Neither contender to the ATC throne has so much as a suggestion on what to do differently from today in regard to modernizing the system.

So, it’s now the responsibility of the airlines. No more excuses. If flights can’t deliver passengers in accordance with the schedules the carriers themselves publish, the buck stops in the airlines’ front offices.

GAO studies on ATC – the majority of which, by the way, do not blame funding for the mess the FAA has created with NextGen – have noted that the actual causes of airline off-schedule operations are not fully understood. In some cases, the ATC system is the cause. In others, airport congestion. In others, sheer dimbulb operations management by airlines.

But one thing is now certain: this hype about “reform” is based on bogus assumptions and PR doggerel. This is not to say that ATC modernization should not be taken away from the klutz-masters at the FAA.

It just illuminates that whether “reformed” or remaining in the status-quo, there are no ATC-based solutions on the horizon.

Both sides want to retain the problem, under different management systems.

Great planning.

The End of FF Programs. Not With A Bang, But A Whimper

Good Business For Airlines. Good For Competition, Too

It’s Reflective of New Airline Economics

On August 26-29th, leaders throughout the industry – from airlines to airports – to suppliers – to financial institutions will be at the 22nd Boyd Group International Aviation Forecast Summit to tackle the inter-connected trends that will affect future planning at airports, airlines, financial institutions, suppliers and manufacturers.

The financial underpinnings of air travel are changing, and assuming that the future is just a trend line of the past is a great way of getting stuck there – in the past.

At the IAFS™ we go into areas that other events don’t even get close to. Two weeks ago, for example, we reviewed how we will be exploring capacity expansion in the future, and how it will affect different categories of airports in the future.

This week, we give a preview of one of the other areas we’ll be exploring at the IAFS™, which are the changes in airline consumer marketing.

Specifically, the evolution – or maybe evaporation – of key parts of frequent flyer programs – and the net benefits for airports around the nation.

Take it to the bank. No other event will deliver the insight that the IAFS™ delivers. We’d suggest joining industry leaders August 26-29 at the Wynn Las Vegas Resort and get ahead of the planning curve.

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Traditional Frequent Flyer Programs:

Giving Away What You Can Sell… That’s Not Good Business

American has again re-structured its frequent flyer program.

In the future, earning status levels, perks and rewards will be determined by spend, more than just miles.

It’s part of a trend across the industry – and one that spells the end of frequent flyer programs as a major factor in carrier choice for millions of consumers.

AA is not alone. Delta and other carriers are moving to make FF perks and program levels more connected to dollars that are spent… meaning that they’re kicking the program financially upstairs.

Reason: the original business reasons for frequent flyer programs no longer exist.

But it was a great marketing idea, back in 1981.

“Here’s the deal,” the marketing VP probably said as he pitched to idea to the CEO. “Our average load factor is just 60%. We have lots of inventory available. So, let’s make it an incentive for customers to fly us, instead of another airline…”

“… all we do is let them get a free ticket for every 10,000 miles they fly with us. We can dangle free trips to Hawaii, California and across our system.”

“Yes! Dynamite idea!” the CEO chortled. “We can fill unused capacity, and take business from the competition! And we can dangle free first class upgrades. Right now that cabin’s full of non-revs.”

“You betcha, boss,” the VP responded.

“Now consumers will be less likely to fly the competition. Like TWA. Or Braniff. Or Continental. Or Piedmont. Or Republic. Or PSA. Or Pan Am. Or Eastern. Or Northwest. Or AirCal. Or Texas International. Or Ozark. Or any of those pesky other competing airline systems!”

Now fast forward to today.

That then-gangbusters 60% system load factor is now closer to 80%-85% – meaning the inventory is being sold, and there’s a lot less available for free giveaways, not to mention the need to give away seats.

All of those expanding competitors are now the subject of airline nostalgia conventions. First class cabins are now occupied substantially by paying passengers.

What’s the message? Simple. The entire original raison d’etre for frequent flyer plans has pretty much evaporated. Today, it’s not good business to reserve inventory for FF use when it can be sold anyway.

As a result, the airlines have no choice but to pull back on the perks – not only do they no longer need to offer them, but they don’t have the inventory to deliver them, anyway.

The American changes to its FF program are simply good business. Carriers have less need for brand-loyalty programs when they can sell most or all of their inventory without the brain-damage of managing a massive frequent traveler marketing program.

Gold Status: Maybe Not Worth Chasing Anymore. But this also means that for many of the former status-chasers in these programs, the “status” isn’t worth the hassle of keeping  his or her business all at one airline.

For all but the top-tiers of top-spending customers, a first class upgrade is getting as likely as an Elvis sighting. The hurdles to getting a free trip are way up, particularly to places like Hawaii, and even then, the itineraries offered sometimes look like an inspection trip of the airline’s route system.

And as for the “priority” boarding that some carriers depict in TV ads as just a quick stroll into the cabin, it’s more likely the experience of standing in a numbered pen, where the line-up begins 45 minutes to an hour before departure, and snakes 50, 60 or more people down the concourse.

At peak times at a major hubsite connecting bank, the concourse looks like individual DMVs at rush hour.

Not only that, but the lower-tier frequent traveler, who’s concentrated flying dozens of flights on the airline to get this wondrous “priority” boarding perk, finds himself behind the family of four, that travels once a year, but has one of the airline’s affinity credit cards.

No More Penalty For “Disloyalty”. It’s a matter of time before a lot of consumers recognize that the incentive to give all their business to one airline and earn a higher status is no longer there.

That’s great news for airports – particularly hubsites. At least hypothetically, this will tend to make flying alternative carriers more attractive for frequent business travelers. Since there is less chance of earning a status level that has any real benefit, spreading the business around no longer has a downside.

This will continue to open a whole set of competitive consumer patterns in the future. For one, it reduces – at least on paper – the barriers for competitors at airline fortress hubsites.

The complete fallout will become more apparent over the next three years, as mid-level frequent flyers start to adjust to a world where it’ll be mostly the top-spenders – the global sky warriors – that will be the main beneficiaries of these programs.

Join Us In Las Vegas For Real Futurist Planning Insight. This is just one of the changes in the competitive structure if the US air transportation system that we’ll be illuminating and exploring at the IAFS.

There are others that we’ll be covering… areas that other events miss entirely… but which will be critical factors for future aviation planning.

We’ll be doing blunt analyses of dynamics such as “hub-choke,” increased regionalization of air access, “road hubbing,” parallel ULCC options, changing fleets, supersonic airliners, exciting new international access for secondary US airports, and more.

Click here for more information and to join us August 26-29 at the Wynn Las Vegas Resort. It will be an intense couple of days, but prepare to leave with insights and perspectives that will be your competitive advantage.

Monday Flash – August 15, 2016

Global Carriers – Breaking News:

Your  Premium Passengers Are Up For Grabs

There’s a disruptive technology advancement coming that will materially alter how intercontinental airlines structure their product and their fleet configurations.

Front-End Traffic May Not Stay There. Today, global carriers depend heavily on high-yield “front cabin” traffic as a major part of the revenue streams that support long-haul transcontinental routes.

These customers sitting up front are the people who disproportionately pay the freight.

Front-Cabin Is Where The Revenue Is. Call it what they will, there is a declining differentiation  at airlines between “business” and“first” class airline products. Basically, the distinction has disappeared. The battle for “business” class has stumbled carriers into upgrading these cabins to a product basically parallel to what was “first” class.

It’s pretty obvious how important these customers are to major airlines. They want to keep them coming back. Therefore,  gee-gaws and fancy service is important to these folks, who pay between four times and eight times as much as the great unwashed sitting in economy on the same flight.

So, they luxuriate in whiz-bang, lie-flat seats that  have more electronics than a Best Buy store at Christmastime, and each can cost as much as a tract home in rural Ohio. Those seats also gobble up a lot of cabin real estate, reducing capacity, making each seat more critical to sell.

The vittles and hooch served on a trans-Atlantic flight can cost as much as $100 a passenger, all-up.  Other competitive amenities, such as dedicated airport lounges, add to the expense of attracting and keeping these customers loyal to the airline.

After all, the business class honchos will be sitting on board for 7 to 10 hours, so there’s plenty of time to lavish fine wines and culinary delights on them. But the fares more than make up for these expenses.

Critical To Airline Sector And System Revenues. Whatever the moniker – first, business, or whatever –the high yields this segment delivers are critical to the revenue mix that supports the 200 or so folks sitting in 17-inch wide seats behind the curtain, and, partially thanks to the customers up front swilling down French wine, lobster and Cointreau, they enjoy fares that might be much higher than otherwise.

It’s a balance. The front cabin helps make the economy section more affordable on many intercontinental routes.

That’s the status-quo of current long-haul flying at major global airlines. It’s fixin’ to change.

Vulnerability: Emptying The Front End of The 777. But what if there were new fleet entrants that diverted these front-cabin passengers? Took them away. Offered a superior product at the same fare?

What if today’s front-cabin traffic had a superior alternative  compared to riding in today’s opulent 777s and A-350s for the equivalent of the better part of a whole work day? An alternative that deliver a superior product in the one factor most important to  high-yield business-class passengers.

That factor is not a soft duvet on the lie-flat. It’s not the three-course meal. It’s not early boarding and a welcome cocktail.  It’s time.

That’s what we’re going to be exploring at the 21^st Boyd Group International Aviation Forecast Summit.

We’re going to outline a whole new category of airliner that will change both airline fleets and airline revenue equations.

Within ten years, we can expect new-technology supersonic jetliners that will slice travel times in half or more, and deliver performance that will allow whole new market expansion. For business class passengers, it will be the choice, and global airlines will find themselves losing this segment unless they have these new airliners in their fleets.

Join Your Colleagues For Some Facts & Revolution. Boom Technology has an airliner that airlines, airports, suppliers and financial institutions will be following in the immediate future. A design that will shift airline fleet strategies.

It already has ten options from Virgin… and, based on its cabin, speed, and economics, will be the new “front cabin’ for major international carriers.

The open question is that, with diversion of these high revenue customers off of traditional twin-aisle airliners, what will be the effects on future growth in the economy segment.

For attendees at the Summit, we’re going to be exploring this new disruptive entrant – one that the rest of the analyst category will be “discovering” months or years from now.

‘Nuff said. The Supersonic Revolution will be part of the IAFS™ and our attendee will be the first to get an in-depth discussion of this coming dynamic in air travel.

Register By August 20 & Be Part of This New Future. By the way, IAFS™ paid attendees who are registered by August 20, will be eligible for a drawing to win a model of the Boom airliner, and an invitation to the roll-out/early flight of the airplane. It means clearing your calendar for some time in 2020, but it will be worth the wait.

To register for the Summit, and reserve you space at the Resort at Squaw Creek, click here.

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August 1, 2016

IAFS Forecast Flashes…

At the International Aviation Forecast Summit, September 18-20, we will be reviewing the latest revisions to the Airports:USA® enplanement forecasts.

Not just numbers, but the trends that are driving them.

Among the many forecast points that will be covered…

US-EU Traffic: On The Precipice. Big Time.

Paris. Brussels. Frankfurt. Saint-Etienne-du-Rouvray.

Sites of terrorist attacks.

It’s the last one – Saint-Etienne-du-Rouvray – that’s the alarm bell in regard to future trans-Atlantic traffic shifts. A small town in Normandy. At a church, not a metro downtown area  or a major crowded shopping center.

Accomplished by a person who had actually passed a background check to work at the local airport.

Terror is no longer just confined to large, high-profile targets, anymore. It’s spreading across the EU.

If It’s Tuesday, It Might Not Be Belgium. What all this points to is that there will likely be a lot of second-thoughts among consumers looking to take the family on a European vacation.

As it stands, this could slam trans-Atlantic leisure traffic in 2017. The Airports:USA® data indicate that it’s possible that this sector could be hit by 25% or more. Since international traffic is directly or indirectly the driver for 29% of US airport enplanements, the effects of this will be felt across the US.

We will be reviewing which airports should be ready for this dynamic, and which airlines and alliances could be slashing capacity.

New Fleets – New Opportunities For Mid-Size US Airports

On the domestic side, the Airports:USA® forecast indicates enormous new potential for air service expansion at mid-size US airports in he post-2018 period.

It’s More Than Loss of RJs. New fleets are being introduced, delivering major changes in capacity mixes and airline strategies. Yes, smaller jets and turboprops are heading for the desert.

The fallout from these fleet changes has largely been missed entirely, with the focus on the fact that scheduled passenger service at a lot of small airports is less and less viable.

That’s true. The “floor” in regard to departure capacity is gravitating toward 75+ seats. This has set up the din about smaller communities losing flights at the local airport. And all manner of useless tail-chasing locally and nationally to reverse the trend – which is like trying to reverse gravity.

Circumstances Change. Planning Must Change.  True enough, this is going to accelerate. But as we’ll be covering in the pre-Summit Workshop on the need for Patton-like air access planning, future circumstances won’t be anything like today’s.

These changes in fleet mix will also be positive for communities that address the future, instead of trying to re-create the past.

At the Summit, we’ll be forecasting the real effects of new fleets – and they are strongly positive for growth and expansion in mid-size airport service.

What most analysts focus on are things like the great economies airlines will get with new-generation aircraft such as the A-320NEO, the 737MAX, the CSeries, the Embraer E2s, and the Mitsubishi MRJ.

They are missing the main benefit and the main outcome when higher efficiency flying machines take to the skies.

It’s After 2017-2018, But It’s Coming. History is being ignored. The opportunity is being ignored. So, anybody want to take a guess at what this all represents for air access in the US?

Not to worry, we’ll be covering this – and which airports are in line for new air service opportunities in the future – at the Airports:USA® session of the IAFS™.

This will also be touched on during the Global Airliner Demand sessions, where Embraer, Airbus, Boeing, Bombardier and Mitsubishi will be presenting their product forecasts. We’ll cover it, too, in the Boyd Group International Fleet Trend & Demand Forecast.

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The IASF™ App Is Now Up And Available

We have an exciting – and useful – new app for the 2016 International Aviation Forecast Summit.

Yes, it covers the latest information on the Summit, including the agenda, and the free transportation from RNO to the Squaw Valley Resort, provided by our hosts, the Reno-Tahoe International Airport.

But it’s also now a functional forecast app, too.

Check out the Updates tab on the app, which will provide insights on the forecast trends that are emerging in aviation. This week, we touch on the potential plunge in US-EU traffic. Throughout the week, it will be updated with other aviation forecast flashes.

So download the app via the QR code, and move into the future. It can also be accessed at the Apple app store.

It’s your glimpse into the future – and the pulse of the industry’s #1 event! Register now!

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To Start, Air Access Updates…

We’re excited to note that our client Bangor International has gained year-round AA service to Charlotte as well as week-end American flights to Chicago.

Also, American will be operating from Traverse City Cherry Capital Airport to the Big Apple this summer, with nonstops to LaGuardia. These join the seasonal TVC-DFW flights that were facilitated by a SCASD grant crafted by Boyd Group International.

Stand by. More to come…

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Congratulations, Las Vegas.

America’s Only Truly Functional China-Welcome™ Gateway

On December 2, 2016, the first nonstop flight from Beijing arrived at Las Vegas.

A notable event, one year ago.

But even more notable was that this was the implementation of the  first truly in-depth, functional and comprehensive China-Welcome™ program at any US airport.

It was also notable to the arriving passengers. A year later, it remains so.

From the welcome they receive in Mandarin at the  jetway from a team of uniformed 欢迎大使 – Huanying (Welcome) Ambassadors – all the way through the customs processing, right through to ground transportation, these important customers are supported every step of the way into Las Vegas, and back to China, too.

Signage and wayfinding in Chinese is deployed at all communication touch points, and the Ambassadors are ready to assist these important visitors as they processed into the US.

At the FIS, they’re guided by new signage in simplified Chinese characters. The unfortunate fact is that at most US gateways, the even the official US Customs signage is still in “traditional” Chinese – and that hasn’t been used in mainland China since Chiang Kai-shek skedaddled out of town. It borders on insulting to visitors. That’s not the case at McCarran.

More Than Fluff Greetings – Mining Important Strategic Planning Info, Too. The program is not only a marketing success, but a strategic one as well.

At each departure, circulating in the lounge area, the Ambassadors politely ask passengers if they would share information on their trip, including for Chinese citizens where they are going and what part of China they are from. The process conveys the perception that the airport recognizes the value of their business.

While anecdotal, the information is also very valuable in collecting basic demographic information on this emerging international visitor sector. .

LAS – Leader In Innovative China Outreach. In addition to this local program, LAS has also implemented an aggressive digital presence in China.

McCarran stands out in having the most comprehensive WeChat app of any US airport. WeChat is the most widely used – and most flexible – mobile app in China, with over 500 million Chinese subscribers.

The McCarran WeChat app puts the airport literally into the pockets of thousands of Chinese travelers before they leave China. And once at LAS, the app serves as a navigational as well as a digital forum for airport concessionaires to offer Chinese menus and special promotional offerings.

It’s a tool not only for visitors on flights directly from China, but for the over 340,000 Chinese who pass through the airport on other flight routings. The QR code to download the app is also conveniently provided in signage across the airport, including on the inter-terminal transit trains.

In fact, the sophistication of the McCarran WeChat app is the equal of those at Beijing Capital and Shanghai Pudong airports. That’s natural – it was designed by the same team, a team that’s now associated with Boyd Group International.

There’s Veneer China-Prep, And Then There’s China-Welcome™. A lot of US airports will claim they are “China ready,” but Las Vegas McCarran is the only one to have a truly functional and pro-active outreach that goes beyond a couple of signs, a Mandarin speaker on hand, and “cultural” awareness programs.

At LAS, Chinese visitors are proactively made to feel that the airport respects and values their business. The uncertainty and anxiety of Mandarin-only speakers are aggressively addressed.

That is not the case at most other US airports. To be blunt, Mars probably has better Chinese wayfinding and welcome than at most US international gateways.

Interested In Gaining More of This Traffic? We’re Ready. With an expected 26 million visitors expected from the Middle Kingdom in the next five years, it is aggressive airports such as McCarran that have the eye of the new Chinese airlines seeking to enter the US.

Boyd Group International is proud to have worked with McCarran in establishing their China-Welcome™ program. And across the US, we’re working with a number of airports – of all sizes – in crafting programs tailored to their specific China opportunity.

If your airport or community is interested in developing a China-Welcome™ program, let us know. From full-featured systems such as at LAS, down to informational brochures available and ready, we can craft a program that puts your facility ahead of the competition.

Yes, But Our Website Already Has A Chinese Translation. No, You Don’t. Here’s some important advice. If your local website has one of those automated google-type “translations” into foreign languages, including Chinese, we’d suggest you stop right now and get it off your site as fast as possible.

Those machine translations are insultingly inept and make the airport look stupid to Chinese visitors. They translate words in raw form, with the result being laughable and embarrassing.

Instead, let us assist in implementing a web strategy, from a simple professional Chinese tab on your existing site all the way up to hosting a full-featured website in China, created in Chinese, not translated from English..

For more information on the range of cost-effective China-Welcome™ channels we offer, click here to the China Ni Hao website.

In the meantime, congratulations to Las Vegas McCarran.

Don’t Just Talk About It…

Get Ready To Experience The Future

At The 22nd Annual

Get the insights, perspectives, and forecasts you need to take advantage of the emerging opportunities and challenges across the industry…

The IAFS(tm) has set the standard for aviation planning events. It’s focused on data and real business intelligence that no other event delivers.

Two Days of Exploring The Future…

Real forecasts – And Real Planning Insight

The Summit is different. Very different from any other event. As our regular attendees will tell you – when you leave the Summit, you are armed with business intelligence and futurist perspectives that represent real competitive advantages.

The unique approach of the IAFS™ is that attendees have the opportunity to interact with airline and industry CEOs and executives. Instead of a string of panels, the Summit starts with the emerging trends, and we explore them with the presenters from all across the industry and the globe.

Tackling The Future. The Summit does not dance around issues. It’s known for its laser-focus on the metrics and trends that affect all sectors in aviation – airports, airlines, financial institutions, suppliers and labor. The Summit takes on the real issues, as-is, where-is, and with no regard for political correctness.

Whatever area of aviation you’re in, you need to be at the Summit to not only see the future, but experience it. It covers hot button issues including:

How will emerging new airline strategies – in the US and globally – affect traffic patterns and airport capacity needs?

Exploring aviation infrastructure needs – it’s all about intelligent futurist planning… not just building things

And speaking of infrastructure – what about airport funding changes… PFCs? Discretionary? Privatization?

New fleets – how will airlines take advantage of new aircraft capabilities. And what’s the outcome of continued retirement of small jets?

Traffic growth – where will airline fleet and market strategies result in meteoric increases, and how will these shift consumer travel patterns?

Globalization – It’s affecting all of aviation, in all areas of the country. Where are the opportunities for aviation investment?

The new “Parallel Airline Systems” – both in the US with ULCCs and internationally with entities such as Norwegian and Wow will drive tactical direction at incumbents. But where, and how

Not to worry. We’re covering it all. And a whole lot more at the Summit.

Aviation Leaders Will Be At The Summit. Be One of Them. And we’ll be exploring them with the key CEOs and decision makers from airlines across the globe. This year, we’re excited to have participation from

Southwest, Alaska, Spirit, Allegiant, American, United, Air Canada, Air China, Hainan, Hawaiian, TAP, Korean – for starters

As you might guess, the International Aviation Forecast Summit is a very intense two days of gathering new insights and planning intelligence. A lot of “pluses” such as:

Plus: the popular “View from Wall Street Analysts”

Plus: fleet trend forecasts from global aircraft manufacturers

Plus: the comprehensive Airports:USA® enplanement and traffic trend forecasts

Plus: The Boyd Group International Airports:China™ forecasts, outlining opportunities for US airports, communities, and businesses

Plus: Outstanding opportunities for networking with airlines, airports and aviation decision-makers.

The unique approach of the IAFS™ is that attendees have the opportunity to interact with airline and industry CEOs and executives. Instead of a string of panels, the Summit starts with the emerging trends, and we explore them with the presenters from all across the industry and the globe.

Some examples of why aviation leaders join us year after year…

From The Airports:USA Traffic Forecast:  Large US non-hubsite airports will increasingly be in the cross-hairs of EU carriers looking for additional feed for their connecting hubs.

At BGI we outlined this trend four years ago… and as usual, we were alone in the prediction. But since that time, we’ve seen British Airways add Austin and New Orleans to their route map, with more in the pipeline.

At the Summit, we’ll be covering the factors that carriers such as BA and members of the SkyTeam alliance look at when considering a US spoke city. There are a number of key elements that are necessary, most of which traditional ASD forecasting miss entirely. Join your colleagues and get a jump on the opportunities this new trend represents for airports, suppliers, financial institutions and economic planners.

New Trends In Fleet Applications – And They’re Positive. As small jets are phased out – both in the US and across the world, the new economics of larger airliners will have major effects on where airlines assign assets, and how they strategize for the future. In 2012, IAFS forecasts indicated that replacement of 50-seat jets would be mostly positive for air service access in the US. While contrary to consensus thinking, which held that lots of communities would see reduce frequencies and less traffic, the forecast has proven accurate.

Yes, There Will Be Data On China. And, as the #1 forecast firm in regard to China-US traffic and aviation, we’ll be looking at the opportunities that will be in line for both gateway and secondary US airports as this segment of travel matures from gateway-to-bus into gateway-to-connecting flight.

We’re also planning some exciting pre-Summit workshops this year, including one on the economic opportunities for rural US airports. In fact, the IAFS™ Workshop program itself delivers more hard data and planning focus than other conferences in their entirety.

If you have not registered yet, click here to get the early registration rate. We’re at the fabulous Wynn Resort, and our hosts, the Las Vegas Convention & Visitors Authority and McCarran International Airport will be again delivering a super event.

Join us! Early registration rates are in effect – and they represent greater value than any other event. So click here for more information and to reserve your space.

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Let’s Talk About Real Airport Data

We’d be delighted to get more information on a subscription to the quarterly BGI Airport Key Performance Metrics. You’ll be surprised at how cost-effective and valuable it is.

Just complete the form below. In the bottom box, please just indicate you’re interested in more information on our quarterly reports.

Also, please let us know also if you have any specific data needs. One of our specialties is designing custom reports for our subscribers.

Want To Try The #1 On-Line Data Source? We can also arrange for a free trial subscription to on-line Aviation DataMiner, the most advanced and comprehensive source on US airport data and business intelligence. So let us know and we’ll get back ASAP

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Federal Air Service Programs:

They’re Political Footballs, Mostly

Here’s what you won’t hear from other consultants, particularly the ones that feast on selling “air service development” programs…

It is time that federal air service programs were either brought into reality, or cancelled completely. They assume an air transportation industry that no longer exists. As it stands today, they tend to distort the free market and mislead communities away from developing true programs to access the global economy.

In the case of Essential Air Service, it has mostly degenerated into a system where a “hunter-gatherer” operator (one that is mostly in the business of taking on subsidized service, instead of having its own route system) gets paid to fly into a selected airport, simply because the obsolete belief is that just having “flights” is the same as “air service.

Result: hundreds of millions of taxpayer dollars wasted on flights that pander to political ends, not air transportation.

SCASD is built on the assumption that without air service at the local airport, small communities are cut off from the world. It also assumes that there are lots of airlines with the fleets and route systems just waiting for a grant before they enter the market. Both are bogus assumptions.

In fact, it is relatively well-served mid-size airports that have gained the benefits of the SCASD program, which is very positive. But it also shows that there must be other communication modes pursued for small rural communities. The program should be continued, but without the misleading sham that it can bring air service to “small airports.”

Fix Them. Or Cancel Them. Fact: air transportation as a modality today represents hard realities that both the EAS and SCASD programs – not to mention dozens of “air service development” programs – completely ignore.

Let’s take a look:

Reality One: The Airline System Is Not A Mystery. It’s Transparent

In 99% of cases, with the consolidated system of 2017, it isn’t necessary to inflict “market studies” on communities to identify potential carriers – or, in many instances, the non-existence of a potential carrier.

What this means is that in most cases it’s an outreach to the obvious carrier, comparing its strategies and fleets with what the community can deliver. Then should come any further analyses – if the carrier is interested, that is.

Recently, a small airport in the Midwest announced that they were seeking to “lure” carriers – apparently any carriers – to operate flights to Denver and Dallas-Ft. Worth. That certainly doesn’t take a study to identify the targets, although they were probably convinced otherwise.

For a small community, the only option to DFW is the AA system, and to Denver it’s United. End of search. The don’t need the perfunctory consultant voodoo of a “point-of-sale” analysis of “real market study” to discover this.

That’s it, because the local O&D at small and mid-size airports isn’t enough to support nonstops to places such as Denver and DFW without connect traffic, and – something apparently not disclosed to the airport – there are no other carriers in existence with the fleets, the strategy, or the network that would chase after such a route.

But, if the community is advised of these facts right up front, it would shortstop a lot of consultant study revenue.

The same is with the application of EAS and SCASD dollars – it is the responsibility of the community to clearly understand the airline business realities before chasing off to recruit air service.

More importantly, it is the fully responsibility of the DOT to know the airline business and have a reasonable expectation that the intended application has a reasonable chance of success, within the realities of the airline industry, instead of outdated assumptions of an airline system that no longer exists. That is not the case today.

Reality Two: The Goal Is Not Scheduled Service. It’s Global Access

The assumption is made, both within the foundation of EAS and SCASD programs and in many ASD adventures, that having scheduled flights at the local airport is the goal. Wrong.

What missing with this belief is the entire objective for air service in the first place: a transportation option that gets consumers to and from the rest of the globe.

For example, a couple of Cessna Caravans to Nashville might satisfy the local politicians, but it isn’t “air service” because it can transparently connect to nothing – WN doesn’t interline, and no carrier banks flights for connectivity there.

Therefore, most of the EAS program is geared to deliver “flights” and not air access. That must change. If there isn’t an entity that can provide meaningful connectivity, an EAS subsidy is a giant waste of money, and should not be awarded.

This means the criteria for EAS service needs to change from just “flights” to “access.”

Reality Three: Air Travel Is Multi-Modal. And It’s Often More Efficient Than Local Service

Today, the EAS and SCASD programs are based on the assumption that service at the local airport is always more consumer-preferred and consumer-efficient than other options, such as a 60-90 minute drive to another airport.

Flat out wrong – and an assumption that inflicts millions of wasted dollars on the taxpayer.

It’s amazing to see communities convinced to do unscientific “surveys” that generally only ask the question “Would you use the local airport” and then trumpet the results as proof that United or American or Delta, or one of those mythical “other airlines,” should come to town.

Of course there’s nothing in the survey regarding things like schedules, airline brands, type of service v other options, etc., making the whole survey useless.

It’s also a de facto disservice to small communities not to fully disclose what the competitive options are compared to any proposed local service, before doing an “air service development” project. In fact, this should be a prime new criterion for the award of any EAS or SCASD dollars.

In our Air Service Access Workshop presented at the 22^nd International Aviation Forecast Summit, we used Topeka as an example. A SCASD grant was used to support the implementation of two United flights to that carrier’s global connecting hub at ORD.

Unfortunately, the superior air service options open to consumers at MCI effectively rendered the FOE-ORD program DOA. To virtually any destination, the 60-75 minute drive still represented more time-effective transportation than consumers trying to shoehorn their travel to fit the two connecting flights over Chicago.

Apparently, this reality was overshadowed by the obsolete notion that local air service is always preferable. Message to the DOT and to ASD providers: that’s yesterday’s thinking.

Where From Here – Essential Air Service

In the Lower 48, the DOT must immediately re-structure the EAS program to assure that it delivers connectivity, not just scheduled flights. (Alaska is an entirely different situation and should be taken separately from the current EAS program.)

Twenty years ago, at an early BGI Aviation Summit, the point was made that EAS should be for flights to a connecting carrier’s hubsite, on the brand of that carrier.

Today, the only EAS markets that are even vaguely successful are those that meet that very set of criteria.

However, there are clouds even in these cases.

Typically, where there is AA or UA-branded EAS service, it is made possible only by the fact that the operator has some 50-seaters that are excess to their fleet needs and which will be coming off lease. When that happens, these airports are back to the pool of independent, mostly turboprop “hunter-gatherer” operators who are in the business of simply taking on subsidy flying.

What we are ultimately facing is that the EAS program is becoming a financial millstone on the DOT, fully unable to deliver core air service access.

Rural areas need to get prepared now for what is already a reality in many places: other modes of transportation will need to be relied upon. Air transportation does not work, anymore.

For places where EAS money is being wasted due to other and better regional options that consumers are now actually using, such as Muskegon and Pueblo, the hit of losing EAS funding won’t be a hit at all. It’s already been experienced. Consumers are happily driving to  Grand Rapids from MKG and to COS from Pueblo.

But for communities that are truly isolated, such as regions of Wyoming, Montana, Kansas and Colorado, there is a bullet that needs to get chomped on very soon: The air service cavalry is not coming. That means reliance on ground transportation will be the future norm.

Where From Here – Small Community Air Service Grant Program

There have been demonstrable successes with the SCASD program, and Boyd Group International is proud to have assisted clients in gaining over $24 million since the program’s inception in 2002.

However, the SCASD program has never been funded properly, and it is still based on the fundamentally-flawed assumption that every small airport should have scheduled flights. Furthermore, the basic qualifications for submitting a grant are out of date, based on airport passenger rankings of 20 years ago.

Let’s cut to the chase. The ability of a $500K to $1.5 million grant attracting viable air service into a small rural community that has very low population is zero. Zero.

To begin with, there are no airliners that can make it work, anymore. Secondly, as noted with the EAS program, as well as the SCASD experience in places like Topeka demonstrate that the potential for meaningful improvement at rural airports is overshadowed by the realities of the economics of airline operations.

But where the SCASD program has shown success has been at mid-size, relatively well-served airports that have been allowed into the program. Spokane has flights to Los Angeles today because of the SCASD program. Charleston, WV received nonstops to Houston, etc. Here, SCASD has been a success, albeit not for small rural airports.

Therefore the SCASD program should be widened to be one that can be applied for by a wider range of communities. We’ll be blunt: No SCASD grant is going to bring viable scheduled service to Sand Point. But it has opened Bangor to access to United’s hub at Chicago.

That is he lesson from almost two decades of the SCASD program. As a vehicle to get more service to small rural airports, it’s largely been a dud. But for a bit larger, currently-served airports within a shrinking airline system, it’s done well.

Direction: Forget the intention of bringing service to small airports where nobody can use it and where economically-viable connectivity is not possible.

In effect, with past grant awards at places such as BGR, GEG, and CRW, SCASD awards have been consistent with the #1 trend in air service access: regionalization.

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 The New DOT Regime.

Initial Indications Are Uncertain

Major rethinking is imperative at the DOT. New policies. A trashing of the inept NextGen program and replacing it with an accountable and workable program. EAS and SCASD programs in need of restructuring. And more.

The  selectee for DOT Secretary has been there before in a secondary position.

This could be positive – as she knows where the operational skeletons are buried. Or, it could mean more of the status quo.

A challenge that must be immediately dealt with is the rising din in regard to “reforming” the air traffic control system. That in itself is an open issue, but none of the people  – zero, zip, nada, meiyou – who are calling for privatization have ever noted the incompetence of the current system or tumbled to proven the fact – fact – that NextGen is an on-going failure.

The new DOT secretary has said she’s open minded on ATC options. Not necessarily a good sign – we need a very closed mind – one that has a clear leadership direction and solid plans for rebuilding ATC. The committee-let’s-all-discuss approach is the reason NextGen is a failure in delivering demonstrable results in air transportation efficiency.

At this point, we could have a very innovative four years ahead, or just more of the same. The new Secretary needs to come into the job in full metal-jacket mode and take no prisoners.

The DOT at the top has been a repository for political hacks with zero expertise. The current ex-city mayor, for example. Rodney Slater, who was clueless. And how ’bout LaHood? Heck, a freshman at Embry-Riddle would have been much more effective.

This appointee has been there before. We have hopes, given the tone of the rest of this incoming administration, that the past won’t be continued.

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2017 Enplanements –

3.5% – 4.0% Growth, But…

It’s With A New & Emerging Airline Structure

As we will cover at the 22^nd Annual International Aviation Forecast Summit in August, the structure and flows of passenger traffic across the US will represent major shifts in enplanement levels at airports across the nation. Further, the use of airliners will divide between air access, and impulse traffic.

The first represents connectivity to the global economy. The second represent use of aircraft to provide a product that competes with other spend options for consumers’ discretionary dollars.

The Emergence of Impulse-Traffic Airlines. There are now three basic airline business models in place…

The first is the traditional network carriers, where traffic is generally based on air transportation needs. The next is the emergence of ULCCs – Frontier, Spirit, and, increasingly, Allegiant – which tend to create net-new impulse traffic based on low fares and very high cabin density. To be sure, there are fuzzy areas of overlap in the passenger bases of these two airline genres, but the focus of the latter category is mainly to divert discretionary dollars into travel that might otherwise not be taken in the absence of a very low fare.

It’s unclear how these two airline business models will co-exist, particularly as AA, DL and UA attempt to provide a bare-bones “basic economy” fare bucket that delivers a product that mimics that offered by the ULCCs.

The third airline genre are the small-aircraft hunter-gatherer category – the ones with no real route system of their own, but are in the business of flying where a subsidy is available to support flights. This is a valid business model, but in most cases it is not one that’s really focused on air connectivity, but instead simply having flights at a local airport. Flights that in most cases, not many consumers use, such as EAS points.

There’s Air Travel, And Then There’s Air Access. The clear emerging picture is that passenger traffic volume is no longer necessarily indicative of air service access. We’ve used in the past the example of Youngstown. It has well over 100,000 passengers, but it has zero air service access from the rest of the world. It only has impulse leisure service to points in Florida.

Youngstown’s airport gateways are at PIT and CAK, and that won’t change. With shrinking fleets of small jets, American, Delta or United aren’t coming YNG, and shifts in the composition of small carriers-of-opportunity (who are in the business of meeting the expectations of subsidized markets) are not likely to ever deliver fully-connective air service.

This, plus the continued re-fleeting of the First Universe carriers, will continue to result in the majority of enplanement growth in 2017 gravitating to larger airports.

This will further illuminate another major change in 2017…

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2017: Realities Overcome Obsolete “Air Service Development”

The biggest emerging trend in air service in 2017 will be the recognition of airline industry realities in regard to small community air service.

It’s Called Full Disclosure. Fact: if the truth about what the US air transportation system can and cannot do, and the truth about the economics and structure of the airline industry were clearly and honestly imparted to small airports and communities, a lot of “market studies,” and leakage analyses, not to mention the expensive trip to the speed-date event – would be cancelled tout suite.

In 2017, more and more small communities will start to recognize that “air service” is not just having scheduled flights at the local airport.

The future is assuring that the region has air access from the global economy, and by the nature of air transportation economics, that means in many cases it is not possible to support viable, consumer-useable air service at the local airport.

The Players In The Airline Industry Don’t Need A “Study” To Be Identified. Fact: any “ASD” program that doesn’t start right out by revealing the realities and structure of today’s air transportation system, is clearly and distinctly withholding key information from the client. That is not professional. It is not beneficial to the client, and in fact, any consultant should know better.

The carriers that have the systems, the networks, the fleets and the strategies that might fit with addition of service to a small community are as obvious as a blemish on prom night, right from the start. That’s go-no-go on doing an further work. Otherwise, the community is just being led into the woods. But it’s not surprising. Full disclosure is sometimes has a wide definition. We found one entity noting its corporate offices at a street address with an office suite number. It turns out that the address is the local post office and the “suite” is just a post office box.

The Examples Abound. Chasing studies before full understanding of the airline industry can be a dead-end. We’ve seen it demonstrated in service failures at Topeka, Modesto, Youngstown, Bowling Green, for starters. Lots of money spent on ASD studies, but the economic and consumer aspects were not explored. The entire necessary analyses of competitive-connectivity – which is a fundamental component of the viability of an air service route – are usually left out.

In 2017, More Communities Will Refocus On Access, Not ASD Schemes. Politically-demanded “air service” is often what consumers can’t use, and often not competitive with other air access options local consumers already have. But the hard realities that caused the failure of these doomed-from-the-start local air service attempts were clear.  The communities simply were not clearly and functionally made aware from the start that the economics, operation, and structure of the air transportation system are often galaxies away from what they may assume to be the case.

It is a consultant’s responsibility to make them aware of this before that 60-page magnum-opus study is done. The current trend of doing a “study” to “lure an airline” before fully disclosing to the client exactly what those airlines are, and whether they have the fleets and strategies to make service viable,  is the same as convincing a community to build an off-and-on ramp before telling them if there’s a highway there in the first place. In short, it’s snake oil.

Bottom line: In 2017, more and more small communities will begin to see beyond the snake-oil studies, and refocus on assuring that they have air access channels from and to the global economy. That will in some cases mean the need to re-think multi-modal access via regional airport gateways.

Topeka, noted above, is one such example. Today, the air access for the region is via MCI, where there are over 50 flights daily, and – truth be known – consumers from Topeka have better, more-time efficient air service than what can be supported at FOE.

Regardless of any pandering studies, the fact is that the consumer and the realities of air transportation economics have combined to make Kansas City Topeka’s gateway from the globe.

What this means: rural communities will start to re-think two key areas. The first is the business development potential of their local airport.

The second is to bluntly review development of air service access to their region – and it’s not always going to be at the local airport.

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Cuba Air Access – Reset Coming In 3Q

As is being already experienced, the expectation of “pent up demand” for Cuba air access was in large part travel industry hype.

It’s near certain that by the start of the third quarter of 2017, a lot of the service awarded to secondary airports in Cuba will be cut back materially or terminated completely.

For example, there is no data to show that there’s enough demand from the US to Santa Clara to support daily 737 capacity. Most Americans are clueless about the place, and Cubans can’t travel freely out of the country, and there isn’t much there except some monuments to Che Guevara’s birthplace.

As we covered in the Cuba Workshop at the 21st International Aviation Forecast Summit, having Cuba route authority represents a huge future airline asset. Cuba has enormous – actually, incredible –  potential as a destination of US leisure travelers. But the emphasis is  on the word future.

Let’s be clear and forthright, instead of politically-correct: unless the current government system that has trashed Cuba into the Fifth World moves on to the happy hunting ground, the “pent-up demand” stuff is just irresponsible blather.

No question it will change, but any of this drivel about flights right now bringing “better understanding” between the two countries is nonsense, particularly when the folks on one end of the conversation can’t – and don’t dare – speak freely.

This is the airline business, and being “politically-correct” is something that carriers cannot afford.

Cutbacks coming.

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Airport Infrastructure Investment – Vanity Projects?

The new president has claimed our airport system is Third World. He’s planning to spend lots of money on airport infrastructure.

The danger here is having better airport facilities confused with attracting better air service. There seems to be a lot of nonsense among politicians, and the monkey-hear, monkey-repeat media sectors that just building new terminals will increase local air service.

We saw this in September, when Elmira was given a $40 million state grant for new terminal and other facilities. The clear statements from the folks in Albany was that this would attract “more airlines” to the ELM market. It’ll reduce costs, see, and that will attract more flights from all those airlines out there.

American, United, and common sense didn’t get the memo. The two airlines left the market – and it had nothing to do with airport facilities.

It’s more illumination of the point made above – politicians, civic leaders often are living in a dream world when it comes to the raw economics of air transportation.

There are very real needs for more airport investment – but this is not going to reverse air transportation economics.

It will be very interesting how this process will be approached.

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EU Carrier Invasion of US Heartland.

In the past year, Boyd Group International was honored to have assisted New Orleans International in recruiting new flights to London on British Airways and Frankfurt on Condor.

Our forecast methodology focused on the different multi-modal structure of international traffic compared to domestic generation. For example, BA will be using MSY, but the service catchment area is based on much wider “road hubbing.” Example, the drive to MSY from Gulfport to get to London is actually faster than flying from the local airport and connecting at ATL.

Over the next five years, this will be the focus for new LHR flights – mostly via British Airways – at targets such as CVG, IND, MEM, SMF and several other non-hubsite large commercial centers.  There will be also interest in these airports as feed-generators for the SkyTeam hub at CDG and the Star Alliance hubs at MUC and FRA.

And we haven’t mentioned the Chinese carriers looking for US access. The traffic dynamics are entirely different from the EU, but standby for some interesting new entry in the next 36 months.

Airport alphabet groups in Washington, keep pushing for LHR pre-clearance. FRA and CDG, too.

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For More, Join Your Colleagues At The IAFS!

On August 26-29, aviation leaders will gather in Las Vegas for the 22nd Annual International Aviation Forecast Summit.

Issues such as those above are just the tip of the Summit’s scope. We don’t dance around issues – our incisive discussion format with decision-makers across the industry and across the globe delivers insight and business intelligence not found at any other event.

Register now by clicking here… SPECIAL EARLY REGISTRATION RATES NOW IN EFFECT.

The China Ni Hao/BGI McCarran Program

One Example of The China Ni Hao Approach

Probably every major airport in America will claim to have a “China ready” program.

But typically they only go part of the way – focusing on cultural training, with insufficient attention to the #1 reason to be “ready” – getting these guests through airports and other venues comfortably and with respect.

Culture Training Is Great. But There’s More. The China Ni Hao/BGI China-Welcome™ programs from China Ni Hao are focused on functional approaches to accommodating travelers from the Middle Kingdom.

Example: The McCarran International Airport

So, we’re proud of our part in making Las Vegas McCarran International the nation’s first airport that proactively and demonstrably is China-Welcome ™.

The China Ni Hao/BGI program at McCarran is engineered to assure that Chinese visitors feel comfortable and valued. The goal is to enhance communication on all levels of the airport-customer interface.

Digital Outreach & Information – In China. The McCarran program engineered by CNH starts in China.

Functionality means giving Chinese visitors the informational tools they need to make the most of their visit. Airports can be very challenging to new arrivals – particularly if they do not speak English. Take a look at just about any US international gateway airport – what Chinese signage is there is rudimentary and often laughably-translated.

McCarran is way beyond that. The Airport understands that word of mouth is one of the biggest generators of international destination decisions in China. That means making McCarran not only easy to use, but to make sure that Chinese visitors know that they can start their US itinerary more comfortably at LAS than any other US gateway.

Furthermore, now that more and more Chinese visitors are on individual itineraries, instead of guided tour programs, the need to make airports more China-friendly is becoming greater by the day.

S0, even before they leave China, McCarran International is already “in their pockets” with the most advanced, comprehensive and user-friendly WeChat app of any US gateway.

WeChat now has over 700 million users in China and is its most popular app. McCarran has developed a comprehensive WeChat mini-site designed to familiarize Chinese visitors with the airport before they even leave China and to give them a unique navigational tool once they arrive.

It is fully interactive and covers everything at the airport – directions, customs requirements, security procedures at the screening checkpoint – even a discussion of how dogs are used by the TSA to be “partners” in keeping our flights safe.

It also contains a complete directory of services, including ground transportation, concessions, and information specific to making their visit more enjoyable. All accessed via McCarran’s QR code, which is available in China, on the Hainan inbound IFE, and posters with the QR code in the Airport.

Personal Outreach: Welcome Ambassadors: McCarran International’s Chinese visitors will be greeted and assisted by the nation’s first fully-dedicated program of Huanying Ambassadors.

These Mandarin speakers, sporting easily identifiable red sweaters, will accompany Chinese visitors as they process through both arrivals and departures at McCarran.  All Mandarin speakers, they are in place to provide direction and welcome to these arriving and departing guests.

Signage and Wayfinding:  On arrival and departure, Chinese visitors will feel welcome and comfortable with the wayfinding system at McCarran.  

At key communication touchpoints, they will be proactively guided through the airport with informative signage and navigation mechanisms. This includes directions to log on to the Airport Wi-Fi and a QR code to connect directly to the airport’s WeChat app.

Today, McCarran is one of the few – possibly the only – US airport that has permanent signage to guide Chinese passengers at the security checkpoints. And the only one that has professionally-accomplished signage and wayfinding along the processing paths – inbound and outbound.

Concession Ready: McCarran has worked with its concessionaires to implement key programs such as acceptance of UnionPay cards (largest credit card in China) and development of items like menus in Chinese.

Attention to Detail: The program is built to address the anticipated needs of the Chinese traveler such as explanations on the WeChat app of the differences to expect in security processing and customs and even the availability of SIM cards for Chinese mobile phones. McCarran will monitor their Chinese passengers and add other items, as required, to ensure the system is updated to meet future requirements of these visitors.

About China Ni Hao

China Ni Hao provides a range of programs that give communities, regions, states and airports the necessary tools to attract Chinese visitors, the largest growth sector and the biggest spenders in leisure travel.

The China-Welcome™ program will give destinations a competitive edge in attracting Chinese visitors and delivering a seamless experience throughout their stay. China Ni Hao develops complete marketing programs from itinerary development to the creation of digital promotional campaigns, in China, to sell not just destinations, but specific packages, with measurable results.

More on China Ni Hao can be found by clicking here.

The Next Dimension In International Gateways

McCarran International:

America’s First Fully Functional China-Welcome Airport

On December 2, history was made – twice – at Las Vegas McCarran International.

The first milestone was the arrival of the inaugural Hainan Airlines flight from Beijing.

The second was that the passengers deplaned into America’s first fully-functional China-Welcome™ airport gateway.

This is a real milestone, and one that will be an example of how airports can engage in successful outreach for China access.

Click Here for details on how China Ni Hao and BGI deliver programs that focus on capturing more of this strong traffic at airports across America.

Supersonic Transport:

Moving From Ambient Thinking To Futurist Planning

On November 15, 2016, the expected and accepted future of intercontinental air transportation got torpedoed.

Not necessarily a surprising event, particularly for the attendees at the 21st Boyd Group International Aviation Forecast Summit last September, where Boom Technologies outlined the next step in air transportation.

Last week, the future started to arrive. Boom Technologies rolled out the full-scale model of its XB-1 supersonic demonstrator. It’s a one-third scale of its planned 45-50 seat Boom Airliner that is well under development.

The concept is a 2.2 Mach intercontinental airliner that will carry what is today front-cabin passengers across the Atlantic and Pacific in less than half the time of current airliners – and do so at fare levels commensurate with today’s business class prices.

The potential viability of the Boom concept was underscored by the range of leading aviation entities in attendance. General Electric, Honeywell, Rolls-Royce, NASA. Everyone was also honored to have the presence of some of the original engineers who actually were on the Concorde project many years ago.

Think of It Like The Front Cabin of A 777 That Flies Supersonic. Unlike the Concorde, the Boom Airliner is not envisioned to be one that will cater only to thin layers of high-roller traffic, paying an astronomical fare. Instead, the Boom Airliner simply will capture existing front-cabin traffic, at ambient premium fare levels.

No, there will not be full-flatbed seats with lush duvets for sweet dreams while crossing the ocean. No double-meal catering.

There won’t be time for these amenities – which are there only because the consumer is trapped in the 777 for eight hours. Lovely, lush, and comfortable. But there are two considerations: first, it costs the airline tens of millions to develop and deliver these amenities, and second, the time in the air allows this “entertainment.”

The Boom Airliner will not inflict the need to have seating that takes up the space of a suburban Japanese garden, and chairs that cost as much as a small tract house in rural Ohio. The need to stock several phases of gourmet food into galleys with the complexity of a McDonalds, will be an expense that also won’t be necessary.

With a just over three hours between New York and London, the service will be more like domestic first class.

The Passenger Segment Already Exists. The Boom Airliner will simply capture the current folks sitting in the front end of 777s, A-330s, and 767s. The premium customer will have two choices – ride an extra three or four hours and get a four-course meal finished off with creame brulee en crute, or be in London to do business three hours earlier.

It’s a no brainer. This airliner is going to change how premium customers fly. It will be a challenge to future airline strategies.

It also means that the intercontinental airlines that are first-to-market with this new airliner, will drain this premium traffic from competitors – regardless of frequent flyer loyalty. And by the way, that first-to-market carrier is already on the horizon: Virgin Atlantic has an option for the first ten Boom Airliners, expected to come off the assembly line starting in 2023.

The Concorde Experience Is Ancient History. And Ancient Technology. It’s understandable that a lot of folks in aviation are commenting that the Boom project is just another pipe dream. After all, they point out, the Concorde was a financial fiasco. In point of fact, this observation regarding the British-French product is entirely accurate.

Here’s fact: next year will mark the 50th anniversary of the roll-out of the Concorde. It didn’t fly for another 18 months, but the fact remains that the airplane against which  some people are measuring the Boom Airliner is approaching senior citizen status.

While Concorde was a techno-marvel for its time, it stands as an example to incredibly closed-minded and poor market planning. In fact, it’s earned a place in a great book titled World’s Greatest Planning Disasters.

The Boom aircraft is different from the Concorde: it is based on solid market vision, solid planning, and solid assumptions. And there is no government hubris involved – which was a major factor in the Concorde program. It’s all about business, not misguided national pride.

Re-Thinking Reheat. In addition, the comment also is made that there is no existing power plant adaptable to the Boom Airliner. Some of the folks parroting this nonsense couldn’t tell the difference between a jet engine and a Studebaker V-8.

One of the key advantages of the Boom Airliner is that it does encompass an existing engine core, and can attain 2.2 Mach without use of an afterburner – also referred to as “reheat” by engineers in the Mother Country. Here’s an ice-breaker conversation starter for the next boring cocktail party: when in afterburner, Concorde burned 78% more fuel, and for all that it gained just 17% more thrust.

So to compare the Boom Airliner to the Concorde is flat ridiculous. To maintain that the Concorde proved “it couldn’t be done” is akin to the folks who probably told Lindbergh not to take off, because so many others had splattered themselves trying to cross the Atlantic.

As an aside, one of BGI’s colleagues, Fred Johnson, was a trained mechanic instructor on the Concorde, when Braniff operated the aircraft in 1978-80. His take on the Concorde was that it was some of the finest examples of the best of 1960s technology.

Point: In September, at the IAFS, the world got a glimpse of the future of intercontinental air travel.

On November 15, it became official: Supersonic is the future.

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Moving From Ambient Thinking To Futurist Planning

On November 15, 2016, the expected and accepted future of intercontinental air transportation got torpedoed.

Boom Technologies rolled out the full-scale model of its XB-1 supersonic demonstrator. It’s a one-third scale of its planned 45-50 seat Boom Airliner that is well under development.

The concept is a 2.2 Mach intercontinental airliner that will carry what is today front-cabin passengers across the Atlantic and Pacific in less than half the time of current airliners – and do so at fare levels commensurate with today’s business class prices.

The potential viability of the Boom concept was underscored by the range of leading aviation entities in attendance. General Electric, Honeywell, Rolls-Royce, NASA. Everyone was also honored to have the presence of some of the original engineers who actually were on the Concorde project many years ago.

Think of It Like The Front Cabin of A 777 That Flies Supersonic. Unlike the Concorde, the Boom Airliner is not envisioned to be one that will cater only to thin layers of high-roller traffic, paying an astronomical fare. Instead, the Boom Airliner simply will capture existing front-cabin traffic, at ambient premium fare levels.

No, there will not be full-flatbed seats with lush duvets for sweet dreams while crossing the ocean. No double-meal catering.

There won’t be time for these amenities – which are there only because the consumer is trapped in the 777 for eight hours. Lovely, lush, and comfortable. But there are two considerations: first, it costs the airline tens of millions to develop and deliver these amenities, and second, the time in the air allows this “entertainment.”

The Boom Airliner will not inflict the need to have seating that takes up the space of a suburban Japanese garden, and chairs that cost as much as a small tract house in rural Ohio. The need to stock several phases of gourmet food into galleys with the complexity of a McDonalds, will be an expense that also won’t be necessary.

With a just over three hours between New York and London, the service will be more like domestic first class.

The Passenger Segment Already Exists. The Boom Airliner will simply capture the current folks sitting in the front end of 777s, A-330s, and 767s. The premium customer will have two choices – ride an extra three or four hours and get a four-course meal finished off with creame brulee en crute, or be in London to do business three hours earlier.

It’s a no brainer. This airliner is going to change how premium customers fly. It will be a challenge to future airline strategies.

It also means that the intercontinental airlines that are first-to-market with this new airliner, will drain this premium traffic from competitors – regardless of frequent flyer loyalty. And by the way, that first-to-market carrier is already on the horizon: Virgin Atlantic has an option for the first ten Boon Airliners, expected to come off the assembly line starting in 2023.

The Concorde Experience Is Ancient History. And Ancient Technology. It’s understandable that a lot of folks in aviation are commenting that the Boom project is just another pipe dream. After all, they point out, the Concorde was a financial fiasco. In point of fact, this observation regarding the British-French product is entirely accurate.

While Concorde was a techno-marvel for its time, it stands as an example to incredibly closed-minded and poor market planning. In fact, it’s earned a place in a great book titled World’s Greatest Planning Disasters.

Re-Thinking Reheat. In addition, the comment also is made that there is no existing power plant adaptable to the Boom Airliner. It’s a comment made by folks who in reality couldn’t tell the difference between a jet engine and a Studebaker V-8.

One of the key advantages of the Boom Airliner that it does encompass an existing engine core, and can attain 2.2 Mach without use of an afterburner – also referred to as “reheat” by engineers in the Mother Country. Here’s a ice-breaker conversation starter for the next boring cocktail party: when in after burner, Concorde burned 78% more fuel, and for all that it gained 17% more thrust.

Here’s some reality: Next year marks the 50th anniversary of the roll-out of the Concorde. That’s half a century ago.

To compare the Boom Airliner to the Concorde is flat ridiculous. To maintain that the Concorde proved “it couldn’t be done” is akin to the folks who probably told Lindbergh not to take off, because so many others had splattered themselves trying to cross the Atlantic.

As an aside, one of BGI’s colleagues, Fred Johnson, was a trained mechanic instructor on the Concorde, when Braniff operated the aircraft in 1978-80. His take on the Concorde was that it was some of the finest examples of the best of 1960s technology.

Point: In September, at the IAFS, the world got a glimpse of the future of intercontinental air travel. On November 15, it became official: Supersonic is the future.