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BGI Assists Ithaca In Pursuing Larger China Presence

Spearheaded by Ithaca Tompkins Regional Airport, and sponsored by the Tompkins County Chamber of Commerce, Visit Ithaca and a host of local businesses, BGI and its partners at China Ni Hao, LLC recently delivered a comprehensive China-Welcome™ Symposium to civic leaders in Central New York.

The region is already one of the most Sino-aware in the nation, with over 2.000 local Chinese students and faculty combined at Cornell and Ithaca College. BGI’s Airports:China™ data indicate over 58,000 annual O&D between Central New York and China, with approximately 50% captured at Southern Tier airports.

The Symposium Team delivered data, information and consulting regarding the evolving nature of the China travel situation, including shifts in demographics and the expectations of Chinese visitors and potential Chinese considering attending US universities.

China-Welcome™ Is Needed In China, Too. BGI/CNH China-Welcome™ Symposiums are different from other “China ready” programs, in that our team understands that efforts must be made on both sides of the Pacific to be competitive.

so, the Symposium illuminates what communities can do to be more competitive to attract more Chinese traffic. We discuss cultural differences, effective wayfinding techniques, and the need to have brochures in Chinese to inform visitors of US-specific travel factors.

Professional Communication. The Symposiums are specifically tailored to the situation at each client. However, one thing we always advise against it having any Google or machine translations of the local website, which are so inept as to be outright insulting. It conveys that the venue is sloppy and unprofessional. Always have materials created in Chinese, and never “translated” from English.

Every Region Has A China Opportunity. BGI/CNH have delivered tailored China-Welcome programs at communities of all sizes. There will be over 23 million leisure visitors from China in the next five years – and where they will visit will be determined by the level of awareness they have of communities and regions.

If your region is interested in moving ahead of the competition for this business, give us a call.

Air Service Planning Assumptions – Unhinged

Traditional thinking. Historical experience. DOT-reported data.
And of, course reliance on what “everybody knows.”

These approaches are leading a lot of today’s aviation planning into the deep weeds. They’re the very foundation of most of what is passed off today as “air service development.”

And they are increasingly bogus in dealing with the future.

Traditional Air Travel Concepts Getting Ignored. In the past few weeks, air transportation news has been tush-deep in route announcements from ULCCs that represent outright burn-‘em-at-the-stake-heresy in regard to the accepted norms of air service planning.

Allegiant. Frontier. Spirit. They are directly standing counter to the norms we once held dear. The ones we’ve always found as bedrock planning. These airlines are being very disruptive.

Harrisburg-RDU nonstops… With A-320s?  Yikes! Or, Syracuse – Nashville? And more.

Nonstops operated with 160+ seat airliners just 2-3 days per work week?  And not even in leisure markets.

Goodness, whatever are these carriers thinking?

Friends and neighbors, these are absolute anathema to the sacred foundations of air service planning. No way there’s enough demand to fill those flying machines… we have the sources to prove it, right?

Quickly, let us repair to the sacred scripture – a.k.a., DOT O&D tables – and gain enlightenment to counter such ULCC blasphemy against accepted “air service development” norms. We all know that these data – coming from the deep maws of the federal government – are the horn of truth, right?

Relief! The data are beyond being clear.

See, as just one example, they tell us that there are not enough passengers reported daily each way between MDT and RDU to fill one and a half rows of seats on that airliner. Literally.

There’s A New Travel Paradigm – One That’s Consistent With Consumer Shifts. But these flights are coming, and they are not being scheduled by folks who just fell off a turnip truck.

What this represents is what Boyd Group International has identified as the new “unhinged” aviation future.

Here’s a fact: the traditional air service thinking, as well as accepted planning and forecasting methodologies, have become unhinged from the past. There is a new emerging air transportation market…and we’re seeing the start of it.

The Oracle At DOT – A Lot Of Smoke From Yesterday. Let’s start with this tidbit of iconoclasm:  DOT data is merely reflective of air transportation based on a set of complex factors, and determined largely by what airlines are offering.

These data have little to do with illuminating “demand” – because air travel is not like taking the rainfall in the Midwest and then being able to forecast the water flow on the Mississippi.

Air Travel: A Consumer Spending Option. No longer can air traffic forecasts be founded on the assumption that passenger levels are merely the caboose on the GDP growth train. We’ve been slowly unhinged from that since airline deregulation, 40 years ago.

True, GDP projections are the traditional way of forecasting. But it’s now completely outside of air transportation system realities. (Sorry, FAA. Your annual reports look very nice, but they are Alice In Wonderland compared to the real world.)

The number of consumers who will take to the skies, to the contrary, is based on a lot of variables, and DOT data only reflect (often imprecisely) the results of the travel channels that exist.

What that means is that the data are not reflective of what could be, should some fundamentals of air travel be shifted.

Shifted – like tossing day-of-week flights between mid-size cities within a region.

It’s Total Travel Time That Counts. Let’s consider this: air travel choices are made based on issues of convenience, cost, and – missed in a lot of the ASD schemes foisted on smaller airports – the travel-time factor, i.e., how long the total trip will take.

Like we’ve seen in failed attempts to bring local network airline service to places like Laughlin, Youngstown, Cheyenne, Naples and others, it’s the total travel time that is what drives consumer choices.

It’s not the location of the local airport, either. A 60-minute drive to MCI from Topeka to get a nonstop flight is time-superior to shoehorning an itinerary to accommodate two local departures making a connection at ORD. Been there, done that.

That same overriding consumer dynamic can also apply to the attractiveness of future of mission applications such as we’re seeing coming from Frontier, Spirit and Allegiant. The travel-time superiority is demonstrable, and that could override the concept of frequency.

Travel Decisions May Adjust To Superior Elapsed-Time Schedules. Let’s take the BNA-SYR market. There could be a lot of demand in that market, if the travel-time and cost factors were significantly better than the current hub-connect options. We don’t have any historical data to prove it one way or another.  It’s up to the consumer in each affected market.

And, we all assume that convenience drives a lot of the travel decisions. We assume that one or two weekly round trips won’t be convenient. Really? Compared to a circuitous connection over ORD?

What is to counter the argument that, faced with time-gobbling and expensive hub-connect options, consumer travel patterns –and business meeting schedules – might shift to accommodate the existence of a nonstop, low fare flight on Tuesdays and Thursdays.

This is not to imply that all of these new markets will be a success. But it is to say that there may be a whole air system developing. It’s what Boyd Group International has defined as the Parallel Airline Universe.

Get A Jump On The Unhinged Aviation Future. Enough talk. The fact is that we are at a major turn in the air transportation system in the US, one that addresses functional and time-barriers to getting between major points.

One that, carefully crafted and applied, may create enormous additional air traffic.

On that is completely unhinged from traditional thinking.

So, if you’re interested in getting up to speed on this, join your colleagues at the International Aviation Forecast Summit, August 19-21, and get the straight facts from the CEOs and executives driving this change.

We’re honored to welcome Barry Biffle, CEO of Frontier… Robert Fornaro, CEO of Spirit. Jude Bricker, CEO of Sun Country. Lukas Johnson, SVP of Allegiant. Plus Andrew Watterson, EVP of Southwest… and this is just part of the line-up.

We’ll have one-on-one discussions with these and other airline executives from across the globe.

Hosted by Denver International Airport, you can register by clicking here.

And bring your staff, too… it’s two days of solid data, forecasts, and new perspectives that no other aviation event can even get close to.

Make Security Incompetence Great Again!

Let’s Toss More Money At The TSA

The airline industry alphabet groups are on the warpath…

They should be. The Administration is proposing to add more ticket fees to fund the TSA.

This is essentially the same as tossing the money down a rat hole. Maybe worse… at least the rats could make a nest of it. The TSA management is a national embarrassment.

The management of the Transportation Security Administrarion has been a consistent embarrassment, right from the start, when the first TSA Administrator spend a reported $400K right up front to redecorate his office. Then the millions spent on screening devices that the TSA ultimately had to pay somebody to take away as scrap. And the proposed 16,000 staff is now well over 60,000.

Then the reported 80% to 96% failures in screening accuracy – which the TSA tries to keep secret, and which is just taken as a blip in what they call “layered” security.  Layered like a roll of Charmin.

Message To The Oval Office: What the TSA needs is a complete floor to ceiling management clean-out. They don’t need more money.

Surprising. As a tough businessman who is known for demanding results, it is incredible that Trump would support more consumer dollars diverted to a bureaucracy that is famous for incompetence.  Like out-of-control spending, no accountability for failure, and no comprehensive anticipative “security” beyond screening for pointy objects.

The same Administration that touts how a new tax program will put more money into consumer spending now wants to hit up airline passengers to give some of it back… without any justification.

Media reports indicate that some of the inhabitants of the Marble Playpen, a.k.a. congress, are thrilled with the proposed fee, because it’ll buy more whiz-bang airport contraptions that’ll weed out more proscribed items in carry-on luggage.

The fact that incidents such as the baggage area shooting at Ft. Lauderdale and the electrical failure at Atlanta prove that the nation has no cohesive and professional post-event security and crowd protection whatsoever, isn’t a concern, apparently.

Paying For Things Make Sense… Unless They’re Losers. This whole TSA issue runs counter to several otherwise-valid points made by the Administration:

Strong arguments can be made for increasing the PFC cap – because those bucks are tightly controlled and are 100% beneficial in funding logical infrastructure.
Strong arguments can be made for curtailing much of the Essential Air Service program… which is mostly funding flights that have no utility at all and which consumers won’t use.
But the willy-nilly suggestion to add more fees for a bureaucracy that’s proven to be a financial and administrative cesspool is nothing short of irresponsible.

And misuse of taxpayer dollars.


US Air Service Policy & High Speed Rail…

A Lot In Common, Besides Ignoring The Future

In various media stories this past week, there were a couple of nasty wake-up calls in regard to US communication planning for the future.

Passenger transportation is part of the communication system, but today it’s still considered anything but. Every other mode of communication has evolved and conformed to new technologies and new consumer patterns.

In the USA, conceptual planning and policy, however, is working hard to make sure that passenger transportation systems don’t evolve consistent with these new dynamics, but instead stay comfortably in the context and needs of the 1950s.

Wake Up Call #1 – California’s Obsolete High Speed Rail Program. We had the revelation last week that the planned California high-speed rail boondoggle continues to come off its financial wheels. Now, it seems that the estimated cost of the first planned 119 miles has jumped from a promised $6 billion to over $10 billion.

That involves only about 20% of the total mileage planned, and is only for a section that’s mostly in rural areas. The other 80% should be lots of financial fun.

Wake-Up Call #2. Local Small Community Air Service. The second wake-up call was the message conveyed in several media stories of small community airports planning to attend “speed date” events to “lure” more airlines to town.

Now, we’re referring to the many small airports that have no airline targets in particular. No specific connectivity contemplated. The goal is just to get in front of the supposed faceless mass of carriers that can put a scheduled flight at the gate – regardless of where it’s headed.

Two Different Modalities. The Same Ostrich-Level Planning. High speed rail on one hand and the “need” for air service at local airports – these two seemingly disparate areas are really part and parcel of a single major issue:

Much of America’s infrastructure planning is about passenger transportation, instead of the futurist imperative of developing new forms of efficient communication. Transportation is just a part of the total communication system, and it is imperative that it be planned consistent with changes in other areas of communication – changes which alter the utility and value equation of passenger transportation.

In the case of high speed rail as well as that of air service at local small community airports, the flaw is the same: they both assume that consumer travel and communication trends are static. The both ignore new communication trends, as well as alternative consumer options.

Indeed, high-speed rail and much of the efforts to bring scheduled air service to some small community local airports have a lot in common: they are based on obsolete assumptions that gravitate around obsolete thinking and dead technologies that actually inhibit America from moving aggressively into the future.

High-speed rail – as planned in California – is as outdated as trying to re-establish passenger riverboats on the Mississippi. The cost issue – which almost universally originates with “studies” that are about as credible as a rigged carny game – represents a barrier that in most cases makes the whole concept a joke.

Then there is the nonsense about “high speed” – defined as over 200 miles per hour average.  If it’s a line between, say, Las Vegas and Los Angeles, with no stops through the uninhabited desert, then it might work – assuming that the “Los Angeles” end of the line isn’t a two hour drive from, well, Los Angeles.

But between Los Angeles and San Francisco, or Chicago and Minneapolis, only someone just back from Pluto could believe that the politicians at every town on the route won’t demand it stop there. That will kill the “high-speed” part. Hint: it takes a lot of distance to get a train up to 200 MPH and a lot more to get it back down to stop at East Cupcake.

Now, related to this is the issue of small community air service. Today, most of the discussions, planning, and “accepted thinking” in this regard focuses on “small airports” – and not on solutions for assuring rural access from the global economy.

That’s the giant fly in the current planning ointment – the sheer political nonsense that it’s all about keeping service at the local aerodrome, and not on looking to keep rural America connected to the global economy.

And that’s where the “speed date” event comes into play. It can be massively misconceived as a panacea for small airports, when there is no such future for re-establishing air service.

Let’s be clear: most of these speed-date get-togethers have clear and demonstrative benefits. To have the opportunity to tag up with a carrier that is already in town, or has a clear corporate strategy that makes sense for new service, is a very cost-effective way of building future communication.

But too often, small communities get hornswoggled into going to one of these events with virtually no understanding of the structure of the airline industry, or with the misguided notion that they will find an airline – any airline – to fly to town. It’s just to talk to the supposed faceless mass of airlines, and convince one or two to start service.

To fly to where? Many of these small communities come to the event not really sure, except that maybe a recent “market analysis” clearly showed that a lot of people want to go to Washington… or Dallas… or Chicago. No scientific data, and zero research on the existing consumer alternative options that will compete with the supposed point-to-point 9-seat departures at the local airport.

Sometimes this expensive misconception is just local lack of understanding of the structure and economics of air transportation. And, sometimes it’s the result of semi-ethical “studies” that fail to advise the client of the realities of air transportation. But, boy that $20K report has lots of cool data and charts and heat maps.

To state it bluntly, a large part of today’s air service development schemes is based on making sure no mention is ever made regarding the structural realities of the air transportation system – the most egregious being hiding the fact from small communities that there isn’t a giant pot of airlines at the end of the speed-date rainbow. To do otherwise would kill off the project.

That’s not any different from much of the body of “studies” of the potential for high-speed rail. Key realities, such as the low-balled cost estimates, the political pressures, not to mention the dismal economics, tend to get glossed over amid flashy pictures of racy locomotives and glorious claims about reducing “carbon footprints” or vanquishing “climate change.”

Also not considered is whether ridership estimates are within several galaxies of reality. Travel patterns change. Just take a look at air markets such as DAL/DFW- Austin, or ALB-BUF. You can take it to your bookie with confidence that the passenger volumes are directly out of fantasy land.

The Future Is In Building New Communication Channels. Local Air Service May Not Always Be A Part of It. The chase after “high speed rail” is a blood-brother to the bogus and obsolete – and impossible – concept of keeping air service at every local airport.

Regardless of the political and trendy stories and fantasies surrounding these issues, economic gravity cannot be reversed.

Let’s Move Transportation Planning Into The Future. What US planning needs to focus on are the levels of communication that regions of the nation have with the global economy. In some cases, there will be huge challenges – particularly on the relatively few cases where the population bases cannot support even regionalized air access.

We need to candidly recognize that tossing airplanes into small airports at communities where consumers have better alternatives, or building rail lines that are based on past travel and communication modalities, are heading the US into the past, not the future.

Join Us For More Straight Talk. Naturally, this isn’t consistent with “consensus” or “ambient” thinking. But it does open issues that a lot of folks in public policy planning aren’t too keen to discuss.

On August 19-21, at the 23rd Boyd Group International Aviation Forecast Summit, we’ll be openly exploring these and other global issues that will affect aviation planning.

As our regular attendees know, this event does not allow political correctness in the door. The industry leaders from across the industry and across the world will be there to tackle the issues that will shape how aviation will evolve as part of the global communication system.

For more information, and to get the special New Year’s registration rate, click here.

Congratulations To Las Vegas/McCarran

America’s Only Truly Functional China-Welcome™ Airport

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

A notable event, one year ago.

But even more notable to the arriving passengers was the welcome they received – a true China-Welcome™ program that guided them from the greetings in Mandarin from a team of uniformed 欢迎大使 -Huanying (Welcome) Ambassadors – at the jetway, who then guided them all the way through the arrival process.

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

When the Hainan Airlines flight departed back to Beijing, the Huanying Ambassadors were at the security check points and at the gate to assist as well.

Kudos to LAS. The program is now into its second year.

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

Circulating in the lounge area, they politely ask passengers if they would share their opinions of their visit to Las Vegas. While anecdotal, the information is very valuable in ascertaining ways of better accommodating consumers in the Middle Kingdom, as well as prepare outreach to other Chinese airlines.

LAS – Leader In Innovative China Outreach. In addition to this local outreach, LAS 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 the world, and there are 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 tool as well as a forum for airport concessionaires to offer Chinese menus and special promotional offerings.

In fact, 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™. While 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. At LAS, the uncertainty and anxiety of Mandarin-only speakers are aggressively addressed. To be blunt, Mars probably has better Chinese wayfinding than most US international gateways.

With an expected 26 million visitors expected from China 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.

We’re Ready To Assist You In A China-Outreach Program. 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. For more information on the range of cost-effective channels we offer, click here to the China Ni Hao website.

In the meantime, congratulations to Las Vegas McCarran.

Update – November 27, 2017

TSA Fails 80% of Screening Tests…

Silence From The DC Cognoscenti

It was reported a couple weeks ago that tests of screening at airports across the nation fell flat in detecting dangerous objects.

The failure rate was estimated to be near 80%.

One might think that this would have the aviation and travel industries all frothy and indignant. Heck, some of these folks have claimed that so much as ban on a couple of countries which have poor internal security and which generate near zip tourists to the US is a giant threat to our travel economy.

One might think that the news that our airport security stinks would be a major factor in deterring visitors to the USA, and there would be calls for some immediate remediation.


Not a peep from any of the alphabet organizations inside the Beltway. Remember the labor union that a few weeks ago so loudly denounced the plan at PIT to let non-ticketed people in to the main terminal, calling it a threat to security? Not a word from them, either.

Think About How Incompetent The Rest of The TSA Programs May Be. Here’s a fun thought. If the simple stuff like identifying pointy objects isn’t being done, it’s a lead pipe cinch that the more sophisticated and difficult security aspects – such as perimeter and AOA screening, not to mention complete threat-identification and threat-mitigation programs – are also being ignored. You can make book on it.

There were hopes that the Trump Administration would clean house at the Department of Homeland Security and the TSA. Apparently, not. Or, at least not yet.

Take The Easy Way Out. Blame The Folks In The Blue Shirts. Take a look at the media coverage… virtually all of it discusses how the front-line screeners supposedly aren’t doing their jobs. It’s their sloppy work, according to the veneer “experts” and zipper-brained network reporters.

Wrong. The actual slop in work product is at the media outlets that spew out this shallow-fact garbage.  What they generally duck from is any criticism of the people at the top of the TSA – the ones who are planning and running the show.

Here’s a fact that’s being missed: the people in the blue shirts at US airports are doing an excellent job.

That’s because they are doing exactly what the management of the TSA directs them to do. They are working within the rules, oversight, supervision and direction of TSA management.

The only real problem with the front line at the TSA is that they are stuck working people at the top who are simply unaccountable, unqualified and inept. A 96% failure rate two years ago, and now an 80% flop score illuminates that it’s not the front line that’s got the problem. It’s the kiddie-table expertise at the very top of the TSA that needs to be canned.

Unfortunately, however, these people are not in line for any criticism from the media.  Any major outlet that would legitimately cover this clown show knows that they might not again get direct access to the TSA Administrator or the head of Homeland Security. Those suck-up B-roll walk-and-talk pieces are great for the 6PM news.

If there’s an 80% failure rate, it means that the system is faulty and the management at the top are incompetent and the entire front offices of this gong show need to go.

Say it again… the system is the failure, not the people staring at semi-effective baggage screening devices all day, or trying to nicely explain that, no, grandpa, your Swiss Army knife can’t go through.

But, it seems that the Washington fraternity is holding tight, circling the wagons around the clowns who are  mismanaging airport security.

Having an airport security system that doesn’t work is apparently not a big deal to them, compared to making sure they have the connections they need at the top.

That may seem a bit rough. But this is pretty much the same situation as in 2001, when FAA Red Team inspectors tried to warn the people at the top about bad aviation security.

Politics and the need for access to pull took priority then, too.

“US Airports Would Do Well To Become China-Friendly”

Travel Weekly Acknowledges BGI China-Welcome Programs

Boyd Group International and its partner, China Ni Hao, LLC., have been working with a number of airports and communities in developing tailored programs that will put them ahead of the competition in gaining a larger share of the burgeoning Chinese leisure traffic and Chinese business investment in the USA.

Posturing to have a higher profile in the China sector will be important for communities of all sizes, and BGI/CNH are at the forefront of providing professional and very functional outreach systems.

From China Kits for episodic visitors from the Middle Kingdom, to China-Welcome programs for airports, through full-function digital and website presence in China, we have the expertise to make sure that when Chinese visitors and businesses look to come to America, our clients are ahead of the pack.

We are honored that Travel Weekly just posted an article on this subject.

Take a look.

And for more information on how we can get your airport and community in front of Chinese consumers and businesses, check out


Aviation DataMiner Takes A Look:

Cuba: Vapor Demand Materializes

Sun Country Latest To 86 Cuba Plans.

Last December, Boyd Group International’s trend predictions for 2017 included the forecast that US airlines would rapidly find out that all the travel industry’s panting and drooling about the huge “pent up demand” for Cuba travel would look pretty amateurish by the fourth quarter of the year.

A few months ago, BGI also noted that any increase in restrictions on Cuba access coming from the Trump administration would be a great smoke screen excuse for carriers to cut back and save face… not to mention saving a lot of money from not running semi-empty airliners to places that most US consumers have never heard of.

And that is exactly what’s taken place. The traffic demand to Cuba is a dud.

And what traffic that has been developed is likely to be mostly the kind of group tours that were in place before Obama went to Havana and basically apologized to the  dictator who’s running the place.

Standby For More Exits. Spirit, Frontier, Silver, Spirit, and now Sun Country have taken a pass on Cuba.

American has cut way back, and can be expected to do more in the first half of 2018. A 56% load factor, CLT-HAV isn’t going to cut it. Same with just 44% between Miami and Santiago.

Southwest experienced ghastly load factors in markets like FLL-Matanzas, and FLL-Santa Clara.

Masking this, a couple of carriers, according to sunshine reports in the media, have requested more rights to Cuba.  The stories conveniently leave out that they’re asking for Havana and mostly from SE Florida – which, looking at the load factors so far, is still very iffy. But nobody is lining up to add service to Camaguey or Cienfuegos.

No Infrastructure. No freedom. No Economy – What Does That Say About Air Travel?. It’s not a surprise. Ray Charles could have seen this one coming.

As a vacation destination for US consumers, Missoula and Bangor and Santa Fe have more value to offer than Cuba… actually, a whole lot more.

And now, right on the fake news cue, some in the media are implying that these airline cuts are due to the Trump Administration’s revisions, making it harder for individuals to visit the Worker’s Paradise 90 miles off our coast, and making it difficult for US companies to sell lots of products to the eager Cuban economy.

You bet… we’re told that the “people to people” thing was a sure winner… bringing citizens together and building new friendships between our two countries. We were told that the Cuban economy was going to be a demand bonanza for US goods.

Somebody lost chain of custody of these folks’ last drug test.

People-to-people? Super… if they could talk freely, the Cubans could tell us all about how they have no right to vote, that they have shortages of key goods, their pay rates are at the subsistence level, and that they can’t travel freely out of the country.

Fact is that we can talk to Cuban citizens all we want. They can’t talk to their own government, so only people incredibly naïve could buy into that dishonest “people-outreach” garbage lauded by the last administration.

Oh, yeah. All that great business opportunity? Except for a hotel deal or two, or a highly-publicized deal where some company will supply hand-tractors to the primitive farming system in Cuba, there is no business base.

And, by the way, the US embargo has nothing to do with this. Cuba can buy whatever they want from the rest of the world. Their economic system has trashed the place to the point where they can’t.

Worse, most of the companies that do exist are run by the same Cuban military that makes sure there is no dissent among the populace. Message: doing business with them won’t help the Cuban people, but just enrich the thugs running the Cuban military.

These are just a couple of points that won’t be on the 6PM news. Not politically-correct, see.

But they are core reasons that any major level of US-Cuba air travel demand simply does not exist.

Airlines Should Be Thanking Trump. For the airline industry, however, all the media drivel about new restrictions killing off demand (that was never there in the first place), is a super excuse to get out of a lot of cash-burning flying,

In point of fact, the hard truth is that whatever Trump may have done or might do in regard to Cuba policy, it is a total non sequitur in regard to the traffic levels that airlines have experienced long before such actions were taken.

Other than Havana, most of the traffic is nonsense.

And even there, plan on more US-HAV markets dropped like a baby grand out of the 8th floor in the coming months.

Let’s Look At Some Numbers. As for Sun Country, they had the rights to fly from MSP to Santa Clara and Matanzas/Varadero.

Facts be known, most folks in the Twin Cities wouldn’t know these places from a medianoche sandwich.

So, accessing Aviation DataMiner, let’s take a look at the stellar demand from the US to these points through the end of April:

Point: if American and Southwest can’t make these markets a go from SE Florida – where over 60% of Cuban-Americans are located, the chances of Sun Country Airlines getting walk-up, individual demand  or even group movements, from MSP are right up there with winning the national lottery on Mars.

Here are a few other stellar examples of how the Cuba market is tanking… and, again, it’s likely that the yields  on these flights are not warming the hearts of airline CFOs, and the costs of doing business at Cuban airports probably are no bargain, either.

And, then there’s Havana….

Better load factors, but not anywhere near system averages, and you can take it to you bookie that the yields are close to bargain-basement and the costs or Cuba operations are in the stratosphere.

Bottom line: Until there are changes inside the cleptocratic Cuban government, and until  Cubans are allowed more freedom than inmates at a minimum security prison, and until the business base (such as it is) gets out of the control of the totalitarian Cuban military, US airlines can just sit and wait.

Trend Forecasts…The Advantage For Our Clients. We’d again point out that BGI forecasts outlined this situation in a comprehensive study in 2009, and an updated one two years ago. Somehow, we didn’t see any of the rest of the players in the aviation consulting business come out on this subject.

Also, our work was not well accepted by the travel industry, which by and large totally ignored most of the hard realities of Cuba, and instead trumpeted how Cuba was the Next Big Thing.

Now that the Cuban vapor hole is  as obvious as Osama Bin-Laden showing up at a Bar Mitzvah,  watch for the “reports” and studies coming out in early 2018 from the Usual Suspects in the consulting sector, “predicating” a decline in expected performance of US-Cuba  markets.

It’s always safe to predict the obvious.


Airline Marketing Alliances… Nothing’s In Stone

Last week, China Southern let it be known that they’re looking at moving out of the SkyTeam alliance, in light of American’s minority share purchase in the Guangzhou-based airline.

With the opening of the huge new Daxing airport in Beijing in 2019, China Southern is expected to have a substantial connecting operation – which would compete with the one expected to be established by co-SkyTeam member China Eastern.

So, plan on China Southern joining the oneworld alliance, which will finally give American a true Chinese airline partner, above and beyond what’s already in place with Hong Kong based Cathay Pacific. This will open China-US traffic access to new levels.

Cathay’s oneworld membership, however, may not be one to make book on the next time you’re in ‘Vegas. Seems that Qatar Airlines, recently defrocked of its code-share with American, has bought a nearly 10% share of Cathay.

And speaking of Qatar, they’ve announced that they are dropping service to DFW, because of, they say, AA’s decision to cancel their  code-share agreement.

It’s more of a great excuse, code-share or not. The traffic wasn’t setting any records.

Qatar’s load factors are around 69% at DFW, not much better than neighbor Emirate’s 66%, which doesn’t have any code share traffic at DFW.


The “Pilot Shortage” – Choking Air Service?

Anybody In the Airport Industry Want To Speak Up & Take A Leadership Role?

It is a clear fact that airlines are having difficulty attracting candidates to the pilot profession. The need to accumulate a now-required 1,500 hours of experience is a huge financial barrier.

But, according to the dogma behind the rule, this will make us all safe from the tragedy of flight 3407, which crashed on approach to Buffalo in 2009.

Declare Anyone Who Disagrees A Heretic. News stories have illuminated that a proposed appointee to the NTSB has gone on record that the 1,500 hour rule, passed  after the Continental/Colgan crash, does little by itself to avoid what happened that night.

The media response was like lightening – this guy wants to cut back on safety! Facts not necessary, by the way.  Wider discussion not needed.

At the congressional hearings to vet this appointee, several  politicians grabbed their soap boxes to denounce this candidate’s refusal to accept the wisdom of the rule.

He correctly pointed out, however, that the NTSB findings faulted training and oversight at the operator, not pilot time.

He also had the audacity to point out that this 1,500 hour rule – which is so zealously defended as the lynchpin of safety by certain lobbyist sectors and in the me-too media – wouldn’t have kept either of the incompetent pilots out of that cockpit.

The fact is that they both had more than this supposed sliver-bullet minimum. The fact is, then, that this sacred rule isn’t a solution to the issues that caused loss of life.

Do Not Even Suggest Alternative Solutions. Here’s the bottom line: open discussion and exchange of ideas on this subject are closed.

“The science has been decided,” as it were, and anybody who dares suggest that the pilot time rules put into effect  need to be reviewed, is attacked and pilloried like heretics  during the Inquisition who didn’t fully agree with the Pope.

It’s actually unsafe to even suggest alternatives.

If Airports Are Affected, Where’s The Input? That brings us to the airport industry. If airports are losing air service access due to this rule – which, again for clarification, would not have prevented the Buffalo accident – then maybe the airport industry may want to take a stand.

Maybe call for additional scrutiny of what can be done to keep skies safe and air transportation un-choked.

There are solutions that can be explored in regard to increasing safety.

But the 1,500 rule by itself doesn’t eliminate the causes of 3407.

Southwest – A Snapshot of Fundamental Changes

We thought it might be interesting to take a look at where Southwest is today v the year 2000.

Using Aviation DataMiner, we compared the key metrics for the top 10 WN airports in 2017 v those in 2000. Very revealing – it’s an airline that, other than its core focus on customer service, isn’t much the same as it was back then.

Note that two of the 2017 top ten – Denver and Orlando – weren’t on the Southwest route map in 2000. They are now lynchpins in Southwest’s traffic flows.

The percent change in key metrics indicate an airline with a route system fundamentally different than in 2000…

The real metric of interest is the change in average passenger trip at each city, showing how the reach of Southwest has expanded. It’s not a short haul airline, despite some veneer media lore. In fact, the average passenger LOH has gone from 546 miles to just over 900 between 2000 and 2017.

This also indicates the criticality of connecting traffic for Southwest. Point-to-point is important, but its revenue streams are increasingly reliant on connecting passengers across its operations at MDW, PHX, HOU, STL, etc.

Just One Example of The Insights Delivered By Aviation DataMiner. In aviation planning, access to hard, analytical data such as this is critical – and that means going beyond what comes off of raw BTS websites. Aviation DataMiner delivers the analytical firepower that gives industry professionals the competitive edge.

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ATC Reform & The Mob Approach To Management Change

Anybody remember Paul Castellano?

He was the Don of one of the most powerful “families” in New York.

Nevertheless, he got whacked by his underlings in a high-profile hit as he arrived at a Midtown restaurant in 1986.

It seems they disagreed 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 continued to do business just as it did before Big Paul met his untimely demise. Just new faces at the top.

“Reform” – Whacking The FAA… But Keeping The System. What took place long a go on New York’s eastside 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.

That’s what’s on the table. Change of management. Not a change of fundamental direction. Not implementation of a system of accountability for results. Not any discussion of whether the failure to achieve material improvements in airline schedule performance may be due to the NextGen program itself.

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

And like the 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.

Flaw: Confusing “Reform” With Results. As a factual matter, neither side in the ATC squabble have any quarrel 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. And will lead strictly to non-results, either way it plays out.

Sound & Fury Signifying The Wrong Direction. The noise surrounding whether the air traffic control system should be “reformed” or left in the blundering 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. These 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.

Now, It’s In The Airlines’ Court. What is becoming more and more clear is that the path to improving air transportation efficiency does not lie entirely within the FAA or the ATC system. It’s now the responsibility of the airlines themselves.

It’s clear that ATC – which is intended to maintain separation of aircraft – isn’t a solution to the entire range of issues and dynamics that have resulted in virtually no material improvement in “on-time” performance in the last decade.

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” fixing the system is based on bogus assumptions and PR doggerel. The anti-reform reactionists are even less credible – they don’t want to change a thing.

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 is no ATC-based solutions on the horizon.

So, rest assured that nothing is going to change. Both sides want to retain the problem, under different management systems.

Airline Financial Analyses  – Consider With Caution

Southwest just reported September results.  We came across a very interesting review of the carrier’s performance.

A couple of key measures declined Y-O-Y, such as load factor and revenue passenger miles, leading this source to declare that the airline’s performance as “disappointing.”

The report wallowed around, decrying a decline in RPMs of 4.5%, a lower load factor and other danger signs that were shown as prima face proof that Southwest was in decline in September.

Summarizing the veneer understanding of the airline business, this financial report declared…

“…Load factor (the percentage of seats filled by passengers) decreased 250 basis points (bps) to 81.7% in September. The key metric fell since the contraction in traffic was more than that in capacity leading to empty planes…”


Read that again, dig the comments within the context of airline industry metrics, and consider this comes from a source that postures itself as a reliable reference for investors.

The first red flag is the term “250 bps” to describe the decline in load factor. Nobody awake, sober and with even a high-school knowledge of the airline business uses “basis points” to measure changes in load factor. That’s a financial term, not one used in airline data.

Then, the contention that’s lethal to the report’s credibility. “… leading to empty airplanes…”

Misleading, unprofessional, and stupid.

That can only be described as a sure sign the writer might not be expert in the airline industry, particularly where the airline had a nearly 82% load factor.

The uninformed reader gets the impression from this posturing “expert” that WN routinely flew empty flights, which was not the case. It does not say that the average passenger load, system-wide, was 2.9 fewer passengers on a fleet with an average of 149 seats per flight.

It does not say that a few more seats on average were unoccupied. It does no explanation of any shifts in the WN route system that could explain this.

No running from it. The report states  clearly that Southwest was flying “empty airplanes” due to the decline in load factor.

That is fake news. To the consumer, that means nobody on the plane. If one is taking investment advice, a whole lot more informational precision might be expected.

On the basis of this, the source advises investors to dump their Southwest stock.

A Couple of Airline Metrics Not Considered. Now, Southwest is a big boy airline and can certainly deal with this half-baked financial reporting for themselves.

But there have been changes in the WN fleet and route system over the past year, and there are no danger signs regarding out-of-control route expansion, over capacity, or consumer issues.

We’d maybe point out that just reading SEC documents and Form-41 data, without full analysis and understanding of what’s behind them, or of the airline’s known and expected strategic direction, is a veneer way to make determinations on whether the airline’s future is going in the right direction.

There are a lot of strong airline analysts out there. But…

Caveat Emptor.

Fleet Trends –

The #1 Factor In Air Service Access Planning

Here’s a reality that most ASD programs completely ignore:

Air access for communities across the nation is dependent on the structure of the airline system, and that structure has changed and will continue to do so.

Point: what was in place in the past is not an indicator for the future.

One of the key flaws in most of the traditional “air service development” programs still being foisted on communities is the failure to recognize, anticipate and harmonize with the fallout from fundamental changes in airline economics.

Instead, most of these ASD programs simply chase efforts to bring back the past… a past which the airline industry has moved out of.

Accommodating The Future, Instead of Trying To Recreate The Past.  It’s the responsibility of airport and community planners to recognize this reality and craft access programs accordingly.

The #1 determining factor for the US air transportation system is the fleets that airlines will be operating.  Gone are the hundreds of <50 seat turboprops flying defined route systems in the 1980s – along with the independent airlines that operated them. Coming in are larger units of capacity at major carrier systems, and these airplanes have different mission capabilities than the units they replace. That means lots of new applications, and the fact that many others may not be as economically viable as in the past. Going away are the small “regional” jets that were ten years ago touted as the future.  Take a look at the realities that have emerged in the last ten years – exampled by comparing schedules for the 2nd half of 2017 v that of 2007. This shows a fundamental change in airline economics and in the air transportation system. Not only are there four (soon to be five, with the AS/VX merger) fewer airline systems, and there are still 13% fewer airline flights... but with 2.6% more seats. Tellingly, the average size aircraft has gone up over 18%...  Delta’s average departure seats are up 26%. Frontier – completely changed in structure – has gone from an average of 117 seats to 163, with the deletion of Q-400s from its fleet and a shift to being a ULCC. The clear message here is that the airline industry of ten years ago is gone, and the evolution of the current system will continue. Put The Leakage Study Down. Turn Off The Random Consumer Surveys. The key to assuring air access for communities is to first recognize that the air transportation system has changed. Tossing $30K at a blind study to “find more airlines” is an abominable waste of money, because for every airport in the USA, the potential “more airlines” – if any – are clear from the start. Doing random consumer surveys of “what the community wants”  is a useless exercise, because the real determinant of airline route planning is where airlines can put their fleets to make the most money. Communities & Airports: The Global Future Demands A Comprehensive Access Plan. Today, air service is just one channel of communication, within a constellation of channels, all of which are changing. As small communities are discovering, the capabilities of using aircraft as a channel from the local airport are vaporizing. As the chart shows, the reality is that the air system  has consolidated and the bar for supporting scheduled flights at the local airport is going up. Doing more studies, more surveys, forming more “task forces” won’t change this. These tend to gather numbers, but not solutions. For economic growth – for all regions of the country – there needs to be a realistic Comprehensive Global Access Plan that deals honestly and bluntly with these realities. First Step: Bottom-Line Solutions. Bottom-Line Data. At the 22nd Boyd Group International Aviation Forecast Summit, August 26-29th, the entire event will deliver insights and perspectives that address the realities of future. On the 27th, our pre-Summit workshop program will include Air Access Realities & Opportunities 401 – geared to bringing attendees up to date on the trends in air transportation, within the context of current and expected airline strategic trends. Bring your board... they need to hear this. Because fleet trends are critical to air access planning realities, all global aircraft manufacturers will be presenting their views of the future – Airbus, Boeing, Embraer, Bombardier and Mitsubishi. The airline industry will be there. Big time. Not only will there be presentations from CEOs and executives from most of the airlines on the chart (plus several global carriers), but there will be over 70 total airline staff at the event. So, bring your business cards. For a look at the complete agenda, click here. Then hit the back button and register. Our regular attendees will tell you, at the Summit, we look at the future – and sometimes that’s disruptive. But all progress is disruptive. For entities that plan for it, it’s a competitive opportunity. Advanced Airport Forecasting To Be Delivered At The IAFS™ It’s sort of like a roadmap for a territory that no longer exists. That pretty much describes the annual FAA Aerospace Forecasts. They are located nowhere near industry realities. Air Traffic Volume Is no Longer The Caboose On The Economic Metrics Train. Take a look at the latest FAA Terminal Area Forecast. Or the annual FAA Aerospace Forecasts. They are supposedly the Source Perrier of futurist aviation information. Lots of data. Lots of analysis and discussion of things like economic growth and fuel costs, and loads of review of various economic factors. Graphs and charts galore. These, somehow, are implied to be the factors that underpin air passenger traffic volume. The basis of air travel levels is just a product of these metrics, they contend. That all that’s needed, according to the FAA's methodology. Voila! We have a forecast! Easy. Simple. Mechanical. Mathematical. And today, completely in another galaxy from he real world of airline economics, discretionary spending patterns, and the role of air travel in the consumer economy. It's all next to useless as a planning tool. The Fantasy Airline System. Then there are great tables of things like passenger traffic carried by what they call “major” carriers and “regionals” – which is a definition that was fine in 1985. But today, that airline system is gone. Message to the FAA: there are no independent “regional” airline route systems, not to mention any such entities to operate them. Splitting them out is not only misleading, but shows a woeful failure to know about the subject matter. Today, we have a number of certificated carriers like SkyWest and Envoy and ExpressJet and Air Wisconsin that lease their aircraft to American, Delta, United and Alaska, who then use these resources within their fleets. And often right alongside the airplanes they lease in from folks like BOC or ILFC. These are not distinct airlines. But the FAA still thinks they are independent operators with independent business planning and their own passenger base. Completely inaccurate. Air Travel: Increasingly A Consumer Discretionary Option. The FAA’s methodology has been out in the far reaches of non-reality for the last 25 years. But today, it’s downright dangerous as a source for airport planning. The point is that the FAA has completely failed to adjust its forecast methodologies to reflect the fact that air travel volume is today also a competitor for discretionary dollars. The ULCC expansion is one example. So, thinking that raw economic  metrics can project where traffic volume grows is nonsense. The New Factors – And They Move Around. FAA methodologies were useless in predicting traffic changes at points like Memphis, RDU, San Jose and CVG, where subjective corporate decisions caused passenger volume to spike up and down. FAA forecast methodologies are useless in predicting where Frontier will decide to offer seats at prices that then compete in the consumers’ budget with a new refrigerator or re-papering the living room, or just leaving the dough in the bank. FAA forecasts were not in play when Allegiant started service at Elmira. Nor were they in play to give projections that both American and Delta would pull out of that same airport. The bottom line is that except in cases where airport master plans still need to address variances from the TAF, FAA forecasts should be left on the electronic shelf. Airports Planning For The Future Will Be In Las Vegas, August 26-29. At the International Aviation Forecast Summit, we’ll be presenting the latest Airports:USA® Enplanement Forecasts. Airports:USA® goes way beyond just economic metrics and outlines the emerging trends that airport and aviation planners need to include in their projections of the future... -Changes in fleets, such as the retirement of small jets and turboprops, and how these will alter airline strategies -Issues such as “hub-choke” and how this can change the relative value of feed traffic – and airline capacity decisions -We’ll be exploring how to address the effects of ULCC expansion, and the general factors regarding the economic underpinnings of such service -The IAFS™ was the first to forecast the value of large non-hubsite airports to foreign carriers, looking to feed their on hubs. Now we see places like MSY, AUS and BNA gaining this access... and it will have effects on regional travel patterns as well. -Expansion of discretionary-dollar international flights. The entry of Norwegian, WOW and other international ULCCs will have differing effects from those that will derive from global network carriers such as British entering airports such as the above -Road-hubbing will expand. Consumers will “hub” to airports that offer the best value. The truth is that airplanes as a mode of transportation are increasingly time-inefficient and cost-inefficient in serving small communities. As has been seen repeatedly at local airports such as Topeka and Naples, whatever service that can be supported is a consumer-dud to other alternatives Plus, Base Forecasts For 146 US Airports & Discussion of Potential Disruption. This year, we’ll be talking about not only the traffic based on known and identified trends, but we’ll be outlining the potential disruptive factors that may come into play in regions of the nation. This is a session that will deliver whole new perspectives to airport planning. They will arm attendees with information that will be invaluable in addressing and optimizing the future. Get with the future! Click here for more information on the IAFS™ and to register. Has Good Sense Left The Building? This past week, there were a couple of news items that would indicate that chain of custody was lost at couple of organizations’ random drug testing. Hey, Let’s Build A Couple of Hub Airports In Ohio! Last week, some state politicians got step ladders and climbed on to soapboxes and announced plans to build not just one, but two, “hub airports” in the State of Ohio. They grandly noted that the two airports would attract all those international carriers that are just hankerin’ to toss 787s into the Buckeye State. See, these new hub airports would have rail service from all major commercial centers in Ohio, which would just have carriers come a runnin’ to invest in a connecting hub at each one. Now, to be clear, the august solons noted that this $10 to $15 billion project would be dependent on a carrier agreeing to put a hub at one of the nowhere-near-population proposed airports. That notwithstanding, they went ahead with plans to form commissions and task forces to “study” the idea. And these politicians can’t understand why they are held in less esteem than the guys in plaid jackets peddling cars with sawdust in the transmissions. Let’s Engage Who Does Not Want To Engage Last week, there was a low-credibility “study” issued by some advocacy group that determined that any attempt by the Trump Admiration to roll-back Obama’s outreach to Cuba would result in disastrous damage to sectors of the US economy. Get this... a roll-back of jive-time "outreach" to a nation that can't supply soap to its citizens will cost the US a huge economic hardship. And the tooth fairy has no dental coverage, either. They estimated billions – yes, billions – of damage to the US airline industry, plus thousands of lost jobs. Seems they didn’t get the memo that there is very little non-VFR traffic between the US and Cuba – to the point that US airlines have dropped or pulled back on service levels. They didn't get the message that Cuba has zero business base and even less interest in building one. Of course, the “study” demanded that the US continue “outreach” to the Cuban government, which is one of the most disgustingly repressive regimes since Idi Amin rushed off to a permanent vacation in Saudi Arabia. Here’s a flash from the only consulting firm that’s done independent research on the potential for US-Cuba travel: the ball is in the court of the cleptocracy Castro administration. They are the ones resisting new investment. They are the ones denouncing the US, while their system dooms Cuban citizens to the lifestyles of  the poor and indigent. And these US do-gooders act as if changing this is just a matter of more presidential kowtowing to a fourth rate totalitarian dictator. One yo-yo Senator from Vermont demanded that Trump do more to engage the Cuban people in "dialogue." The same Cuban people who have no say with the clowns who have been running Cuba into an economic vapor hole for over half a century. What is particularly disgusting is that organizations such as the US Chamber of Commerce reportedly have jumped on this nonsense – as if more “outreach” will dislodge a corrupt, repressive regime that has trashed the economy of what could be one of the hemisphere’s most vibrant nations. Hey, US Chamber, are human rights less important to you than trying to get a good deal with a communist dictator? Guess not. They give capitalism a bad name. Fact is, they are opportunists, not capitalists – and not very good at that, either. They probably have a bust of Neville Chamberlain in their headquarters. With a votive candle in front of it. ________ But, On The Other Hand... Finally! An honest review of the Essential Air Service Program... Traditionally, EAS has been a safe subject for “investigative” stories on government waste. But let Trump try to zap it, and suddenly it’s been described as a pillar of the economy of small communities, even those where the program is demonstrably a scandalous waste. Now comes a story on the subject from Traverse City, that does actually look into the total EAS picture, instead of the trendy nonsense that most of the media regurgitate. Click here for some intelligent review of the EAS program. Accurate reporting on the program is rare. ________________ And If You’re At Jump Start, Stop By This week, we have a team and a booth at Jump Start in Providence. If you’re in the hall, do stop by and say hello to Bill Oliver and Dan Cohen. They can give you more information on the exciting things happening this August at the International Aviation Forecast Summit, at the Wynn Las Vegas, August 26 – 29th. One of the things that airports and airport board members shouldn’t miss is the pre-Summit optional Workshop program. We have none other than Ben Baldanza doing a special session on the new Airline Economics... this will open eyes... Then, we have a special event regarding drone issues, which will be important to every US airport... Fuel and the effects on future air service? Ben Brockwell of OPIS will give a session on how shifts in fuel prices will shape where and how airlines will fly in the next 18 months. Then, there’s a special Air Access 401 session, which will illuminate the future of building air access, and avoiding the expensive pitfalls of traditional “air service development” schemes. If you’re not registered for the IAFS™ and the Workshops, do so now, by clicking here. _______________ And If You’re At International Travel Pow Wow In Washington... Stop by and say hello to our partners at China Ni Hao. The CNH team will be showing the thousands of other exhibitors – including US airports - how implementing a China-Welcome™ program can deliver a bigger share of the 4 million Chinese visitors expected to the USA this year. Our colleagues Chris Spring, David Zhou, C.K. Tong, and Mike Boyd will be circulating among the thousands of travel companies and communities, and discussing how outreach to this segment can be an airport’s ace in the hole in attracting more international visitors. According to BGI forecasts, the US can expect over 28 million visitors from China in the next five years. Every community and airport is in the play. For more information, click on to ________________________ First Off This Week Hainan Adding More Las Vegas Capacity We’re excited to note that Hainan Airlines will be up-gauging its LAS-Beijing service this summer to 787-9 aircraft, barely seven months after start of service on the route. McCarran is ready. Their  China-Welcome™ program has been showcased in the global press – and also within the Chinese airline industry. In addition to the Hainan service, McCarran also supports over 340,000 passengers from China via connecting flights, making the program an important part of the airport’s positioning for more nonstops from China. McCarran’s comprehensive approach to welcome these visitors with appropriate but unobtrusive signage in Chinese, Mandarin-speaking uniformed Ambassadors to assist, and anticipative wayfinding throughout the arrival and departure processes, has earned LAS a growing reputation in China. Other Chinese carriers are taking notice. McCarran stands out. One of the initiatives has been a comprehensive WeChat app that proactively acquaints McCarran International with Chinese consumers. This app, designed along the lines of those at Beijing and Shanghai’s airports, positions McCarran way ahead of other US gateways – not only being a complete guide for their Chinese guests, but also putting the airport literally in the pockets of millions of consumers in China. McCarran is ahead of the curve. over the next five years, 25 million Chinese will visit the USA, and it's destinations and airports that plan ahead will capture them. If your airport and community are interested in attracting more of these new-generation travelers, it's not a complicated process. Just give us a call, or log on to to discover how a tailored China-Welcome program can work for you. And Join Your Colleagues For A Special China Event. On August 26, BGI will be holding the 3rd Annual China-US Travel Opportunities Symposium. The event will cover how US airports and venues can tailor their own China-Welcome™ programs to attract this high spend sector. Click here for details. Special Rate For IAFS Attendees, Too. And if you’re joining us for the International Aviation Forecast Summit, which kicks off the next day, there’s a special rate to add the China Symposium, too. _____________________ Laptop Bans – The Next 9-11 Hit To Airlines? A Torpedo At The Foundations of Air Travel It’s expected that Homeland Security will shortly ban laptop computers from the cabins of airliners arriving from Europe. This is in addition to flights from specific Middle Eastern airports. For whatever reason, the threat appears to be not whether explosives can be installed in laptops, because in the cargo bin or the economy cabin, anything that goes boom is not going to have a happy ending. The threat, apparently, is something that the security folks fear can be done from the keyboard while on the flight. Flights From Oman or From Omaha – Is There A Difference? Okay, it doesn’t take an MBA from Wharton to figure out that if this threat can be present on a flight from LHR or CDG, it could also be a threat on domestic flights, too. Airline CEOs: Battle Stations. Get the picture? Think about it... what would be the fallout if laptops are banned from US airliner cabins across the board? Even as distant a possibility as this may appear, if it were implemented, the entire underpinning of the value and missions of the US air transportation system will be changed. And not in a way that Warren Buffet will approve of. No Laptop. Can’t Do Business. So Cancel The Business Trip. These devices are now essential parts of business travel. If they are required to be checked as luggage, a whole passel of changes would need to be made to how airlines handle  airport processing, all of which will make air travel even more unpleasant than just having to stand in the 50-person-long  “priority boarding” line an hour before departure. Let’s be real - it’s real doubtful that most frequent business travelers are going to want to check a bag with only a laptop in it for a one-day trip to Chicago. Or be real confident about his/her MacBook Pro, with all of the important stuff on the hard drive, getting tossed into the front bin of a 737, along with all sorts of other roughly-handled stuff. First, the potential for damage to the electronic device is always a concern. Second, most airlines charge for checked luggage. Sure, a lot of the affected travelers would be “mineral level” frequent flyers with free bag checking, but a lot are not. This will not go well with consumers. Finally, the extra  time and hassle will be enough to force a lot of travel onto electronic  services. Plus the extra baggage volume would be a hit to the airlines, the $25 fee notwithstanding. Certainly, the airlines could devise a gate-check-and-pick-up system just for electronic devices, but it would be incredibly labor-intensive. Security Is Protecting Our Way of Life, Not Giving In. The number one failure of the fiascos called Homeland Security and the TSA has been incompetent, amateur and unfocused planning from day one. It started with W actually congratulating the folks in charge of AVSEC for their fine work - within hours after 9/11, and has played though the last 15 years with reactive programs like removing shoes and not having more than 3 ounces of Grecian Formula in your carry-on. Security demands formulating actions and programs that protect our way of life. Electronic devices such as laptops and tablets are critical parts of our communication channels. If the threat of terrorism results in the inability of consumers to carry now-needed electronic devices in air travel, that means there will be less travel. Period. It also means that terrorism has again triumphed – we’re running from it, not countering it. One can only hope that the new people at Homeland Security and the TSA are more competent than the placeholders there in the past 15 years. The first test will be how they deal with countering this apparent threat involving use of electronic devices on airliners. The historical track record is not comforting. Open Season On The Airline Industry It’s Okay To Fire First - And Not Worry Too Much About Realities Every year, about this time, we are regaled with various consumerist “reports” on the airline industry. In most cases, facts not in evidence are not a matter of concern. According to the media stories, a trip on an airline today is getting close to winning a vacation to Devils Island. You may be bumped off a flight – to read all the recent stories. Taking a flight is the equivalent of lottery odds to get to your destination. Plus, you may be summarily dragged off the plane by thugs looking to give the seat to another passenger. The recent United debacle – which will almost certainly be the subject of future university studies in public relations disasters – has only fueled a blizzard of media coverage that has about as much relationship to air transportation realities as a letter to Santa Claus. Watch For New "Studies" In The Pipeline. In addition to soapbox hearings in congress, we can now be certain that there shortly will be a number of hard-hitting “consumerist” reports that will once and for all convict airlines of the crimes they have committed against the consumer... It will be the usual laundry list from folks who can’t tell a T-100 from a grocery list. The types who take raw BTS and DOT data they don't understand and then posture themselves as experts with revelations the great unwashed in the provinces should take as gospel, as definitive proof of the evils of the airline business in the US. No Need To Check Facts. Just Get What's Needed To Support A Pre-Conviction of Guilty. Look for conclusions like how a few airlines are “dominating” hub airports. Or cutting off small and mid-size communities arbitrarily from the air transportation system. A staple of these kind of Charmin reports is to use veneer stats comparing the flight activity at Memphis in 2002 (when it was a connecting hub) and comparing it with today, thereby bamboozling the public with the conclusion that MEM has lost dozens of important-to-the-economy nonstop flights. They usually do the same jive and dishonestly-postured comparisons with ex-hubsite airports like Nashville or Kansas City, or Raleigh-Durham, with the conclusion that these lost nonstop routes were supported by the local demand. Again, veneer data spouted by veneer people that don’t want to tumble to economic realities. Message To Media:  When looking at these types of “studies” - whether they’re  from the high towers of a university, or from some hermetically-sealed intellectual terrariums inside the Beltway - try take the time to check out the conclusions – regardless of the pedigrees of the authors. You may be surprised... don't become the victims of fake conclusions. Often, many of these “studies” are founded on a devout intention to start with a sacred premise, and only deliver the data – or half data – that supports it. So, listen up, media... here are the immediate tell-tale signs of a report done by people who don’t have a clue, beyond the veneer data they can get off the internet.. Amateur Nomenclature: Here's a fact. The nomenclature used by the DOT to describe airports - non-hub, small/medium/large hub - have nothing to do with today's use of the term "hub." Yet a lot of these “studies” tend to simply take numbers and nomenclature right from DOT websites, and assume they’ve just visited the Oracle at Delphi. It’s a sure sign of an amateur, or worse, an advocacy document that started with a premise, and discards anything not supporting such pre-conclusions. For example, if the study refers to “hubs” only within the antiquated airport-ranking system  of the DOT, without any discussion of what an airline hub really is, you can take it to your bookie: the authors don’t understand the data or the current air transportation system. Declaring Airline "Domination of Hubs."  Needless to say this is another clear sign of a report that would do well in a landfill, not in a library. Today “hubs” – i.e., connecting hubs are created by airlines. These writers simply don’t know the difference between the DOT term “hub” and that which airlines operate at airports of their choosing. It’s real easy to take schedule and passenger data from an airport like, say Charlotte, and spew out damning conclusions like: “American Airlines dominates over 90% of the capacity at Charlotte!” Prima face evidence of monopolization and delivering consumers there into single-carrier bondage. Of course, these magnum opuses tend not to honestly identify the fact that almost 75% of those AA passengers are connect traffic, with no connection whatsoever with the local demand at CLT. Or the fact that CLT by itself couldn’t support anywhere near that capacity. But to the folks on the consumer warpath,, there is no other conclusion. Nevertheless, the “study” is either amateur, or intentionally is trying to mislead the reader. (By the way, the AA hub at Charlotte also has the benefit of supporting far more air service to local consumers than the market could otherwise support. That tends to be completely ignored in most of the angry condemnation reports.) Small Airports Being Intentionally Zapped By The Airline Industry. This one is the leper’s bell of a report that has no professional credibility whatsoever. Needless to point out, there is no question that many small airports have seen declines in scheduled air service. But the causes of this are rooted in economic fundamentals, not some evil plan concocted in the airline’s front offices. Ignored conveniently: There have been changes in fleets, as older turboprops are retired. Changes in consumer preferences to drive to a larger airport to take advantage of the flight offerings instead of the 2, 3, or four flights with a single airline brand, which is all the community can support, at best. And a whole passel of other cogent reasons, none of which are due to the Darth Vaders sitting in airline executive chairs. Focusing On Airport Service Instead of Air Access. Another sure sign of ignorance. Today, the most important factor for any region is access from the rest of the global economy. Some of these angry-mob “studies” make the assumption that unless there are scheduled flights at the local airport, the community is cut off from the rest of the world. Today, Topeka , Kansas has no scheduled flights at the local airport. But it has great air service – at Kansas City, an hour or so away from most of the population. In 2014, an attempt with two daily United Express flights to ORD failed miserably. The reason: the 80+ flights, the number of carriers, and the wider access offered at MCI, including the drive, was far more convenient and less time-consuming than trying to shoe-horn a trip to accommodate 2 local flights. Question Everything. Then Report. While the airline industry does have real service issues. (The emotionally-reported incident at United is not a factor. It was a one-off that has not been fully reported beyond selected iPhone videos.) The general impression conveyed by the industry – rightly or not – is one that sets rules that the consumer must follow or pay a financial price. Add to that the hard fact that the number of airlines has declined. Add to that the implementation of code-sharing (supported by a doctored 1986 DOT study) which eliminated about two dozen independent airline brands and ultimately ended completely what was once the regional airline industry. Toss in the fact that aircraft economics and consumer choices no longer allow a lot of air service that 30 years ago could be profitable. All that is true.  And all that is reality... which some of these misleading advocacy documents refuse to recognize. Fact: We have air service issues in the US, and most are due to the two reasons above... economics and consumers. And we have a consolidated airline industry, operating modern fleets that can't assume the missions that were possible with the aircraft of 30 years ago, which are no non-economic. Plus, there is the impression within this context that airlines don't care about whether a consumer flies with them again or not. That's certainly an issue that the industry needs to address more aggressively. Nevertheless, it doesn’t advance the issue when entities take data they don’t understand, apply it to an industry about which they are completely uneducated, and pompously come out with reports and studies that simply try to apply blame, with the unprofessional conclusion that somebody on Capitol Hill can fix it. They’re tilting at control towers. And misinforming the public.

AAAA Monday Scribble Sheet

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.


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.

Archives August 16 – Jan 17

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 21st 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.


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.


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!


A-Title Page Scratchsheet

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…


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.


BGI Aviation Data – Request For Information

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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EAS & SCASD – Obsolete Thinking


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 22nd 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.


Overview of 2017 Aviation Trends


If you’re focused on the future, join your colleagues August 26 – 29 in Las Vegas!

Special Early Registration Rates In Effect Through January 15

Click Here For Information & To Register.


 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.


2017 Enplanements –

3.5% – 4.0% Growth, But…

It’s With A New & Emerging Airline Structure

As we will cover at the 22nd 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…


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.


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.


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.


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.


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.


Bringing China To US Airports

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.

McCarran Opening Welcome

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.

Article – The Supersonic Future

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.