Monday Insight – December 5, 2022

Standby! 12 December Monday Update is in Progress

Wall Street Analysts Finally Noticed.

Boeing Is Persona Non-Grata In China.

Actually, Does The China/CCP Have More Political Clout In Washington Than Boeing?

Yes, we’ve covered this earlier in the weekly Touch & Go newsletter, and in a number of Aviation Unscripted videos, but this is an issue that really is raising some questions that nobody inside the Beltway wants to pursue. This may be a dynamic that cuts across more than just our aviation sector.

Finally, after enough red flags to decorate the Kremlin on May Day, some financial analysts have noticed that Boeing isn’t getting any traction in China.

737s All Dressed Up With Nowhere To Go. There are over 130 737Max airliners sitting in storage that were ordered by Chinese airlines but not delivered. And, chances are they never will see the skies of the Middle Kingdom. White tails with pretty paint jobs. Presumably, some or most of these are spec’d out for the intended operator, which makes selling them to another airline a challenge.

China’s is the only major nation that has not approved the Max for service. In the meantime, they have committed to hundreds of new Airbus A320 airliners, and A321s are about be added to the Airbus production line in Tianjin.

This is not news. It has been obvious for over a year, but conveniently ignored. There has been no push-back from the occupants of the White House. To have America’s number one exporter cut out of the China market does affect the US economy, yet the powers that be on both sides of the aisle have said almost nothing.

Yup. No outrage from inside the Beltway. Wonder why.

Let’s Ask The Question: Does China’s Un-elected Government Have DeFacto Friends In High Places? Nevertheless, don’t expect much pushback from inside the Beltway.

It looks like the deck may be stacked against Boeing and the people working there.

Keep in mind that there is a cheering section for the China CCP in a wide range of industries and political entities in the USA. Despite things like genocide in Xinjiang and forced organ harvesting from dissidents, or draconian shutdowns that have led to loss of life, not to mention complete responsibility for the global pandemic, a number of American business leaders have gone out of their way to laud the CCP. They have a dog in the fight – and it’s not ours.

High level congress people have indirect or family business involvement with Chinese companies. The parent company of one major network has huge investments in China. “Unbiased” reporting when hundreds of millions are at stake? Remember, every Chinese company wherever it is located is at least indirectly controlled by and benefits the thug criminal government in Beijing. No exceptions.

So, it may be too much to expect any outrage that may threaten the lucrative Chinese apple cart. Even the clown running the World Economic Forum last week lauded China as a model for the rest of the world. The fix is in, ya think? This lowers the stature of the WEF to somewhere below that of a midwestern bowling league.

Meanwhile, the fleets of 737Max airliners already in China are still parked, give or take some gadfly reports of a one-off 700 series Max making flights a few months ago.

Given the orders for Airbus machines, plus the now-certified C919 joke airliner being forced on Chinese carriers, the prognosis for Boeing in China is close to zero.

Bottom line: Boeing’s global market no longer includes China. That will have an effect on the economies of regions where the company is a major employer.

No change is on the horizon. It could threaten some lucrative rice bowl deals some politicians have with Chinese-related businesses, to the detriment of working Americans in places like Seattle and Wichita.

Monday Insight – November 28, 2022

Year 2023:  Air Service Planning: Reality Settles In 

Reality One: Airline Re-Fleeting – No, There Is No Pilot Rescue For Small Communities

Let’s start with this. It is most unfortunate that the Regional Airline Association is so much off-base. Their recent report on the small airport service “crisis” is based on narratives that are galaxies removed from the real world of the 21st century.

Their message is that small airports have lost service over the past few years entirely due to lack of pilots. Goodness, congress! Take action now! Otherwise, small communities will die on the economic vine! That sounds great. But it’s not consistent with the economic world the rest of us live in. It is in fact misleading.

RAA would have us to believe that all small communities need to have scheduled flights at the local airport, or the town’s future will eventually resemble Dresden after the bombers left. They would also have us believe that such service is economically possible. Both narratives are in the wrong direction and send small community planning there, too.

In most cases, it’s the shift in economics – the revenue v the cost – of operating small community service that’s torpedoed a lot of service at local airports.

This is not a “crisis” as the RAA describes it. It is reality.

Reality Two: The Consumer Has Better Options. Many Local Ones Are Economically Unsupportable.

In reality, it’s often the consumers that are the core reason. that local service dies. They are finding that the hour or even 90-minute drive to a larger airport is more total travel time-efficient than trying to use the two or three hub connect flights that the local airport can barely support. That ”true market study” or “catchment analysis” or whatever set of heatmap-infested reports can be concocted won’t change this.

The air transportation system and its economic underpinnings have moved on.

The result of what the RAA is putting out is a lot of false hope and encouraging a lot of wasted money at small communities being spent on quack studies to attract airline service that doesn’t exist or won’t work. Gee, the RAA says it. No need to check it out, right?

There’s recently been some pap that American is expanding use of 50-seat jets. Don’t buy it as a trend. They’re just applying the aircraft they are newly leasing in from Air Wisconsin, and which were previously flying as part of United.

The hard fact is that economics – and not pilot shortages –are driving 50-seaters into the desert.

Reality Three: Small Jets – What Goes To The Desert, Stays In The Desert. Room For More.

There is also the oft-repeated factoid that American has 150 of its small jet fleet parked. The implication is that when more pilots come into the picture, these airplanes will be back in the skies.

Not likely.

This isn’t going to be a capacity cavalry coming over the small community hill. As far as the data can be determined, only a couple of these are larger CRJ700 and CRJ900 units. All the rest are either 50-seaters, or 37-seat ERJs.  Chances of these coming back are right up there with Elvis being the first booking.

Reality Four: The Future Is Larger “Small” Airliners, And There Aren’t A Lot In The Pipeline.

The only new replacements for the exiting 50-seaters are Embraer E175s, and they represent whole different operating economics.

That means they can’t and won’t be one-for-one replacements. There are lots of E175s “on option” but very few actually on hard order at US operators at this time.

Most available CRJ700s are already in the sky. Same with CRJ900s. They are off the market. The E175 is the only scope-compatible small airliner in production. Plus, there are none under development.

Do the math. It doesn’t indicate that just adding more pilots will reverse the hard dynamics that are affecting local small community air service.

Reality Five: In 2023, It’s Okay To Shoot The Messenger If He’s Peddling Garbage.

Point: the economic bar for small community air service is going up. And importantly, there’re no longer any mysteries in regard to the viable air service options available to every airport in the nation. Or, in some cases, the clear lack of such options.

The need for hard, direct analysis of the true options, instead of jive programs that focus on vague objectives to “get more airlines” instead of specific community air access needs will be front and center.

Prediction: In 2023, fewer and fewer airports and communities will be available to be hornswoggled by massive consultant programs to find airline service that doesn’t exist.

Reality Six: Identifying The Need, Determining Potential For Success, And Then Targeting.

Air service development must concentrate on the specific air access needs of the region, and on a clear understanding of what the options are for attaining them.

The traditional scattershot programs won’t work anymore. Going to speed date meetings and spending a pleasant 20 minutes with Southwest is nice. But as far as gaining service at a small rural community, it’s a functional waste of everybody’s time.

It’s access that counts. Going after airlines for the sake of having an airline won’t do much except waste money. The need is to facilitate business. Communities that focus on real-world economic solutions – which in some cases means regionalized access – are dealing with the future.

Then there is the ULCC impulse option. It is not access, but simply a new spend option. For a lot of points, the traditional ULCC leisure model can work because it naturally attracts traffic from a wide geographic area. The challenge for the immediate future is the continued high levels of discretionary dollars in the face of 8% – 10% (or higher) inflation. Also, as noted in our last Monday Update, this sector may be shifting toward more core market flying, in direct competition with network carriers.

Reality Seven: Get Clear & Focused. Don’t Hunt Unless You Know What You’re Hunting

We’d suggest investing 12 minutes and take a look at our latest Aviation Unscripted video.

No holds barred, and straight talk. It has points that are completely missed in most traditional air service development programs. It will cross some lines that need to be crossed.

And while you’re there, hit the subscribe button and join us.

Click here or on the icon to join us.

Monday Insight – November 21, 2022

Three Preliminary Observations – Aviation 2023 

One: The Main Attraction – ULCCs Move Out of The Model. For Network Carriers, It’s DEFCON 1.

For the first time in 20 years, major airline fortress hubsites are vulnerable. Load factors are at or above 85%. Plus, material percentages of network carrier departures are operated with airliners between 50 and 76 seats.

That opens opportunities for ULCCs, which are facing near-certain declines in impulse/leisure demand due to the recession and inflation. They are looking for new sources of revenue, and the current state of at least five major airline connecting hubsites are vulnerable.

Mark it down. The industry is in for a major competitive restructuring in 2023. The current parallel universes between network and ULCC carriers are about to collide.

Not to put too fine a point on it, but we’re possibly looking at a major competitive Armageddon in 2023, with ULCCs going from impulse-driven traffic to poaching revenue from core network carrier routes. In short, the ULCCs are jumping the fence and going after traffic now carried by American, United, Delta and Southwest.

They have no choice. On the air side, Frontier and Spirit are aggressively shifting strategies, reducing Florida and implementing head-on competition right in the middle of network carrier hubsites. 

Message: the underpinning of ULCC traffic – leisure discretionary travel – is shrinking. Message: this is not a drill for major carriers and their hubsite dominance in 2023. ULCCs have airplanes that need to go somewhere 

Two: New Fleets – Raising The Bar For Air Service Retention, Let Alone Recruitment. On the route and market side, major airlines are shifting fleets. As 50-seaters are pulled down, the only new replacement (under current scope clauses) is the Embraer E175. The reality is that these require a lot more revenue, and also, they are not replacing ERJ and CRJ airliners one by one.

The fallout is not hard to predict. Rural and small community hub feed faces a much higher economic bar. And it’s not primarily due to lack of pilots. It’s lack of acceptable ROI.

Three: International Access – The EU, Yes. Asia No. Trans-Atlantic revival has a pulse, although the leisure sector – which is a lot less vulnerable than impulse trips to ‘Vegas – still has some questions.

Asia? Not happening. China – which in 2017 was about 8 million US O&D – is a trickle. Consumers in the Middle Kingdom are now restricted from leaving, and due to CCP policies, inbound tourism is dead. Business? Not happening, either, with Covid shutdowns and major focus now on human rights abuses.

With a very unstable government running China, including threats of military action aimed at Taiwan and the South China Sea, other points in Asia aren’t going to be at the top of the leisure or business travel bucket lists. Australia, New Zealand and the South Pacific may be a bright spot, but not to the extent of making up for the rest of the trans-Pacific shortfall.

Four: Small Community Air Service Economic Realities Finally Hit Home. Let’s put it this way. The fact is that air transportation has evolving economics. These are driving changes in airline strategies and fleets. These in turn are literally causing regionalization of air access in regions.

In 2023, reality will emerge from the smoke and mirrors of scattershot ASD programs that assume an airline industry no longer in existence. With the economic evolution, the need for small communities to rethink their communication channels and start to re-plan the future impact potential of the local airport will move front and center.

Prediction: The study-it-for-months ASD approach, when the bottom line is obvious, will die out as more and more communities learn independently about the structure and strategies in the airline industry.

The new trend will be industrial development opportunities for rural airports. This will dovetail well with dynamics in places such as Illinois and California, which appear intent on driving businesses and investment away.







Monday Insight – November 21, 2022

Due to the Thanksgiving Holiday, the Monday Insight will be published next week, November 28.



eVTOL Programs –
Amid The Excitement, Some Key Challenges

American, Delta and United have all announced major investments in establishing future intra-urban airport eVTOL air taxi service within the next five years.

Beyond aircraft with <6 passenger capacity, United has also invested in programs for larger all-electric airliners intended to open near-regional markets.

In all cases, the main benefit and product of these new-concept air transportation programs is time. The driving force in communication progress in the past 40 years has been based on emerging systems that allow flows of information, data, people, and goods to be done faster. The eVTOL concept appears to be consistent with this goal.

For some applications of air service, electronic communication advances have eclipsed its speed value. The internet, web-based information systems, etc. have largely replaced a substantial portion of short-haul O&D air travel. Day trips are in many cases now time- and cost-inferior to electronic communication.

The eVTOL air taxi concept, however, is consistent with this time-trend. On paper, it can provide a channel that can save enormous amounts of time over existing modes of moving people through and across metro areas. And time is the value-proposition.

That much said, there is a lot that needs to be worked out before this concept sees the real-world light of day. Manufacturers of these various machines have a lot more to accomplish beyond just rolling out and flying prototypes.

If the projected and desired date of 2024-2025 for implementation is to be met, these companies need to be at full warp speed.

Let’s take a brief look – one that flashy press releases have not addressed.

Battery Supply. There is no way – none conceivable – that airline CEOs and their boards will tolerate having eVTOL operations dependent on battery production based on the current supply system. Today, much of the minerals in lithium batteries come from near-slave level mines, particularly cobalt. Whole new supply sources need to be in place before the first eVTOL commercial flight departs Manhattan for Newark. Before. Not after.

Battery Production. Today, the majority of battery cell production is in CCP-controlled China. That means these aircraft will be part of a system that supports one of the most ghastly and vile regimes in history. New production facilities need to be constructed for both moral as well as security considerations.

Battery Re-cycling & Disposal. These aircraft will consume a prodigious amount of run-out lithium-ion batteries. An estimate has been made of one set per aircraft per year. Point: what are the administrative and regulatory structures to assure proper disposal?

Emergency & Accident Remediation Systems. As it stands now, when a lithium-ion battery catches fire the only option is to attempt (over sometimes several hours) to drown it in water. Hundreds of thousands of gallons of water. Think about this at an eVTOL site in New York midtown. The strain on the water system is one thing. Then think about this happening in mid-February where the (contaminated) run-off would create a freezing mess choking entire areas of the city. New and safe CFR systems need to be in place.

Actual Operational Costs Are Unknown. With all the unknowns – and knowns – regarding the above, as well as the enormous expense of new eVTOL facilities, the actual per-seat cost to deliver the transportation system now envisioned puts current fare projections in question. If we don’t know what the cost of batteries will be if coming from legitimate and socially acceptable sources, it raises that question.

Air Traffic Control. This is an issue. Today, New York City is already limiting helicopter operations, and there have been suggestions to ban all such flights over city. Look at the depictions put out by even NASA, showing lots of happy eVTOL aircraft flying over a metro area. Then paint into the picture fog and overcast conditions. If the volume of this new transportation mode is to be anything close to what is being envisioned, the ATC system needs to be able to avoid having flying bumper cars over downtown Los Angeles.

Airport Facilities. The introduction of eVTOL systems will require new and additional ramp facilities, passenger handling and electric-support systems. If there are to be dozens of these aircraft in and out of ORD every hour, handing the machines on the ground as well as passenger access and egress will be a new challenge.

Need For Comprehensive Environmental Impact Analyses. Finally, the eVTOL concept is new. It is not primarily replacing fossil-fuel transportation. The number of ground taxis taken out of service will be miniscule, particularly when the comparative costs of eVTOL are factored. It’s not mass transportation.

At the tailpipe, so to speak, these machines will be clean. However, the environmental impact of their total life cycle hasn’t been fully analyzed. The mining of minerals, the transportation of such minerals, the impact of making battery cells, the impact of building support facilities and the disposal of run-out batteries have not been completely vetted.

Summary: This is not to discount the potential economic value of eVTOL-category flying. But these are factors that the manufacturers and operators of these flying machines need to address if it is to be viable.

The excitement about a new transportation system is legitimate. So is the need to validate it.


Monday Insight – November 7, 2022

We’re Taking On The Media Stampede Regarding Airline Seat Size, and we’ll be reviewing the latest Aviation Unscripted video.

The Fourth Estate: Damn The Facts. Full Speed Ahead!  We’d suggest you click here to see the entire 10 minutes of facts and data that illuminate just how far accurate journalism has declined in the USA. The current reporting stampede on airline seat size is an example of me-too nonsense and inaccurate reporting. This post just skims the surface.

Here’s a fact that flies in the face of current trendy media stories about how the “FAA must stop airlines from continuing to shrink the size of airline seats.” The truth is that airlines aren’t doing it.

The truth is that US airlines have not made seats smaller, as most of the fact-less media stories either imply or outright state. Actually the average seat size has increased, putting the lie to repeated media stories that specifically state that seats are being shrunk in size, even quoting bogus inch numbers.

Seat pitch – the distance between rows of seats – has certainly changed from airline to airline. Yikes! In some cases down to 28 inches, which is really tight for the knees. But the media stories almost always include the dishonest drivel that the actual seat itself is smaller airlines and that airlines re continuing to shrink them. Those contentions are pure fake news. in light of the supposed high level of a lot of these sources, the term “lie” comes into play.

The actual width of the chair the passenger sits on has not shrunk. In fact, on average, it is actually grown in the past 20 years.

Fact: the seat width on Boeing single aisle airliners in 6-across economy cabins has not declined. In clear truth, the cabin dimensions of a new 737MAX are essentially identical to the first 707s that entered service in 1958. In that, the economy cabin seats have always been @17.5 inches. The construction of the seats has improved over the years, with new engineering and design. But they are not – repeat, not – shrunken and smaller, as the new media mantra implies.

Fact: As the Airbus A320 platform came into fleets over the past 30 years, this injected thousands of economy seats that were wider than those on Boeing’s models – at 18+ inches. Then came the entry of the Embraer E175s and E190s, also with seats wider than the Boeing narrowbody 737s and 727s. Now, we have the entry of the game-changing A220, with seats nearing 19 inches wide.

It doesn’t take a degree from Wharton to see the reality. The media stories about shrinking airline seats are completely bogus.On average, it’s going up, since airliners with wider seats are entering service and earlier models are not  – not – seeing seat size reduced. Tighter density is not the same as airline seat size, and most of the condescending drivel stories are stating.

It gets worse. Take a look at this dishonest and misleading chart put out by CNN. It was originally from a story in 2013, but they have linked it to current articles, implying it is accurate today. It was journalistic sewage in 2013 and remains so today.

Regardless of the size of humans, the data on the average airline seat width is completely and possibly intentionally inaccurate.

To start, at no time in the 1970s did the average economy seat average of 18.5 inches. In fact, with the rare exception of one airline occasionally trying 5-across seating on DC-8s, there were essentially no such seats in the economy cabin skies.

Nor are average seat widths today 16.5 inches. On some of the retiring CRJ and ERJ “regional jets” yes. But that is not the average for the industry. It’s possible some ethically-defective reporter was including first class seats in the mix in the numbers, but that would not account for the completely dishonest claim that airlines have now shrunk seats down to 16.5-inch width on average.

Makes a great 5-minute piece on the evening news or maybe a wallow piece on 60 Minutes, but that data is false.

Making Seats Narrower Won’t Deliver More Capacity. Six Across Is It. Then there is the claim that by making the seat less wide, they can squeeze more into the airplane. To be clear, new advances in materials and engineering, not to mention changes in FAA seat attachment requirements have made seats lighter – but not narrower and not necessarily less comfortable. Somehow, many of these media pieces imply that with shrunken seat width, greedy airlines can get more capacity. The fact is that 6-across is the maximum and cutting 2-3 inches off the width of the seat won’t do bupkus to allow for more than 6.

Okay, there is an issue with legroom. The argument can be made that at under 30-inch pitch, the economy cabin is the equivalent of a Roman slave galley with beverage service. But not with narrower seats. Just more rows.

The issue here is that these current configurations meet FAA emergency exit requirements. That raises the question of whether these standards need to be revised, based on factual data, not the opinions of some semi-comatose consumer gadflies.

The bottom line of this is that the media in general is passing on misinformation, innuendo and in some cases completely and intentionally inaccurate data.

This Can Affect Air Service Access. Aviation leaders need to be informed. Keep in mind, this type of bogus data could lead to the politically-driven inhabitants at the top of the FAA dictating new regulations that restrict capacity, which will in turn change operational economic for mid-size and small airports.

The only question is whether these cabins are safe.

Get the facts. Click here for the latest Aviation Unscripted video.

Ten minutes that can clear the air.

Monday Insight – October 31, 2022

The Effects of The Pilot Shortage: Part Real.
For Small Communities, A Lot Mirage.

It’s the staple headline in just about every story regarding loss of scheduled flights at a local small airport.

“Pilot shortage blamed for cancellation of air service.”

Or something like that. And it is in many cases completely misleading, because it is only one symptom of the raw, unescapable economics of an evolving air transportation system that are changing where connective network flights can be supported.

Addressing The Symptom. Ignoring The Causes. The inaccurate implication is that if we can train more pilots, these small local community airports (or, in the cases of not so small metro-peripheral communities, like Toledo or Youngstown) will see scheduled service come back with a vengeance.

There are intellectual witch doctors selling this line to many small communities, promising that with patience and a bunch more analyses, studies and speed-date meetings, all will be air service wonderful, by and by.

It won’t.

The issue of pilots is just one of the factors of entirely new and evolving air transportation economics affecting air service at the local airports in rural, small, and metro-peripheral communities.

It’s A Lot Deeper Than Staffing Cockpits. In clear fact, the “pilot shortage” for this sector of air travel is one result of much more fundamental factors, not the least of which are deteriorating economics of smaller airliners (a trend that’s been in motion since code-sharing started to eliminate independent regional airlines three decades ago.) This is also due to shifts in alternative competitive travel options for consumers.

The factors driving air service change are different at every community. But right at the starting gate, the truth is that the costs of air service in many instances are exceeding the revenues that can be generated in many route applications. That’s not a pilot shortage issue.

The travails of the decline in 50-seat jet economics, combined with much higher labor costs (including pilot compensation) are continuing to see the air service tide recede from marginal market flying. And marginal is more than just small communities. It’s also in play in a lot of hub feed markets at larger airports, too.

In a real sense, what we have is an “revenue viability shortage” that in turn is making applications of some resources, including pilots, a no-go item for markets where the traffic horsepower isn’t increasing along with costs of operation.

This is not a drill. This is not a situation that is reversable. Regionalization of air service access – connective air service access – is a continuing trend that is the result of airline industry realities.

The ULCC Placebo. One of the canards and misconceptions that must be stomped out is the belief that without scheduled flights at the local airport, the community will die economically.

That is, on its face, a complete falsehood. It’s even more intellectually disgusting when it’s accessorized with the nonsense that just getting a ULCC will be sufficient to rectify the situation.

ULCCs and network airlines are fundamentally different businesses. The main common factor is that both use airliners.

ULCC flights are great, but they represent a completely different product, one that’s galaxies away from connective air service access. Their product is in most cases offering low-fare access to vacation destinations, in the effort to divert and capture local discretionary spend.

In no cases, do these companies offer connectivity to the rest of the nation. That is not their business, and any entity that purports to represent that three weekly flights to Sanford is the equivalent of network carrier access, or that it will attract local business investment, is selling dangerous and dishonest snake-oil.

Economic Growth Is The Future. With Or Without Scheduled Flights. Today, demographics and business migration trends are pointing well for small communities in the USA. Changes in logistics and in communication channels are leveling the playing field for small communities to attract new business, and not having air service isn’t a deal killer to get that 50-job business to move in from Chicago.

Local airports are a key factor in this new reality – or can be, if they want to. Dust off that ALP and take a look through the lens of advantages compared to places in the nation where things are, well, descending into social fantasy land. Businesses and population want out.

Interested in moving to the future level of airport economic development? Send us an email.

Let your competition wallow on, focused on air service programs aimed at recovering the 1980s.

Instead, we’ll focus on the new economics of the 21st century.

Monday Insight – October 24, 2022

Small Community “Commercial Service” –
A Term That’s Undefined & Mis-Understood

For those who receive Boyd Group International’s weekly Touch & Go aviation update, this past week we pointed out one very hard fact facing the US air transportation system. One that has been completely ignored in all the din about pilot shortages and loss of small community access.

Airline fleet changes are shifting where air service can be supported. And where it cannot be supported.

That Market Study Is Useless If There’s No Airplanes. Increasingly, raw economics are eliminating the airliners that have any earthly chance of supporting connective air service at small communities. Like, fewer and fewer flying machines that can make any money or ROI. Those have gone away, and there are more that will be flying into the desert in 2023.

Needed: A More Direct & Honest Air Service Bedside Manner. Let’s be really clear. A lot of small communities are prime targets for intellectual confidence schemes.

It’s quite the process. There are aviation “advisors” who’ll urge communities to toss all the community money possible into revenue guarantees. Then form a civic task force and feed it enough flashy but inconsequential data as possible to keep the mojo flowing. Don’t forget the jive-time “catchment area” studies, promising a Moses-like march back to the local airport when air service returns. And don’t forget the leakage analyses, which are great placebo presentations for the next city council meeting. Just give the airlines this stuff, including at speed date events with pinata-selected airline meetings, and air service salvation is at hand.

There are a number of communities that could get an undergrad degree in this process, with no air service results.

But one clear analysis of the airline industry would end this charade in its tracks. A review of emerging airline fleets and strategies. The fact is that for connective network air service, increasingly there aren’t any airplanes.

Let’s wake up and smell the fleet mixes. It started in the 1980s, with the demise of 15-seat, 19-seat, 30-35 seat, and most recently 50-70 seat turboprops. Now, that march of economic realities is hitting the existing fleets of 50-seat jets – CRJ200s & ERJ145s. Without going into a lot of details, these airliners are facing massively escalating costs which just 50 seats aft of the cockpit door have increasing difficulty to support.

In fact, the entire segment of the airline industry from which major airlines lease-in these airliners (misnamed “regional airlines”) appears to be having its entire raison d’etre – the ability to fly with lower labor costs- ripped out. We covered this in the latest Touch & Go insight letter.

A Quick Sniff at Fleet Reality. All the king’s horses and all the community’s “market studies” won’t put this air service Humpty Dumpty together again. The airliners and the economic factors that allowed a lot of small communities to have scheduled flights at the local airport are now scrambled into history.

The 50-seat jets are being retired for economic reasons. Today, the only small jet in production that can fit under existing major airline pilot union scope clauses is the Embraer E175. It has economy seats wider than a 737, adequate overhead bin space, and a passenger experience that is compatible with mainline airliners. Indeed, the original feasibility reviews for this platform was to be a replacement for smaller mainline airliners such as the DC-9-10 and the F-100.

That is great. But with 76 seats it raises the bar in regard to being able to support the numbers of passengers that can be generated at a small community’s local airport. In many cases, that bar is out of reach.

The point here is that some small communities are getting hornswoggled into shelling out for ASD schemes before anybody asks the first primary question: Is there an airline with the fleet and costs and strategy that would be even vaguely interested?

For attracting scheduled flights, particularly at currently unserved small community local airports, here’s the answer: their likely are none. The aircraft now operated, and the economic factors don’t work anymore.

Anybody Ask The Flying Public? Another factor that many of these Pied Piper programs ignore is the consumer. Yup, the consumer.  The service that could – if possible – be supported at the local airport is almost never analyzed in regard to other consumer options that may be available. Or even if the contemplated service, say two flights a day, would be of material interest among consumers as a viable travel option. Read: cost, time-travel convenience, and vulnerability of off-schedule operations are things that will affect whether the local service is utilized.

The ULCC Option. The growth of the ULCC segment – which is essentially in a different air transportation system than major airline systems – is in fact a potential target for a lot of small communities.

In effect, these airlines provide an additional discretionary spend option for the community, offering low-cost, high-value leisure travel. But the model is not after filling air service “needs” but instead generating net-new traffic based on chasing discretionary dollars in the community.

That bar for recruiting flights is going up as well. However, a lot of communities are misled into thinking that since it’s “commercial service” it will do wonders to attract new business to the community. Face it. Having three weekly flights to Fort Myers is great, but it’s not air access. By itself, it won’t move the needle in getting more industrial investment into town.

The “Regional Airline” Industry Is Gone, By the Way. Along these lines, Boyd Group International has completed a brief and concise review of the changes that have taken place in the airline industry since the advent of code-sharing started the process of eliminating what was once an independent “regional airline” industry. We are sending it to our clients, and non-clients can order for $150 by a simple request on our contact page.

Bottom Line: Consider Regionalization. There are no magic bullets to address this. The hard fact is that the cost, raw economics, and communication value of air transportation have all changed. These are not factors that civic pride will fix.

Key futurist point: Rethink the economic potential of rural communities and local airports.

As BGI has pointed out to clients and at various venues, the vast changes in electronic communication have substantially leveled the playing field for small communities v large metro areas in attractiveness for investment.

Yes, air access is part, but a part with declining importance (conveniently) due to the ability to do business electronically. Mr. Nakamura no longer has to spend 30 hours traveling from Yokohama to meet with his staff at the Altoona facility. It works the other way, too.

Plus, in the din and smoke and mirrors of chasing ASD programs, some small communities are ignoring the new emerging trends in logistics and in lifestyle values in America. Think: which community has higher lifestyle values, Billings or San Francisco? Williamsport or Pomona? Johnstown or New York City?

Do a media search, or just watch the 6PM Ken-and-Barbie news to get an idea.

There’s a lot more opportunities for rural communities that traditional thinking allows.


The Touch & Go Newsletter

We’re honored by the interest and excitement in our weekly Touch & Go newsletter.

Issued at the end of every week, it outlines issues and thought-leader trends that are not always front-and-center in most aviation forums.

If you’re interested in getting on our distribution list, just click here, and request. We’d love to have you join the movement toward impactful aviation insight.

Monday Insight – October 17, 2022

Before We Start…

The Pilot Shortage – The Real Story

Enough hype and smoke regarding the effects of the “pilot shortage.”  It’s real, but it’s totally different in foundation and effects than is being discussed in the media. So, clear and mark your calendar for 12 Noon Mountain Time on Thursday October 2oth.

And log on to our Aviation Unscripted video site for a special Vox Deorum session with Captain Dennis Tajer, Communications Chair of the Allied Pilots Association, representing cockpit crews at American Airlines.

This will be a clear, concise discussion of the technical and operational issues facing airlines today in regard to staffing flights. We won’t be talking about union issues, or about the bargaining table. Just the issues surrounding the facts regarding what airlines are facing in this tough environment.

Clear 30 minutes – it will be worth the time to get facts that aren’t being covered in the media. Knowing how this came about and how airlines are working to address it is the subject of this Vox Deorum session.

The Aviation Unscripted Channel is reached by clicking here.

See you then!


The Aviation System Was Attacked.
Not Just A Couple Websites

We just had a security attack on USA airports.

To read the news, it was no big deal, just the hacking of the eye-candy websites of 14 airports, reportedly by some Russian-located cyber-vandals.

The attackers went after all sizes of airports, from Colorado Springs to Atlanta Hartsfield International. The message – missed by most of the supposed experts at the top of Homeland Security (if there are any left) – was that the vulnerability is completely across the aviation spectrum. No place is out of reach. LaGuardia or Kirksville are easy targets.

Also missed is that this represented an attack on the USA aviation system, not just a couple of websites. Sure, maybe half a dozen consumers who wanted to contact the lost and found at Des Moines were inconvenienced, but the message was that next time, it could be a lot more damaging.

Warnings Were Received Before 9/11, Too. For months before the attack on 9/11/2001, there were clear warnings about the failures of AVSEC – including the possibility of multiple hijackings at Boston. The Bush Administration ignored them. Worse, it took no remedial action after 9/11 in regard to the political creatures who allowed this to happen.

We just were made clear that there are threats right now, today. The open question for every airport in the nation is now whether the facility is sufficiently hardened against future attacks and mayhem, both cyber and physical.

Everything is in play – and probably the least vulnerable are passenger screening points. Air cargo, construction, catering, maintenance, HVAC systems, supply provision, etc. – could a terrorist get things through? Thinking like a terrorist is the key. DHS is thinking like reactive politicians.

The situation at the Department of Homeland Security does not lend much comfort to this situation. The DHS itself has been politically hijacked. Wake up and smell the rot – the recent attempts to have a special “disinformation” thought police within the department should have caused massive outrage for anyone familiar with history at fun places like, say Communist China or Nazi Germany. Think differently from the regime and there will be a price to pay. It is what they were planning to establish. Chilling.

Then the performance of the person in charge of the DHS in reporting on events on the southern border (read: outright lying) is another indicator. This is not the security A-Team by a long shot.

Point: anybody who writes this cyber attack off as just a minor event is sadly and dangerously mistaken.

Unfortunately, that includes the seat warmers at the top of the DHS.

Airports and aviation entities: the warning has been given. The security ball is in your court.


Monday Insight – October 10, 2022

Monday Insight
Is Paused For the USA National Holiday.

In the meantime, check out the latest Aviation Unscripted video just posted. It covers areas every airport, community and aviation company needs to consider – now. Unlike 9/11 and the arrival of the CCP-Wuhan pandemic, this time we have advance warning of major market shifts on the horizon.

The recession is here, the full effects on air travel and aviation are not yet in play.

Anticipating the further shifts, it and the increasing effects of inflation & recession demands futurist thinking.

Click on the icon and let us know your thoughts – then give us a call to discuss how we can identify and isolate both challenges and potential being brought on by the evolving economic issues.

Monday Insight – October 3, 2022

The Post-Ian Florida Vulnerability –
The Impulse Capacity Bubble Just Got Punctured

For several Florida airports, hurricane Ian just accelerated entry to the New Year. The hit to air traffic demand expected in the 1Q 2023 due to a declining economy is likely already started.

The combination of inflation, recession, and now the aftermath of hurricane Ian is likely to partially or in some cases materially deflate the bubble of impulse travel capacity generated to key points in Florida in the 2020-2021 period.

Relying on data from our friends at Cirium, we accomplished a quick comparison of the capacity changes at non-hubsite airports outside of the Panhandle (read: ex-Miami) between the full year ending in September 2019 and the same period ending September 2020.

The data illuminates a clear view of the fundamental changes in the air traffic foundation in the state.

While the actual total capacity was almost the same (down only about 1% in the current period compared to pre-CCP pandemic numbers) the destinational mix changed completely.

In effect, the traffic today is far more dependent on the ULCC expansions at secondary airports than any consistent organic growth across the state.

It has been ULCC increases – aimed at impulse travel, not organic demand – that has been the story over the last two years in Florida. Indeed, it’s a geographic and airline-determined story.

In short, Florida was a refuge for ULCC airline capacity in the 2020-2022 period, which also took advantage of what was pent-up travel demand in the post CCP-Covid period. (We’d note that MLB is an outlier in that it has attracted some international service that somewhat skews its data.) The traditional Florida markets continue to experience significantly lower capacity compared to 2019.

Airline Strategies Will Be The Window To 2023. What needs to be fully understood is that it’s airline strategies that are in play. The five airports which were the recipients of massive increases in low-fare capacity were beneficiaries of internal and independent airline-specific strategies, as opposed to having been deluged with massive landfill-destined “true market studies” from the airports involved.

This means it will be airline strategic decisions regarding capacity, competitive issues and fleet changes that will be the determinants of the future enplanement levels at these airports. However, as discretionary dollars are increasingly vaporized by inflation, it is the airports in green that are most likely to experience the most severe declines in traffic demand to fill the seats added in the last 18 months.

The other airports may well be affected by the recession, but they do not have any substantial or vulnerable excess impulse air service capacity.

The Near-Term Picture. The initial effects of Hurricane Ian will be substantial traffic hits in October and November, as tourism venues and other infrastructure are restored. But this is likely only going to advance the calendar for enplanement reductions as the recession deepens in the 1Q of 2023, and federal programs increase inflation during the same period. (Regardless of nonsense doggerel coming from inside the Washington Beltway.)

The prognosis for the airports in green is likely initial Ian-driven schedule reductions that will be very slow to be restored, if at all, in the latter part of 2023.

Short-Term Recession Forecast & Airline Trend Projections. The coming year will be one of enormous shifts in airline strategies. Boyd Group International is accomplishing.  recession-focused airport trend and enplanement forecasts for key clients. It will be a very different 2023 from what was expected just six months ago.

Get prepared. Hit the Contact button and send us an email to start the conversation specific to your airport.