The 2018 Trend Outlook.

Looking Beyond The Consensus.

The 2018 Boyd Group International Aviation Trend Outlook is now available.

In the document, we cover several areas where evolutionary and episodic change can be expected in the coming year and beyond.

Boyd Group International has a track record of forecasting trends that are missed by other sources. The reason is simple: we do not accept at face value the “consensus” or what may be described as “ambient thinking.”

Those terms are just alternative descriptions of making sure that there are no risks taken and there’s no potential of challenging the entrenched thinking of the status-quo.

For more than three decades, Boyd Group International has built a track record of assisting clients from across aviation and across the globe in identifying new future opportunities. In doing so, we don’t go by the book. We write the future book.

Below are some basic subject synopses of the 2018 predictions and trend projections in this year’s BGI Aviation Trend Outlook. To view and download the complete document, just click here, and we’ll get it to you ASAP.

If you have any questions or input regarding this document, please let us know.

And, of course, if you need futurist aviation research, forecasting or consulting, we stand ready to assist.We would point out that many of the trends outlined herein are indicative of the scope and structure that will be delivered at the 23^rd International Aviation Forecast Summit, August 19-23, 2018, hosted by Denver International Airport.

CEOs and senior executives from across the industry and across the globe will be here to openly discuss the future. No boring “panels.” Instead, direct discussion and exploration of the future from those who are shaping it.

To reserve your space and for more information: www.AviationForecastSummit.com Special New Year registration rates are now offered.

2018: Looking To A Strong, But Global 2018

Traffic Trend: Fundamental Growth… Plus More Impulse-Buy Capacity

Let’s put it on the line.

The hand-wringing from some in the financial world about airlines adding too much capacity in 2018 is strictly Chicken Little. Capacity discipline is firmly in control.

Look For @ 4% More Seats, But Less Than 3.5% More Flying. As of January 1, US carriers are scheduling a 3.9% increase in capacity for the first six months, compared to the same time period in 2017. Most of the reporting on this implies that carriers are simply adding flights on top of existing ones.

In some cases that is accurate, based on very high load factors, and particularly in cases where the carriers’ connecting hubs experience “hub-choke” – when there is demand for more feed through the hub, but the connecting banks to major destinations are functionally fully-booked.

But in other cases, much of the increase in capacity is based on network carriers (American, Delta, United and Southwest) adding new markets – particularly trans-border and international.[1]

Also adding to the capacity picture is the expansion of the “parallel airline universe” – ULCCs expanding and offering fares that transcend ambient market “demand” and establish the travel product as an alternative application of discretionary dollars.

Wildcard: In any case, the recent reduction in the corporate tax rate, could result in carriers adding more capacity to meet newly-generated demand in the fourth quarter of 2018.

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2018 Trend: Hub-Choke Increasingly To Affect Route Planning

For airlines, experiencing very high load factors in key major markets to and from the carrier’s hubsite operations are generally positive.

However, this dynamic also represents some traffic spill – where consumers in, say, Abilene find it difficult to find space on the connecting flights from DFW. In some cases, carriers will use sophisticated analytical systems to build highest and best use scheduling – in effect weeding out feed markets that are the least revenue-productive for limited hub capacity. Expect more of this in the coming year.

Enter New Fleets:  With the phase out of what turboprops are left at American and United, and upgrade to increasingly cost-inefficient but larger 50-seat jets, more planning pressure will be but on network carriers to again review which small-airport routes  make the most sense in light of the major routes to which they feed being at or near functional capacity.

Now add in the new dynamic of AA, DL and UA creating new “basic fare” buckets, which are applied mainly to retain and attract more nonstop O&D traffic in key major (read:  nonstop hub) markets. This will further put a strain on the availability of capacity for smaller communities that depend on connect access at the hubsite.

The result is that, in many small-community feed markets, a load factor of 65% to the airline’s hubsite is functionally a “full” flight. There simply are no more seats available through the connecting hub.

This will continue to be an issue for smaller communities dependent on air access through a fully-booked hubsite operation. In many cases, these airports will be more than able to support the additional capacity to the connecting hub. Some, however, may be facing a potential pull-down in service.

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2018 Trend: Small Community Air Access: Fantasy Is No Longer An Option

Many small communities need to come to grips with the three major and largely irreversible trends that are shaping air access from the globe.

• Hub-Choke. This we cover above, but what should not be ignored is that there is often no alternative airline to enter the market from their connecting hub. When the distance to the UA/IAH hubsite represents more cost and more airplane time than the revenues that the market can generate, no amount of “market studies” will create more airlines or change economic realities.
• Eclipsing Costs. The emerging “floor” for feed fleets to network systems is the 50-seat jet. It is being retired – slowly, now that fuel costs are where they are – but they do represent a higher revenue bar for communities to meet.
• Consumer Preferences & Alternatives. Increasingly, within the emerging economics of airline operations, the type of scheduled air service that some smaller communities can support at the local airport is DOA. That’s because in many cases such service is consumer-inferior, less time-efficient, and actually less convenient than an hour’s drive (or even in some cases, even a 90-minute) drive to an alternative airport where the population (or an airline’s connecting hub) can support much wider flight access. This is another dynamic that no amount to civic hubris or more expensive and misleading “studies” will change. Regionalization of air access is an emerging reality in some parts of the US. It should be recognized and embraced, because the air transportation system isn’t returning to the 1980s.

That’s because in many cases such service  is consumer-inferior, less time-efficient, and actually less convenient than an hour’s drive (or even in some cases, even a 90-minute) drive to an alternative airport where the population (or an airline’s connecting hub) can support much wider flight access.

Regionalization of air access is an emerging reality in some parts of the US. It should be recognized and embraced, because the air transportation system isn’t returning to the 1980s.

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2018 Trend: More EU Nonstops From The Heartland

As was first outlined at the 2013 International Aviation Forecast Summit, key non-hubsite major US airports are prime candidates for EU carriers to add to their global systems.

For network carrier system such as British, Air France and Lufthansa, the traffic feed to their hubs in Europe from large US cities such as New Orleans, Indianapolis, Nashville, etc., can be very attractive.

The key factors for this service are generally, 1) a strong local population base, 2) very strong installed base of internationally-focused industry, and 3) – most important – strong highway network access from a wide population region.

This latter factor is important, as a nonstop London flight from, for example, New Orleans, is more convenient for folks to drive to from Gulfport, compared to the complexity of making a flight connection over IAH or ATL.

In addition, the massive expansion of impulse service to the Continent by WOW and Norwegian will open even more access. In these cases, however, the US point will be more of a destination, as opposed to a generator of feed traffic.

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Potential Trend: China Moving To Acquire Foreign Aircraft Manufacturers

Boyd Group International research in the China aviation market indicates that we may see very significant and elsewhere-unforecasted moves by China to expand its global presence.

In particular, there is a very real potential for Chinese entities to make a move to acquire either Bombardier or, more likely, Embraer. We believe the recent Boeing outreach to Embraer is at least partially a pre-emptive move.

Point: China is intent on becoming a major player in the airliner sector. Its current indigenous platforms are not going to be able to accomplish this. Therefore, an acquisition of Embraer or Bombardier (or, possibly another player we won’t mention right now) is not out of the question.

The potential shifts in relationships among suppliers, and the impact on the commercial direction of the US airframe and powerplant sectors would be very far-reaching in broadening the presence of Chinese business in America.

From that perspective, BGI predicts that more US airports and venues will be moving to become more welcoming to the Chinese leisure and business visitor.  To be sure, just about every US gateway airport claims it is ready for these travelers… but in most cases, Mars has better wayfinding and welcome than US facilities.

It goes beyond having a Mandarin speaker on-site, and it goes beyond veneer things like ice water in restaurants. We point out that the poor misled airports that have been sold an “international translation” website feature that includes Chinese are simply making themselves look really amateur and silly to the Chinese consumer. The translations are abominable.

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Fuel & Labor Issues

It is understandable for financial analysts to be concerned regarding the potential effects of changes in these two key cost factors on airline bottom lines,

From a rational perspective, these are important to watch, and it is near-certain that in the next 18 months, labor costs will impact the bottom line at a number of carriers. However, given the expected robust demand, there are no thunderstorms on the horizon for 2018.

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These just scratch the surface of what to expect in 2018…There’s a lot more to explore.

To view and download the complete 2018 Aviation Trend Outlook, just click here, and we’ll get it to you ASAP.

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 a 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.

Nope.

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 event-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 for 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 oh-so-cordial B-roll walk-and-talk pieces with the TSA administrator 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.

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And Finally…

Thanks to the many folks who commented on last week’s discussion of how a lot of traditional “air service development” schemes simply mislead small communities into the planning weeds.

As we’ve pointed out to our clients, all channels of communication have fundamentally changed in the past 20 years, and that includes the applications and effectiveness of air transportation. Most traditional ASD programs simply pander to small communities’ natural desire for scheduled flights at the local airport, instead of candidly outlining new realities.

To be sure, that’s probably not a popular position in a lot of circles.

But, then again, maybe it’s a lot more understood than it may appear, judging from the positive input we’ve received from professionals across the industry spectrum.

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Update: November 20, 2017

Keeping America Connected To The Globe…

Accept It… It’s An Inter-Modal Future. 

American Airlines is dropping flights to Laughlin-Bullhead City.

It sounds like a minor adjustment in a big airline system. But it’s a lot more than that: it’s indicative of the new realities of air service access for small communities, and is just the latest example of how small community air service access needs to move beyond 1980’s planning.

Initiated last year and supported by a federal Small Community Air Service development grant plus a reported $250K in local marketing, the flights to the American Airlines hub at Phoenix clocked in at something like a 44% load factor.

There was nothing wrong with the AA Eagle service. The two segments had great connections to AA flights at Phoenix. But it failed miserably.

Actually, this shouldn’t be a surprise. The service was simply not competitive for consumers, even though they were the only scheduled flights at the airport. The fact is that consumers had other scheduled air service options that were qualitatively and quantitatively vastly superior. The difference was that these options are at Las Vegas – 90 minutes away.

This is a poster child for the need to rethink all air access planning at small communities. Here’s a hard question for small communities: do you want “flights” at the local airport, or do you want air access. The two are not always the same.

Yeahbutt, We Need It. It’s natural for communities to believe that service at the local airport is an economic necessity. But that’s sometimes neither possible, nor beneficial. The shame is that most current “air service development” approaches pushed onto small airports focus on keeping small communities locked into outdated planning and obsolete approaches that don’t have a snowball’s chance in Miami of connecting them to global economy. In fact, a lot of this thinking is based on an airline system that no longer exists.

Reality: air transportation isn’t economically possible or “consumer-possible” at many small community local airports. This is anathema to even suggest to the local mayor, but it is a reality that needs to be dealt with in economic planning. In many cases, it is a dead-end in regard to accomplishing the main reason for scheduled air service, which is having access that consumers can use from – yes, from – the rest of the globe

It’s About Access. Not Just Local Flights. It’s not that there isn’t traffic generated at Laughlin-Bullhead City. The hard fact – ignored in most small-community ASD “studies” – was failure to understand that just having flights at the local airport often isn’t necessarily more consumer-convenient than other options.

In this case, the 90 minute drive to Las Vegas, which hosts nonstop flights around the globe, is far more valuable than low-frequency local flights that connect to a single airline system at Phoenix. The total travel time for consumers to most destinations was likely far less at Las Vegas, even with the drive to McCarran International. And the flight options at LAS are galaxies beyond the AA hub at PHX.

(In fact, Las Vegas McCarran International has more nonstops to more cities than any other US airport.)

Point: local connective air service at small communities can be successful only if it is superior to other consumer options. It isn’t possible at Laughlin-Bullhead City. It isn’t at places like Topeka, Naples, or Youngstown, either. It’s the nature of airline business and airline economics. Consumers in these places are fortunate – they have great air service access… it’s just can’t be viable from the local airport in contrast to other, better options. Even with a longer drive to the gateway airport.

It’s called total air access time. But it’s one dynamic that’s steadfastly left out of most of the air service development studies delivered to small airports.

Always Sunshine Results. Funny. It seems that just about every “study” done for very small communities to “find more airlines” always comes back with a positive conclusion, but one that assures that more consulting work will be needed… like maybe a “diversion study,” or a “catchment analysis,” or other efforts.

But in most cases, the actual airline – the one or ones that are potential viable targets – are usually not mentioned. It’s implied that there are lots of airlines out there – and connectivity levels from the rest of the globe aren’t really mentioned much.

It’s hard to find any of these projects that ever even hint that there may not be “another airline” even vaguely interested, or that there are better consumer options that may be lethal to potential service at the local airport. Or that illuminate the potential for air access strategies other than non-viable flights at the local aerodrome.

Keeping The Blinders On & Hoping For The Best. Usually, the only factors focused on in most traditional “air service development” programs are things like the “needs” of the community, or the glowing results of a recent unscientific online survey, or a grand “catchment study,” accessorized by lots of expensive point-of-sale data that isn’t particularly comprehensive, but looks great on that heat map illustration. And, usually, no identification of whether the community fits into any existing airline’s strategy.

Air transportation is all about better travel options. In many cases, the service that a small community can support can’t meet that standard.

Again, the future is in assuring air access – and often the local airport won’t be in the play. Yet most ASD schemes simply keep communities focused on the past, instead of crafting plans that adjust to the new air transportation economic realities.

In 2018, we’ll see fleet changes in the major network airline systems that will accelerate regionalization of air access.

And this will accelerate the need for regions to re-think air access strategies. Traditional ASD studies will only divert energies from finding regional solutions.

Bank on it.

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Update – November 13, 2017

Starting Out This Week…

“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.

By the way, don’t get too comfortable if your website has a machine Google translation… you look really foolish to Chinese visitors and web designers who include this aren’t doing you any favors.

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 www.ChinaNiHao.com.

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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 perfect 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.

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 your bookie that the yields are close to bargain-basement and the costs of 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, “predicting” a decline in expected performance of US-Cuba  markets.

It’s always safe to predict what’s already happened.

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Update – November 6, 2017

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, has bought a nearly 10% share of Cathay, which does have some presence for code-sharing with AA to points in SE Asia. Nevertheless, a China Southern code-share at PEK outshines by far what AA could lose from CX potentially pulling out of oneworld.

And speaking of Middle Eastern carriers Etihad has announced that they are dropping service to DFW, because of, they say, AA’s decision to cancel their  code-share agreement.

The point is whether yields made any sense. Film at 11.

(Note: thanks to the folks who corrected our mixing Etihad and Qatar in the initial posting!)

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The “Pilot Shortage” – Choking Air Service?

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 to attracting candidates for the profession.

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.

Airport Input?  That brings us to the airport industry. 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 more aggressive stand. To be fair, there are efforts, but they are drown out by cheap politicians playing to emotion, and dishonest media that postures the 1,500 rule as a not-to-mess-with rule.

Maybe a call for additional scrutiny of what can be done to keep skies safe and air transportation un-choked is now in order. And, indeed, consistently responding to these political mediocrities and special interests that their love for an arbitrary rule, instead of comprehensively improved training and oversight, it not making the skies any safer.

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.

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Update – October 30, 2017

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 1Q 2017 v those in 1Q 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 top ten 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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For a free trial, click here. We can have you on line literally in minutes!

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And, as a reminder…

It’s Now On The DOT Docket

The 2017 Small Community Air Service Development Grant Program

The docket is issued… not much change from last year… $10 million allocated. The same qualifications and filing requirements.

If your airport and community are interested in exploring whether a SCASD grant is the right approach, we’ve put together a free comprehensive guide that explains the program, and candidly discusses the pros and cons of whether to apply.

Unlike other consultants, BGI is very careful to work with our clients to assure that they aren’t chasing dry air service holes with an application. The program since 2002 has been riddled with applications that, even if successful, led nowhere in gaining new air access.

So, we’d be delighted to talk regarding the potential of a SCASD.

While we’ve won more grant dollars under this program than any other consulting firm, in the past four years we have been very careful regarding accepting these projects. We focus on pursuing results for our clients.

Click here to request the SCASD Guide… we’ll get it right off to you. Then give us a call.

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The Update

Proposed 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  management change in the front offices of the family. But at the end of the day, the rest of 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 ago 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. No cleaning of house. 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 intend to keep the current staff, structure and modus operandi that’s there already, i.e., the system that doesn’t produce results.

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 are 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.

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Update October 16, 2017

Selective  Security Outrage

One prime reason that, truth be known, AVSEC is still wallowing in a bureaucratic quagmire is that most of the aviation industry is loath to criticize the system.

Or, worse, mesmerized with the PR that comes out of the Department of Homeland Security.

The latest example is the strong objections of one flight attendant union to Pittsburgh International opening its shopping mall terminal to access from non-ticketed visitors.

The righteous outrage is well-scripted. This move by PIT will reduce security and threaten the flying public, is the claim.

But this same oh-so-concerned union never made any loud noises whatsoever when it was found two years ago that screener tests were being flunked at a 96% rate. Or, when other such information comes to light about the sloppy management of the TSA.

Whether or not PIT’s new policy will denigrate security is not the issue here.

The issue is that there are lots of aviation-related  and travel-related organizations whose credibility should be zero.

Taking on an airport is easy.

But daring to criticize the incompetents at the top of the TSA, well, that’s another story.

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Update October 9, 2017

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…”

Yikes.

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, there is the contention that’s lethal to the report’s credibility. “… leading to empty planes…”

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% system 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 reveal that in September the average WN flight had just about 122 passengers on board v 125 last year. That’s not empty.

It does not say that a few more seats on average were unoccupied. They didn’t say “empty seats.”

It does no explanation of any shifts in the WN route system that could explain the change in these measures.

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

That’s fake news. To the consumer, “empty”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.

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Update October 2, 2017

Travel Industry: Where’s The Leadership?

Here’s the brief but accurate outline of what has become the political football of choice.

The Trump Administration is planning  travel restrictions on several countries, all of which have been determined to be places with inadequate counter-terrorism programs. Eight of these have populations that are predominantly Muslim.

Now, the number of travelers from these places is miniscule, and has very little impact on the US travel industry. It’s strictly based on security issues. As far as the US as a destination goes, this should be a plus to attract more visitors.

Get Political. Make It Something It’s Not. Unless, of course, the program can be accused of being a wider scheme to keep foreigners across the board out of the US. It is a  crackpot and dishonest attempt to shift truth into political fantasy. But that defines a lot of what goes on within a lot of political entities.

Now, because there are Muslim countries involved, the ACLU and other groups have declared the program as being one of racial discrimination, and by association, anybody who does not oppose these new restrictions is a racist. So, just because the implication of racism has been made, the safe path is to not call it for what it is: garbage

The fact that these countries – which do not represent anywhere near  the majority of the global Muslim population –  have been determined not to have adequate anti-terrorism programs in place, is left out in the pathetic brown-shirt-like protests about “hate” and America being a land open to all. Including, it seems anybody who may want to come in.

This notwithstanding all of the Islamic terror over the past year, and the fact that at last we have an administration that recognizes the threat.

And, contrary to what the ACLU and their political supporters are spouting, and the media is parroting like a cheap tape recorder, this not a blanket ban on Muslims. To imply that is a lie. It’s as stupid as if the ACLU sued ISIS, claiming they discriminate against hiring Christians.

Travel Industry Organizations: Closet Supporters of The Fantasy? Now, enter the travel industry. Instead of working to counter these dishonest missives, they are side-stepping them, and don’t have the gumption to bring out the whole picture.

The message between the lines from these travel organizations: These restrictions are silly and unneeded and damaging. No attempt to investigate regarding whether there are security issues involved.

One group has urged the president to re-affirm to the nation that these actions are not meant to harm travel demand to the USA. Like, if the full facts were reported, or even illuminated by these travel organizations, that comment would be completely unneeded. They should be getting the full story out. They aren’t doing that.

But apparently these Washington travel groups buy into the dishonest party line that it’s all about dimbulb racial discrimination. They don’t want to tell the whole story – which is their job, by the way.

Create The “Message” – And Then Claim That It’s “World Opinion.” Another travel group has warned that these actions are sending messages to the world that foreigners are not welcome in the USA. The only “message” is the one being sent by these organizations themselves.

The “message” is coming directly from the travel industry – it’s an inside job.

Having the US restrict travel from a few places where there are indications of lack of proper security should be something that they would embrace as a positive factor to visit the USA.

Instead, they are tacitly (at the least) providing support to the dishonest sectors that are claiming these restrictions are racially-based, and are just smoke screens to discriminate against Muslims. That’s a complete failure in leadership on the part of the US travel industry.

Do a search. Not one travel industry leader has come out to even outline the reasons for the restrictions, but instead have cowardly tried to spit out milquetoast comments that assure that they get no criticism from places like the ACLU or others in Washington who put politics ahead of national security.

Shameful.

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Archives…

June 19 Update…

SCASD Docket 2017…

What do these airports have in common?

Sarasota. Bozeman. Charleston. Santa Fe. Fresno. Midland. Binghamton. Erie. Richmond. Bangor. Spokane. Shreveport. Latrobe. Traverse City. Springfield…

They’re a few of the examples of where a BGI-crafted Small Community Air Service Grant Application has led to recruitment of new air service.

Since the SCASD program’s implementation in 2002, Boyd Group International has been at the forefront of crafting innovative, successful grant applications for communities across the nation.

In fact, we’ve assisted our clients win more dollars from this program than any other consulting firm.

The DOT is expected to issue the docket for the 2017 Small Community Air Service program shortly. We’ve just completed our Guide To Filing A Successful SCASD Application. It covers all the bases – what the program does and the issues that communities should include when considering applying.

The Guide outlines strategies for crafting an application, as well as the traps and mistakes to avoid to assure a competitive filing.

The Guide pulls no punches and discusses the factors airports need to consider before making a filing decision. We candidly review the types of grant uses that will get the DOT’s attention, as well as how to define which “air service deficiencies” can be addressed with a grant.

The Guide is complimentary, and can be requested by clicking here. Go there, and we’ll get it right off to you. It will give you a candid and forthright review regarding whether a SCASD application is a viable path to enhance your community’s air access objectives.

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Monday Update, June 19, 2017

Trump’s Cuba Policy

It Could Give Airlines More Cover To Pull Down Gracefully

It’s not there. And won’t be there for years.

We’re talking about the supposed expected boom in air travel to Cuba. The one that Trump’s new Cuba policies supposedly will harm.

It’s pretty hard to cut back on things that don’t exist.

Such as the supposed “great opportunities” for US business and for US airlines in Cuba that certain folks are now criticizing Trump for trampling upon.

Let’s Recap Realities. Boyd Group International’s independent reports on the Cuba “opportunity” in 2009 and in 2014 were very clear – and very accurate on the future of air travel potential with Cuba. That “bonanza” is years away, and entirely in the hands of the Cuban government.

So, Where’s The Common Business Sense? There is no business foundation in Cuba. There is no consumer buying power. There is no free trade. There is limited leisure-travel infrastructure, and what’s there tends to be of the “adventure” category.

Message: Tossing 737s into Cuban airports that have no traffic won’t create it. Nor will that change the people who are responsible for this economic mess.

Most of the businesses, such as they are, are run by the Cuban military, the same military that makes very sure there is no political dissent on the island. Their citizens can’t travel freely, let alone speak freely.

The air traffic bonanza that the media and the travel industry parroted as if it just got belched up at Delphi is a complete dud…and nothing Trump did, didn’t do, or might do, will change that.

Too Bad The Cuban Government Doesn’t Agree. But now watch the oh-so-concerned-about-humanity types denouncing the Administration’s latest actions. Funny, but we don’t hear these same “humanitarians” denouncing the people who’ve made Cuba a showcase of totalitarian mismanagement over the last half century.

Somehow, their twisted logic is that it’s the US that’s keeping Cubans in near-poverty, in an environment where free speech is dangerous and political repression is the foundation of the cleptocracy running the country. All that’s needed is more travel access, and all of that will change. It’s up to us, see.

It’s reminiscent of the anti-war protesters in the 1960s.

Funny, they never tried a few bars of “Give Peace A Chance” in downtown Hanoi.

It’s pretty much the same thing with the folks hyping Cuba “outreach.”

They have a message. But it’s devoid of any semblance of integrity – much like the Cuban government they refuse to criticize.

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Monday Update, June 12, 2017

To Start This Week…

Congratulations to Traverse City… New Nonstops to DFW on American start this week.

BGI is proud to have assisted TVC with the successful Small Community Air Service Development Grant that made the service possible, as well as working to recruit AA.

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Before We Launch Into This Week’s Insight… Clear Your Calendar 

Air Access Realities & Opportunities 401

Hub-Choke. Road-Hubbing. Consumer Alternative Dynamics. Fleet Shifts.

You won’t hear about them at “air service development” events.  But these are the factors that are now critical to understanding how the new air transportation realities will affect air service access in the future.

Planning The Future With Futurist Metrics. Three years go, the IAFS outlined how traditional “air service development” approaches were becoming obsolete, and were founded on an airline system that no longer exists.

Furthermore, they tend to focus on what the community “needs” instead of what the new realities of airline economics can deliver.

Blind reports such as “true market studies” and “drive analyses” and web-based “cost calculators” merely measure things – often not very well – instead of delivering insight that relates to forecasting the future. And that means a lot of these exercises only deliver flashy and expensive documents.

That’s because most of these ASD programs are accomplished in an absence of honest professional knowledge of the emerging dynamics of the consolidated airline industry, so the numbers just measure the past, instead of forecasting the realistic future.

On August 27, there’s a new Workshop that will illuminate whole new directions to assure viable air access from the global economy.

Air Access Realities & Opportunities 401 will go into the new dynamics that airports and communities must deal with, such as analyzing what consumers will actually do in the real world of air service alternatives, not what they say on an unscientific survey that asks softball questions, the answers for which have no bearing on consumer behavior.

We’ll outline new consumer trends. Things like road-hubbing, which represents strong opportunities for some airports, and tough realities for others – realities that a “leakage study” or web-based “cost calculator” won’t change. We look at hub choke – a factor that requires forthright analysis of the value of the traffic that a market can deliver. We look at the new applications of new-technology fleets.

These are core planning factors that “ASD” ignores completely.

The global economy will affect all airports. So we’ll look at the regional consumer air access effects as airports such as Columbus, CVG, Sacramento, Indianapolis and others gain long-haul international access.

This all goes way beyond current “air service development” – because it addresses the future.

Bring your board members to this Workshop. The mayor, too. But come ready to work… we’ll be covering and discussing issues that will pummel a lot of ambient thinking.

For more information on the Summit, and the other exciting pre-Summit Workshops, click here…. And get prepared for whole new perspectives beyond shopworn “ASD” concepts.

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ATC Privatization Pro & Con

Either way, It’s Preserving Incompetence. Not Fixing It.

It’s rare to have a dispute where both sides are flat wrong.

But that’s exactly the case with the brouhaha with ATC privatization. The “pro” side is spouting off all manner of nonsense about how privatization all by itself will magically lead to better air service, less cost for the consumer, and more efficiency in moving airplanes across the skies. Instant solution!

Nowhere do they state how this will all happen, except for some babbling about “reliable funding,  government red tape removal, and – of course, “it’s satellite based!”

The anti-privatization folks are much more creative, albeit just as far off the mark as the pro crowd.They claim it’s a giant power grab by the airline industry, who will use ATC to cut off air service to small communities, and use it to their evil advantage to make more money. Small airports will be savaged by a greedy cabal fixing to torpedo their economic future. It’s right up there with the Chicken Little stuff that’s been spouted about the proposals to end EAS. Lots of self-righteous emotion. Short on facts.

Neither side has ever – ever – focused on the reasons that air traffic control is a Third-World mess. In fact, both sides, most of the members of which couldn’t tell the difference between ATC and an ATM machine, are in total agreement on keeping the two things that are at the root of this 40-year-old scandal.

Those are NextGen – which they accept like a pack of gullible “marks” at a rigged carnival game – and the sheer incompetence of the management of the ATC programs over the last four decades.

NextGen itself – and any honest review of the history of this program shows this – has been a parade of shortfalls, missed deadlines, dishonest promises and wasted money. But the veneer “experts” talk about it as a miracle, and it’s only funding that has held it back.

Now, it’s not politically correct to point out that the NextGen emperor is as naked as a jaybird. After all, every media story touts the program as the new messiah of the sky. “Course,  none of these reporters ever check the source.

The second reason for the ATC program swamp is more fundamental. There is no accountability for failure or mismanagement.

There is total agreement from all sides of the privatization issue: NextGen is not to be questioned, and the people responsible for this mess are not to ever be held accountable..

Neither side – and heaven knows the media, too – have ever bothered to check out GAO and DOT IG reports on the NextGen fiasco. The reports are clear: the entire program is a misfire when it comes to delivering a clear, well-visioned system to meet the future. Deadlines missed. Timelines revised. “Delay” stats with no real improvement.

And this in the light of the fact that last year there were 15% fewer airline flights than in 2007.

And both the Trump Administration and its opponents want to ignore it all.

So, don’t fear change. As for the ATC fiasco, there won’t be any.

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Update: Tuesday May 29…

Recognizing US Memorial Day Holiday

Media Stories On Aviation. Caveat Reader.

There are, in fact, several outstanding media professionals reporting on the airline industry.  A number of them are experts on the subject, and by themselves are outstanding sources of knowledge and insight.

However, they are denigrated by a few others in the Fourth Estate who really need to find alternative employment.

In the last few weeks…

Quoting Great Sources…When a JetBlue flight returned to Buffalo after it hit a bird, a random passenger tweeted that the plane hit a seagull – specifically that species – and cracked a turbine blade.

Incredibly, a Fox News story just repeated it. Like, as if it had any informational value. This was regardless of the fact that there was no visual damage to the engine, and the passenger involved probably wouldn’t know a turbine blade from a popsicle.

Yet that was included as a key part of the story. Sources, anyone?

Stretching Hyperbole To The Non-Factual. The New York Times ran an article on how empty Memphis International Airport is, with lots of discussion and pictures of gates left over from when Delta had a connecting hub there.

The tone was vaguely in the direction that the place was a dying, crumbling ghost airport. Actually called it a White Elephant – a term that implies that the airport has somehow screwed up.

But the New York Times conveniently left out the major air service changes at MEM since the elimination of Delta hub operation, such as Southwest, Allegiant and Frontier coming to town.

Further misinforming the reader, the story showed a picture of airplane models on a shelf in the director’s office with this flatly stupid, and unprofessional comment: “Scott Brockman, the airport’s chief executive, can often see more planes on his office shelves than at his terminal’s gates.”  An absolutely inane comment that has nothing to do with the status of the airport.

Also missed by the New York Times… local traffic at MEM is actually up from when those now-empty gates were clogged with passengers, most of them connecting on Delta.

Oh, yeah – and MEM fares today, adjusted for inflation, are down 15%.

Consumers and readers would be more interested in these statistics than the contents of the airport director’s office shelves.

Gotta ask: what else in this newspaper is vapor-brain reporting? Or intentionally slanted….

Going Trendy Instead of Factual. And there’ve been the oft-repeated stories on how US airline seats have shrunk in width over the years, this sometimes coming from  supposedly-prestigious financial mediums.

A commonly-reported statistic across the media is that seats are now averaging 16.5 inches across in US airliners. It’s flat out not accurate, but it makes great reading. Fiction often does.

If It’s On In Prime Time, You Shouldn’t Question It. No need to touch on the 60 Minutes story on Allegiant. There have been a number of aviation folks who have taken it on.

Quoting Numbers That They Are Clueless About. Then we have the nonsense reports every quarter after BTS data is posted, when reporters without a clue start confusing “passenger spend” with “average fares” and then compare them across the nation, assuring that nobody gets informed.

Creating “Trends” That Aren’t… How about recent stories regarding “why airliner windows keep cracking,” in light of the Southwest accident and a few other reports since. The fact that none of these events have any causal relationship to one another is blissfully missed.

Point: while the majority of aviation coverage intends to be direct and factual, there are a some decaying apples in the media basket.

Some are just misinformed.

Others, apparently, intend to misinform.

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International Aviation Forecast Summit News

United President To Participate At The IAFS™

Once again, we are honored to announce that Scott Kirby, President of United, will be joining us at the International Aviation Forecast Summit in Denver, August 19-21.

Mr. Kirby joins CEOs and senior executives from air carriers across the market spectrum and across the globe who will be at the IAFS™ and helping us explore the future.

What sets the IAFS™ apart from other events is that we don’t do boring, rambling and unfocused “panels” of attendees. Instead we focus on free-form one-on-one discussions with the distinguished industry leaders who attend.

If you haven’t registered yet, we’d suggest you do so now. Click here to review the tentative agenda, and then make the decision to come to Denver this August.

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Announcing!

Special Reception & Presentations –

Boom Supersonic

If you can get to Denver a day early, you can get an additional view of the future.

Boom Supersonic is hosting a special reception on Saturday, August 18, at its new headquarters and research center at Centennial Airport.

Blake Scholl and his team will be outlining the progress of the 55-seat, 2.2 Mach Boom airliner, as well as the one-third scale “Baby Boom” research and proof-of-concept aircraft that will fly in 2019.

Japan Airlines is on-board. So is Virgin Atlantic. So is Ctrip – China’s largest travel-related company.

The world is getting on board. Join us August 18 and discover why

For more information on the Summit, and to register, click here.

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Monday Update – May 21, 2018

The Cuba Accident – Be Careful of The Political Spin

In the wake of the tragic crash in Havana, there have been several corollary stories outlining how the national airline – Cubana – is a safety question mark.

It certainly is.

Their fleet is reportedly in a state of functionality just ahead of a Budweiser display, and their operational record is also reported to be a world-beater – in the wrong direction. This has been illuminated in several follow-up stories.

Unfortunately, these articles about Cubana occasionally have been accessorized by completely inaccurate implications that this flying junkyard (once one of the Western Hemisphere’s best airlines, by the way) is due to the embargo on US trade with Cuba.

The political spin: It’s at least partially the fault of the US that Cuba doesn’t have a safe airline.

According to the lore, the US embargo is restricting access to parts for their current fleet, and cuts them off from Western financing for new airliners, which would be easy to get were it not for the nasty embargo. And, according to the spin in one major city newspaper, the embargo forces Cubana to have to wet lease airplanes from second-rate, semi-reputable operators, like the one involved in the Havana crash.

That is all fake news.

Havana Accident: It Was A Mexican Airline… Let’s start with the Havana event… The 737 that crashed was wet-leased from a Mexican operator. There are no US prohibitions or trade embargos or airplane parts deprivation policies that apply to Mexican airlines.

So, if that company had a safety problem, it has nothing to do with any US policy toward Cuba. It’s the Cuban government that hired this airline and its 737-200 that originally entered service with Piedmont in 1979.

An article in the New York Times spun this, implying that this was Cubana’s only option: lease from operators on the edge.

Which is fake – the Times knows that there are lots of companies that wet-lease airliners, and most are safe. It was Cubana’s decision to put its passengers at risk by using the company involved.

Let’s Talk Cubana. It has been reported that just last week a substantial part of Cubana’s fleet was grounded for safety reasons.

Some implications have been made that it’s due to lack of parts, and again, the distant if not direct allegation that it’s due to the US embargo. Cubana, supposedly, can’t get stuff to fix their fleet, and it’s the nasty USA that’s the reason.

The torpedo of truth in this case is that the airplanes that Cubana has sitting grounded – a total of 16 flying machines – include just four – count them, four – western airplanes, all ATR-42/72 turboprops.

The rest are a motley collection of Soviet-designed junk, from TU-204s, to a single IL-96, to several An-158s.

If Cuba’s shopping for airplane parts in the US, they’re out of luck, with or without an embargo.

Check it out… there aren’t a lot of vendors in the US that support the  Soloviev PS-90 engines that are hanging on the four TU-204s (nee 757-ski) that are now rotting away on the ramp at Havana. If it’s parts that grounded them, it’s a matter between Cuba and some factory in Russia.

Then there are the stories regarding the recent grounding of Cubana’s  fleet of AN-158s, which for the record is a blatant Soviet-era copy of the BAe-146, except with two engines instead of four, neither of which, apparently, work very well.

In any case, the Cuban feds pulled the plug on these contraptions, claiming they have “design and manufacturing flaws.”

They seemed to leave out anything about the US embargo causing those flaws.

Tough To Get US Aircraft? Yes. But There’s That Little Issue of Lender Risk. Yes, Cubana may have had a bear of a time getting parts – from the factories in Russia and the Ukraine that originally screwed these airplanes together.

Now, the fact is that most new airliners do have a lot of US content, and that can muddy the ability to order a fleet of new A-320s or CSeries, or even a fleet of COMAC C919s from China.  But that does not have anything to do with Cubana operating Soviet-era airplanes that their own government has declared to have design flaws.

Embargo notwithstanding,  the US content apparently didn’t stop the acquisition of seven ATRs, four of which are still in operation at Cubana. Plus, Cubana over the years has wet-leased in fleets of 767s, DC-10s and A-320s – all of which are eons ahead of the stuff they’ve gotten from the fine folks in Russia and the Ukraine.

Furthermore, because Cuba has fully attained a 4th world economy – with a population that’s generally not able to leave the country (let alone have the income to do so) Cubana isn’t a great potential generator of traffic, beyond bargain-rates for EU and Canadian holiday travelers. So, there’s an open question whether it is a viable finance risk.

The point is that Cuba’s economic model, and that of Cubana’s traffic base, probably would make access to Western aircraft financing very difficult… Cubana’s traffic model is as corroded as the rest of the Cuban economy.

Cuba: Years Away From Prime Time. As BGI studies have pointed out, Cuba is potentially an explosive new revenue source for US airlines. But it’s several years and a full government change away.

Four US carriers have given up on this supposedly pent-up opportunity.  It’s a lead-pipe cinch that the remaining US airlines will re-structure some existing flying. Not much traffic to Santa Clara or Santiago.

While a couple of carriers have picked up some the vacated Havana slot capacity, the fact remains that, according to our analyses, most of the traffic is coming from MIA/FLL, and as much as two thirds is Florida-generated – and almost all of that is to Havana.

Plus, the load factors from some US points are really embarrassing.

It all gets back to the core issue… Cuba is a basket case because its own government has chosen to pursue policies that keep what could be a prosperous nation trapped in the economic Crane fixture.

Maybe they can’t get grain from North Dakota, or automobiles from Detroit… but they can get just about anything they want from places other than the US.

The state of its national airline is just one part of this.

And it has zero to do with the US embargo.

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May 14, 2018

BGI Announces Major White Paper

Reconciling Air Service Access Planning

To The New Airline Economic Realities

Mark the date – August 19, 2018

That’s the day that BGI will formally issue a new, comprehensive White Paper on the status of the US air transportation system.

We’ll be cutting new territory and questioning a lot of ambient and obsolete assumptions in the area of air access and airline service.

The White Paper will compare the structural and fundamental changes in the air transportation industry, with the shifts that will be critical in airport and air service access planning.

As will be illuminated in the paper, the nation is a long way from where we need to be. We can plan for the future only by recognizing and accepting it. That’s not the case today.

The fact is that most of the assumptions used in air service planning – from the FAA down to local airports – relate to an airline industry that no longer exists.

Take just a cursory look.

… The FAA still ranks airports in “hub” categories when most have no such relationship to any activities represented by that term.

… The FAA still thinks there is an independent regional airline system, when it’s been gone for two decades.

… The FAA – and most other forecast sources – still believe that enplanements are the direct result of simple econometric factors.

… FAA data collection is out of date, but consistent with the computer power that was available 40 years ago.

… O&D and other metrics represent the past, but not the future. Increasingly, there is a complete disconnect between historic airline planning and what is represented by the new mission applications of airliners delivering discretionary consumer products, in addition to “air service.”

… Too many communities and airports are misled into believing that there are lots of airlines, and just a massive consultant “market study,” and an appearance or two at a couple of speed-date events will do the trick to “luring” more air service.

It’s time to call these things for what they are. Obsolete fantasy that relates little to the air transportation system of the future.

Traditional Air Service Planning – Rig For Depth Charges. Reality Is Coming

The 100-page White Paper – The New Air Service Paradigm – Time For New Thinking – pulls no punches.  It’s been developed based on the need to discard current obsolete thinking regarding how air transportation will shape the future.

Not Just Information, But A Planning Document. The White Paper is a working document that goes beyond data and into functional planning changes that airports, community planners and financial institutions need to consider if they want to match the trajectory of change taking place in the air transportation system.

The White Paper will cover the hot button issues, including:

The New Foundations of Air Service. Today, it’s more than just local “demand.”  The report analyzes the emerging shifts in how airlines are plumbing new revenue sources with their fleets.

Obsolete Government Data & Related Systems – the need for new metrics, and exactly what those need to be.  Relying on FAA forecasts, and the airline industry they describe, has no relationship to today.

Government Programs Aimed At Reversing The Calendar. Let’s get real, EAS and SCASDP programs need replacement. The White Paper discusses new approaches that are necessary.

Regionalization of Air Access. It’s here and it will demand major changes in airport planning.

Internationalization. – It’s an opportunity and a challenge for all US airports.

New Fleets. Next-phase airliners will change and improve access… plan on it. New fleet capabilities represent changes in aircraft missions.

Developing New Planning Programs. The White Paper will outline the specific areas that airports and the regions they serve must address to optimize the future… the air transportation system will be different, and strategic and tactical planning must evolve as well.

Available August 19 & Showcased At A Special Workshop.

The White Paper will be issued on August 19, at the 23rd Boyd Group International Aviation Forecast Summit, in Denver. The price for this comprehensive air transportation White Paper will be $795, and a press synopsis will be available to bona fide media.

Attend The Special IAFS Airport Planning Workshop. However, at the Summit, we’re planning an hour-long pre-event Workshop on August 19, covering the White Paper.  IAFS™ delegates who attend this Workshop will be provided with a complimentary copy.

As always, the media is welcome to attend.

This Workshop is another reason that the IAFS delivers more actionable insight and information than any other aviation event… any other. Click here to register!

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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.

BGI and the team – which includes the former #1 China-US tour generator, the global leader in developing digital programs in China, and the leading expertise in China aviation forecasting – tailor each Symposium to the specific situation at each client.

We illuminate 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. The team can develop complete China outreach programs.

Professional Communication. The Chinese visitors – be they leisure, business, or education-focused – are highly sophisticated. For this reason, it’s unfortunate how many airports, communities and venues get hornswaggled into adding “instant” translation options to their websites.

We always advise against 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.

The BGI/CNH Team assists our clients in development of professionally-developed outreach programs that convey a welcoming image.

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.

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May 7, 2018

Congratulations To Our Partner, St Vincent & The Grenadines!

Boyd Group International is excited to note that American Airlines will initiate service to the world’s newest international airport, Argyle International, from Miami on December 15.

We are proud to have worked with St. Vincent & The Grenadines for the past seven years, from a time when the airport was not much more than an enormous construction site, leveling mountains and filling in valleys.

BGI has assisted the Argyle project in a range of projects, from crafting air access strategies for American and other carriers, to accomplishing the starting-point operating budget for the facility.

This is just the start for this unique Caribbean nation with a population less than that of a third of Nassau County, and a venue that is really unique in the Caribbean.

Boyd Group International is now working hard to build additional air access to St. Vincent & The Grenadines – stand by for film at 11.

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New Forecast:
St. Louis Lambert Now Re-Classified As A Connecting Hubsite

There’s A Message Here Regarding The New Airline Industry

Boyd Group International’s Airports:USA® forecast system – the only airport enplanement projections accomplished in the private sector – now has re-classified STL as an established connecting hub airport.

Airports:USA® defines a connecting hubsite as an airport where a single airline has strategically applied resources with the objective of inter-connecting passengers, and where the result is that 25% or more of the total airport’s enplanements are connect-driven.

With the pull-down of the AA hub, the percentage of passengers being flowed over STL naturally tended to evaporate to very low teens. It was no longer a hubsite.

As of today, however, Southwest has again made the airport a true connecting hub, with over 25% of all passengers (mostly WN-driven) now simply using the facility to connect.

Please Don’t Get Confused By Outdated FAA Classifications. This, obviously, is counter to the ridiculous and obsolete use of the term “hub” in FAA nomenclature. Their description of “small, medium and large” hubs has nothing – zero – to do with anything vaguely resembling connecting passengers, and nothing whatsoever to do with any industry definition of the word “hub.” Actually, it is shameful that FAA data is founded on such ancient nonsense.

This causes unending entertainment from the media and some consumer entities who posture themselves as experts because, lo! they can pull down FAA/DOT data off the internet, and assume it has all the veracity of what Moses got off those tablets on Mount Sinai.

It does the nation no favors for the FAA to cling to these nonsensical, mislabeled descriptions. Not only veneer media types are taken for a ride, but even some of the dragon-level organizations in Washington have their policy-planning taken into the weeds by not recognizing that FAA data and classifications are strictly from the days when Lucy was doing pratfalls on Sunday night television.

One very large Washington organization actually asked us to rank “small” FAA-defined “hubs” by the percentage of connecting passengers at each.

It was a very short list.

Like, none. But there was a level of resentment when they were advised that the FAA definition was misleading them. These were their buddies across town, after all. This is the damage done when federal agencies refuse to recognize that the air transportation system isn’t a static part of the communication network.

If You Rely On Accurate Forecasts, Be In Denver August 19-21. The new STL forecast is part of the 2019-2028 Airports:USA enplanement forecasts that will be used and discussed at the 23rd International Aviation Forecast Summit in Denver, August 19-23. We’ll be exploring the trends – and their effects – on traffic levels at airports across the nation.

Any aviation entity that relies on accurate futurist forecast data should be at the Summit. In addition to clear and independent projections of enplanement trends across the nation, the Summit delivers trend and projection forecasts from the key players in the airline, aircraft manufacturing, and financial sectors.

It’s clear that FAA forecasts aren’t reliable – year after year, they have confidently mis-projected not only traffic growth, but have been mired in assuming that air traffic is just the caboose on a complex train of economic factors.

It’s Airline Strategies That Are What’s Driving Expansion. Ask any airport where Frontier or another ULCC has suddenly and unexpectedly announced they’re coming to town. The FAA’s forecasts were on another planet. That’s understandable – because airlines are now independently and unilaterally making expansion decisions that bear no resemblance to the antediluvian and inaccurate forecast methodology used by the FAA.

And that’s another dynamic that will be explored at the Summit – it’s airlines, internally and unilaterally, that are more and more calling the expansion shots.

Those 60-page consultant “studies” and ridiculous “leakage analyses” – which typically have no relationship whatsoever to consumer trends, airline fleet strategies and other issues – are no longer the driver of airline route expansion.

This means having a professional and ruthless understanding of airline strategies is a lot more important than doing some bogus “true market” study to “lure” an airline to the local airport.

Solid Data & Exploration of The Future. No other event delivers what the IAFS does… no milquetoast panel discussions, wandering aimlessly around issues. No cookie-cutter sessions delivered by wooden federal officials spouting the party line – one that’s the same at every event, and is verbatim from what’s on that department’s website.

The IAFS delivers solid futurist perspectives from the industry leaders making the decisions. Click here and take a look at the distinguished industry CEOs and senior executives who will be joining us.

Networking? No event delivers the interaction opportunities of the International Aviation Forecast Summit. The sessions are all-business, but the breaks and the outstanding evening events planned by our hosts, Denver International Airport, will be ones that no other event can match.

If you haven’t registered, we’d suggest you clear your calendar and do so now.

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April 30, 2018

Starting Point This Week:

Airliner Seat Size Lore:

Be Nice If Some In The Media Relied On Facts

Seat Size: More Media Misinformation… The House version of the FAA reauthorization bill requires the FAA to investigate setting size minimums for airline seats.

USA TODAY, reporting on the story, advises us that this is important because average width of airline seats has declined from 18 inches to just 16.5 inches.

That, not surprisingly, is a blatant falsehood. Untrue, non-factual, sloppy reporting.

Let’s go to the fact sheet, again. The narrowest seats in US airline system operations today (save a couple of small-aircraft air taxi operators) is 17 inches, and all 737s have 17.2 in economy (memo to USA TODAY, they always have been that width in standard 6-across configuration), as well as A-320s and E-170/190s are over 18 inches.

There is no way that seats have shrunk in width to 16.5. Mathematically impossible.

As we’ve seen recently with other airline reporting – such as the 60 Minutes selective-data “investigative report” on Allegiant – what shows up in the media isn’t always gospel.

Caveat consumer.

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Supersonic Air Travel…

It’s coming. And It’s Going To Be Positively Disruptive

China’s largest travel company – Ctrip – has announced that it intends to make a major investment in Boom Supersonic, the developer of a new 50-55 seat, 2.2 Mach airliner.

If you haven’t heard of Ctrip, it’s a $3 billion dollar – and growing – global travel conglomerate based in Shanghai.

They join a range of other global players that have invested in Boom – all of them sophisticated entities that are known for looking to the future. This new machine is expected to cut flight times in half on long-haul intercontinental routes, and do so at operating costs that will accommodate today’s range of business/first fare levels.

Not Just Faster, But A New Air Transportation Mode. Boyd Group International has completed fleet demand forecasts for Boom Supersonic, and we see not only “demand” but major disruption in airline product structure.

Very disruptive – to just about every segment of air transportation – airlines, airports, suppliers, financial institutions and – importantly – to consumers who will have a whole new travel/communication channel.

On one hand, it will offer a superior option to the existing business/first passenger segment, with travel time being far superior. On the other hand, in markets such as New York – London a 3.3. hour flight time will likely represent stimulation of demand.

Then, let’s think about effects on global airports and competitiveness of airports. Those that may be slot-restricted might be left at a disadvantage – meaning that some sectors of consumer travel will find alternative access points where airlines operate the Boom airliner.

Opening China. Then we have emerging markets such as China… there is no guarantee that the Middle Kingdom will have restrictions on the (low) sonic boom. That means enormous potential for both domestic and international supersonic service to and from interior commercial points such as Chengdu, Kunming, Zhengzhou – at a dozen other new-market opportunities. Point: lots of potential demand for this airliner.

Example: Florida-Latin America: the attractiveness of this aircraft could well deliver nonstops to key commercial points in South America… remember, this new modality focuses on high-yield business traffic. The businessman from Manaus needing to get to Central or Northern Florida could now have viable service to/from Sarasota or Jacksonville… avoiding the congestion at other gateways.

Not Just An Airliner. A Competitive Imperative. The 50-55 seat airplane, aimed at capturing and moving today’s premium first/business segment at 2.2 Mach, at fare levels similar to those currently offered, will effectively be a giant marketing hacksaw, slicing off the front cabins of current intercontinental airliners.

If a business traveler can get from New York to London (as just one of many example markets) in 3.3 hours compared to 6.5, at a similar fare, it’s a no brainer which mode he or she will choose.

But it appears that much of the inbred aviation cognoscenti fit into that category. For now, the dogma is decided… this airliner won’t work.

But give it 12 months, and the dogma will do a 180. It always does, when things get obvious.

A Competitive Necessity. BGI is the only consulting firm that has researched the Boom concept – and from the gitgo, we found that the concept has enormous merit. Globally, our forecast is for 1,300 units over the period from operational start (2024) through the following ten year period.

‘Course, the usual mamma-guy analysts (google it, if you must) have assured us from the start that the Boom concept was a pipedream – mostly based on their recollection of the Concorde, which came out before half of today’s world population were born.

Comfortable group-think lore… the usual suspects have circled the wagons.

“No cost-efficient or fuel-efficient engines exist…,” some have assured us, completely oblivious of any expertise on the subject, beyond what “everybody knows.” They do exist.

“It’s the noise issue,” was another warning, not aware that the projected sonic boom will approximate that of a car door shutting, and way below the racket made by trash trucks rumbling down Madison Avenue at 5AM, or that of a 737 on approach over Jackson Heights into LGA.

(This is not to imply that the US FAA will ever have the gumption to explore over-land use of any supersonic airliner – regardless of what the decibel levels might be, the political response would be quick, ugly and aggressive. It’s a battle they won’t take on. But the trans-ocean route opportunities are more than can gobble up 1,300 global airliners.)

Save Time? Be More Efficient? Nonsense! Customers Want Perks, Not Speed. Then there is the all-time most creative “reason” espoused by some of the all-knowing analysts to prove that the supersonic business class concept won’t work.

The argument: premium passengers want to stay in the sky longer.

They contend that the 55-seat Boom airliner, equipped only with wide, individualized recliner seats and footrests, will not be able to take long-haul premium traffic from existing-generation widebody alternatives, because it will get them to the destination too fast.

According to this argument, this premium business segment will prefer  longer flight times – to get work done, and to rest up and be fresh when they arrive. (To repeat, we are not making this up – these comments have been made with straight faces…)

See, the fantasy goes, premium class passengers will prefer the option of luxuriating in the sky for several extra hours, enjoying premium cocktails, wolfing down fine wine, dining on gourmet meals, enjoying a lavish dessert accompanied by a snifter of Courvoisier, before spreading out on a lie-flat seat to enjoy first-rate in-flight entertainment (IFE) on a giant flat TV, all warm and comfy under a lush duvet adorned by the name of some fancy designer.

Sure, getting to London hours earlier, and not having the time to wallow in luxury on the way to Heathrow will be a real deal-killer for Boom.

Funny, but there are certainly  a lot of aggressive corporate executives who would rather get ahead of the competition, instead of swilling wine and playing with a 14-way lie-flat seat for seven hours.

The Current Business/First Competition Will Be Decimated. By the way, anybody who believes in this more-time-in-the-sky stuff, probably hasn’t really seen the long-haul front-cabin service shtick that some carriers pass off as “premium.” (We won’t mention carrier nationalities… but take a guess.)

Take a look… from boarding to deplaning, it’s not necessarily what’s portrayed in the advertising…

…the four-color menus passed out before departure showcase a lush level of high-livin’ vittles…  but actual delivery sometimes falls a bit short…

Like, “premium cocktails” made with hooch barely a step above what’s in the bar-well at a roadside honky-tonk. Oops, that fine vintage wine selection that’s touted on the menu might not be on today’s flight. “But we do have some other options that are substantially better than Mad-Dog 20/20…” The gourmet entrée is likely to be plunked down on a pre-packaged plate or casserole dish, a la coach meals in the 1970s.

Oh, yeah, that plush duvet. When the passenger stretches out to relax, that duvet has no more utility than a blanket, embroidered designer name notwithstanding. And the viewing enjoyment available on the IFE system might resemble titles obtained in the last stages of a bankruptcy clearance at Blockbuster.

Point: The fare-paying segment that’s sitting in the front cabin today wants to get there. When the fare is the same, they’ll get on the fastest piece of warm iron leaving town. That is going to leave a lot of front-end wide-body real estate empty and seeking some type of re-development. Major international carriers would do well to start exploring this now.

Get Ready – The Airliner Demand Game Is Fixin’ To Change. The point is that this Boom Technologies airliner is going to change how airlines market their product, and how premium-segment customers fly.

It will also materially change fleet decisions and fleet applications for global international carriers. It is going to get sudden attention from other airframe manufacturers. (And once it’s safe to do so, it will get swooning attention from the oh-so-negative aviation analyst crowd, too.)

And don’t discount more Chinese interest. The one industry where they are materially behind the curve is in airliners. Their current and planned platforms (such as the C919, C929 and ARJ-21) are a decade late and several yuan short. A relationship with a product that Boeing and Airbus can’t duplicate would give Chinese aircraft companies and aviation suppliers a lot more access to airline front offices.

This means that as more major aviation and travel-related companies get acquainted with what this airliner will do, there’s going to the plenty more disruption.

Want To Get A View Of The New Future? Join Us In Denver this August for the 23rd Boyd Group International Aviation Forecast Summit, and get up close and personal with this next dimension in air transportation.

Not only will Boom be participating in the Summit, but we are jointly planning an exciting event to introduce this new airliner to the attendees… details coming soon.

In the meantime, if you haven’t registered for the 2018 IAFS™ – click here to reserve your space now.

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April 23, 2018

Fourth Quarter 2017 Fare & Enplanement Data…

Let The Media Circus Begin

The DOT has finally issued O&D traffic data for the last quarter of 2017.

Subscribers to Aviation DataMiner™ now have full access, and subscribers to the Quarterly Airport Performance Summaries will be receiving their copies in the next few days.

Just Because It’s From The Gov’ment Doesn’t Mean It’s Accurate. BGI’s Aviation DataMiner™ system has scanned and filtered the numbers to cull out the typical reporting errors, and we’ve reconciled the raw data against other sources, including airport-reported information.

The 10% sampling system still used by the DOT delivers a lot of misleading data – particularly at smaller airports and in less-dense O&D markets.

Just in passing – a GAO report noted that the 10% sample was originally necessary due to the fact that in ancient times – the 1960s & 1970s – computer power was a fraction of what was currently available. They recommended that the DOT go to a 100% audit of airline itineraries.

That report is now old enough to vote – it was issued in 1997. And here we still are. It’s the reason the Boyd Group International’s Aviation DataMiner™ is more accurate than any other source. We recognize that a 10% sample can send a lot planning into the weeds.

Now, let’s take a look at the 4Q of 2017…

First, regardless of the panting “reports” declaring  airport had the “highest fares” or had the biggest spike or decline, here’s some rain on the media parade….

There is no accurate way of comparing fares between airports.

Write that down… comparing fare levels – by almost any metric – between airports or between markets, is just plain inaccurate and, in many cases, indicative of amateur-act analyses.

Fares: The Drivers Are Different From Airport To Airport. In fact, the fares at each airport are the result of .factors that vary materially, based on the economic base, the geographic location of the airport, the levels of service, population, and other issues. The metrics are not consistent.

This is because the factors that contribute to what passengers pay vary materially from airport to airport.

For the 4Q 2017, we took airports with over 1 million quarterly enplanements, and ranked the top 15 by local O&D domestic passengers…

The fare trap that a lot of reporters, amateur consultants and analysts fall into is demonstrated very easily by comparing #1 LAX to #2 Denver.

Denver, to the uninformed, has much lower fares than does LAX. But take a look at what passengers are paying on a per mile basis… Denver has an average yield that’s nearly 18% higher than LAX. Reason? Take a gander at the length of haul. The consumer travel patterns represent a length of passenger trip at LAX that’s about 30% more than at Denver.

Therefore, comparisons of these fares are useless… because the travel mix is completely different.

Passenger Travel Mix Is Not Comparable. Below we look at 15 airports that had the “highest fares” in the 4Q of 2017…

Take a look… the average fare (here expressed as one-way, federal fees and taxes included) is clearly driven by the average length of passenger trip (LOH)… i.e., the geographic location is a factor that is not equal or comparable by airport.

Okay, how about what consumers are paying for air travel on a per-mile basis… we took the same airports (those over 1M quarterly passengers) and compared the cost per mile of the top 15…

The cost per mile is high in most of these markets because the nature of the traffic tends to be shorter haul… and, note too, that these markets are served also by Southwest, which according to media lore, always drives fares down.

They can, but even at STL, which is again now classified by Airports:USA® as a (Southwest) connecting hub, is the airport with the fifth highest per-mile fares.

Reason: the make up of the traffic results in relatively short consumer trips… hence, higher per-mile fares.

BTS “Fare” Data Reports – Approach With Caution.  A lot of media stories will come out, spouting the BTS “fare rankings.” Actually these are “air travel spend” ratings. They take the total passenger itineraries, and divide the total spend – including one-ways, multi-leg journeys, and round trip – and produce an “average.”

But just as consumer air travel patterns vary from airport to airport, so, too does things like the percentage of round trips in a market, or the percentage of multi-leg itineraries. Result… these are not accurate comparisons of “fares” between airport, because what consumers are “buying” will vary from city to city.

Want Better Analytical Firepower? The New Standard Is Aviation DataMiner™. What separates BGI from the rest of the suppliers of data is that we understand not only the shortfalls in raw BTS information, but we also are at the cutting edge of research on the trends that drive changes in air transportation.

Before you subscribe to any other source, check out Aviation DataMiner™ by clicking here… better analytics from Boyd Group International.

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Air Safety… Another Viewpoint

With all the media coverage of several areas of air safety, we came across a very interesting blog.

It’s a take on the recent 60 Minutes story on Allegiant Air, and it’s from a stand-up professional who is a source that doesn’t have a dog in the fight.

He reviews hard data, devoid of emotion and sensationalism. Fresh air.

In the interests of gaining additional perspectives, click here to give it a read.

It has several data-sourced conclusions that widen the discussion beyond mere repetition of what was originally presented in the 60 Minutes program.

Take a look – it presents a new set of analyses that that need to be brought into the discussion.

By the way, every airport director where Allegiant provides service should read the FAA’s response to the 60 Minutes attack on Allegiant.

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April 16, 2018

2019 – 2028 Airport Traffic Forecast:

Everything’s Unhinged

Big changes. Bigger uncertainties.

Here are some basic findings for next year, from the Boyd Group International 2019-2028 Airports:USA™ enplanement forecasts. It’s the only such data source compiled entirely independently in the private sector.

Traffic: up 4.5% – 5.0%
Among The Top Growth, Percentage-Wise: AUS, COS, SJC, RDU, SRQ.
Changes of Note: STL regains connecting hub status. (True)
Main Forecast Characteristic: Massive Volatility – plan on several airports seeing rapid and unforeseen double-digit spikes and declines. In fact, currently-indicated growth centers could disappear by August 21st, when the final 2019-2028 forecast is issued.
The #1 forecast finding, however, is what BGI has outlined for the last ten years: traditional forecast methodologies are today about as effective as a warped Ouija board.

Future Factor: The Value-Equation of Air Transportation Is Evolving. This is a major challenge for airport and regional economic planners… air transportation is no longer a utility… it’s increasingly a consumer option, and volume is more and more the result of where airlines make the corporate decision to increase – or reduce – capacity.

Business travel is today affected by changes in other communication channels. The ability to meet and do transactions electronically is rendering air transportation as too slow and too cumbersome and too expensive in many cases. This is one reason that a lot of attempts at tossing scheduled flights into small community airports are DOA. They don’t truly represent time-effective communication options.

Leisure travel is being spiked and stimulated in specific O&D markets via application of ultra-low fares. That new kitchen remodel can get put off a year, with the family budget shifted to an unplanned air trip to visit Florida, or even grandma in Philadelphia, due to the sudden presence of low fares.

Airline Expansion & Contraction: Strategically-Driven. Historically, national and even local air traffic forecasting was mostly a matter of doing some regression analyses based on a couple of economic metrics, and, poof! – all was well.

The assumption was – and, at the FAA, still is – that air travel demand was simply a static component of the economy. The “spend” on air travel was assumed to be concretely and linearly driven by economic factors.

It isn’t – at least not anymore.

The ULCC Product – Changing The Traditional Nature of Air Travel Volume. As we’ve seen with the expansion of ULCCs – Allegiant, Spirit and Frontier – the places where they suddenly expand capacity has nearly zero to do with static econometric data.

And often, little to do with whatever the current levels of service may be. For example, Spirit’s new Seattle expansion is right in the face of two legacy carriers, both doing quite well. There is not any capacity shortfall at SEA – particularly on the routes planned by NK.

This illuminates the new dynamic that puts a spread of torpedoes directly into the rusted hull of traditional traffic forecast methodologies.  It’s the fact that the expansion of these carriers isn’t to fill “air service gaps” or address “unmet” consumer demand.

Instead, it’s all about offering a new option for consumer spending… in short, most of the ULCC expansion is all about creating net-new revenue, instead of fighting for “market share.”

Air travel is now a consumer option, and consumer decisions are wildly volatile. Even the definition of “demand” is increasingly a mathematical greased pig – it’s now the result of a whole range of constantly shifting factors that are specific to each market.

But at the end of the day, it’s whether there’s capacity for sale, and it’s revenue generation – not just high load factors – that determines whether a ULCC continues to operate a route, or cuts bait and moves on.

The challenge is forecasting where this type of growth will take place – it can’t be done with any traditional mathematical model.

That’s because the decisions are based on subjective corporate strategies on the part of these ULCCs in regard to where they can get the highest and best use of aircraft.

There is no model that would have predicted Spirit’s expansion at Seattle. Or Frontier’s new capacity at Colorado Springs or San Jose. Or Frontier expansion at RDU.

As we illuminated last week, the entire concept of relying on historical DOT data is useless as a planning tool in this new air transportation environment.

Strictly Business. Nothing Personal. Because the objective is to offer an alternative spending option, the ULCC model is transient. If a given market doesn’t work sufficiently – or if another appears to be able to generate more revenue – the ULCC responds rapidly to shift resources. Read: pull out of town, and fast.

And when they do, most of the traffic they generated evaporates.

In fact, we’ve seen this clearly in the past. When Southwest opted to delete SRQ from the AirTran system subsequent to their merger, virtually all of the more than 300,000 annual passengers disappeared. They didn’t show up at Tampa or at Orlando or at Fort Myers… they were gone with the capacity. Same with the situation at Newport News – neither Richmond nor Norfolk got a tsunami of new passengers. It was simply gone.

It’s been in play for the past 18 months. ULCC markets with what would appear to have high load factors are suddenly dropped – because it’s now revenue-factors that count. We’ve even seen newly-announced markets dropped before they were ever started.

New Close-In Forecast Methodologies. The bottom line is that traditional approaches to forecasting are out. The future is based on determining where there’s potential for air travel to be a new discretionary spend product.

Join Us At The IAFS™ To Explore This New Future. On August 19-21, at the International Aviation Forecast Summit in Denver, this new air transportation future will be front and center in our discussions with airline and aviation industry CEOs and executives.

In addition, the Airports:USA® session on August 21 will be covering the new range of core trends that will change how airlines apply their resources, and the factors to consider in regard to making logical projections within an entirely new and evolving airline industry.

Airports: Bring Your Board Members… and maybe the mayor, too. This event delivers data, forecasts and perspectives that will give them a clear perspective of the future. Judging by a lot of the semi-ethical “ASD” schemes being peddled to unwary small communities, this event will assist in keeping civic leaders from being misled into the planning weeds.

Click here for more information and to register. We look forward to seeing you in Denver!

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April 9, 2018

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’re the equivalent of a giant vacuum tube in a digital 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 compared to alternative options that 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 new 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. Whether the traffic will develop will depend on a lot of factors, but one thing is certain – past consumer trends are not indicative of the future.

Travel Decisions May Adjust To Superior Elapsed-Time Schedules. Let’s take the BNA-SYR market. There could be a lot of latent 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.

One 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.

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And, Finally…

Annual Rite – The Annual Airline “Quality” Reports

Spring.

It’s when birds and bees get social. Flowers pop up out of formerly frozen ground. College students head to Daytona for all manner of on-beach rituals.

And, of course, we have the usual suspects in the media doing literary back-flips reporting on the latest airline “quality” reports.  No questions are ever asked about source data or the actual “quality” of the conclusions.

It comes from academia, don’t ya’ know.

Again, plan for some in the media to inaccurately and sloppily refer this stuff as a new “survey” – when it’s really just rejiggering DOT data – which any high school kid can access. Just put it through some type of mathematical formula, and, voila! we have a report. One that is postured to be strong research.

Not A Clue Regarding The Airline Industry Structure. Not much here, especially from a “quality” report that doesn’t know the difference between a “certificated operator” and an “airline.”  Point: it’s not of much value to consumers.

For example, regurgitating federal data regarding “bumping” rates on operators such as ExpressJet or SkyWest  – which mainly lease planes and crews to various major brand airline systems and which have little or no control over booking rates – is just ill-informed.

Which is where these tomes leave the consumer.

But, again, it’s spring.

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April 2, 2018

The New Realities of Small Community Air Access

Shock. Outrage. Denunciations.

That’s pretty much a description of civic leaders at communities where the local airport is now devoid of scheduled flights, due to the shutdown of Great Lakes Airlines.

They resemble Captain Louis Renault’s famous line in Casablanca. They are shocked!

Shocked to find local air service was headed into goodbye gear. They should have seen this coming, and they did nothing to deal with what caused Great Lakes to go under.

We’re talking about the Sacred Scripture. The Dogma of Truth, a.k.a., the 1,500-hour requirement for entry to the commercial pilot profession. It is the direct result (or more accurately, reaction) to the crash of Continental Express flight 3407 in 2009.

Nails In Already-Inevitable Air Service Coffins. This pilot-experience requirement is the direct and proximate cause of places like Prescott and Cheyenne now finding themselves with no scheduled passenger flights at the local airport, and even less chance of a major airline brand coming to town.

It’s also a reason that local airports at places like Naples, Topeka, Youngstown, and others may as well howl at the moon (instead of tossing money on more “studies”) in regard to attracting viable, long-term connective air service from a major airline system at the local airport.

One main reason is that local consumers at these cities already have far better air access options than what can be supported at the local airport. So not having flights at the local gates isn’t the major economic hit that civic leaders think it is.

The hard fact is that for airports such as these, the “pilot shortage” has only accelerated the inevitable, and put an earlier nail in the local air service coffin.

So, let’s call it for what it is. It’s not a shortage.

It’s the new economics of air transportation. It’s the new structure of air transportation in the US. Regionalization of air access was already an emerging dynamic – and now “regionalization” of pilot resources has accelerated this process.

A Rule With No Positive Benefits. The sad fact is that the 1,500 hour requirement is worshipped and aggressively-protected, regardless of the truth that were it in effect when the flight 3407 accident occurred, it would not have made any difference whatsoever to the outcome of that tragic night.

Both of the pilots of that aircraft had more than 1,500 hours, and this now-in-sacred-stone requirement in itself addresses none of the core findings of the NTSB report on flight 3407.

Regardless, the 1,500 hour requirement has become a third rail nobody dares touch, apparently. No other alternatives are to be discussed. Those that even suggest such things are burned at the stake of public opinion – they are the anti-safety, money-grubbing running dogs of greedy airlines.

Don’t Dare Criticize The Scripture. So, this is the situation, and the air transportation system will adjust. And constrict. It seems nobody wants to stand front and center and call for exploration of viable alternatives.

The now oh-so-outraged civic leaders decrying the demise of GLA should have seen this coming. Instead, they sat on their hands, not offering to help support exploration of alternatives to the 1,500 hour rule.
Most politicians avoid discussing it. One nudnik congresswoman actually stated that because there have been no fatal accidents since the rule was implemented, it proves it has increased safety.
Even a recent “task force” set up by the DOT to explore “solutions” to small community air service failed to take the 1,500 rule on. Instead, there were several pages that wallowed around suggesting other methods of meeting the rule, but not much along the lines of clearly stating that it needed to be completely reconsidered.
Constriction of Viable Air Service Demand. Loss of scheduled flights at points with almost no passengers isn’t a huge hit.

More damaging, however, is the reduced ability of major airline systems to access hub flows from midsize “small” airports, directly because they do not have sufficient pilot resources.

At extreme risk are airports with roughly 500,000 to one million enplanements. They have viable traffic, but their economies are threatened by the inability of major airline systems to adequately access this revenue due to limited pilot resources. This is a threat that local civic leaders can ignore at their peril.

Let’s state it. The 1,500 hour rule has not in itself increased air safety. But it is doing a great job of constricting economic growth and global access across the US.

There are better ways to be explored. But the discussions of such are simply not tolerated.

That’s the situation.

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March 26, 2018

China-US Tariff & Trade Issues…

Effects On Boeing & China-US Travel: Minimal

The Wall Street Chicken-Littles Are Very Ill-Informed

With a supposed trade war coming with China, Boeing’s in line for some tough times.

At least that’s what we are told.

The financial-sector gurus are out in full force, many predicting dire outcomes for China-US aviation as a result of the imposition of tariffs on certain goods from China.

We’re pretty much assured, according to the implications of some of the reporting, that the US consumer and the US economy are going to take it in the keester, because China will retaliate.

Already we’ve seen dire stories coming from other sectors of the economy… supposedly.

One financial media source recounted in an editorial how one small manufacturer has had to lay off staff due to the increase in steel prices, even though they supposedly were using US-made metal.

The bottom line was that, because underpriced Chinese steel was going away, US sources no longer had that price-pressure. Meaning, they didn’t have the market imperative to respond to unfair import competition.

But that wasn’t the take in the article… which curiously recounted something that supposedly took place within days of the announcement – not the actual implementation – of the tariffs on cheap Chinese steel. But the story was positioned as sort of the harbinger of things to come.

China & Boeing: This Isn’t Econ 101. It’s Global Inter-Dependence 401. Unfortunately, there’s a lot more to this than what’s coming from many of the Wall Street shamans, some of whom probably couldn’t tell “China” from a gift-set of Melmac.

The fodder of choice, it seems, tends to be dire warnings of this economic conflict hammering Boeing, and in the process zapping the entire supply chain, sending US workers to the unemployment line.

The Chinese, according to some of the supposed experts, can just switch to Airbus and leave Boeing bone-dry in the exploding China aviation market. Any look at production rates at Airbus would embarrass the folks putting this stuff out.

Or – watch the newswires, this one’s coming – the warning that China could just rely on buying indigenous airliners such as the C-919, oblivious of the fact that this machine won’t be market-ready for at least three years.

Indeed, these prognostications have reportedly caused Boeing stock to drop by over 5%, regardless of the fact that most of these stories are not based on hard market analyses… just Econ 101 assumptions.

Industry Expertise Not Needed. One financial media source last week actually warned that China has an immediate replacement for their orders for Boeing airliners. See, there are over 900 airliners coming off lease in the future, the story confidently reported, and then told the readers that China could simply “swoop in” and take those units in the place of buying new Boeing products.

Sure. Just pick’em up right off the desert showroom. No need to consider age, condition, engine configuration, airframe and component time, pending maintenance bulletins and a.d’s, maintenance bridging, compatibility with existing fleets, etc. Nor the fact that historically, China has not bought used aircraft.

But, such considerations are not important – nor is industry knowledge – when the goal is to fill several column inches.

It’s this type of veneer reporting that causes runs on stock prices… and misleads the public.

It’s not “fake news” – that’s when somebody actually knows the facts and reports something dishonestly different. This, however is simply irresponsible and amateur opinions represented as expertise.

Some Facts Not In Evidence. What a lot of this reporting doesn’t understand is that Boeing aircraft are global in scope. Parts, components and technology of their products come from all over the planet. While China is not a major direct sub-contractor for, say, the 787, Boeing does have a finishing center in China, and components for its aircraft coming out of the factory in Renton are certainly sourced in China by sub-contractors.

Another point: China is in need of lift. BGI’s Airports:China™ forecasts illuminate the fact that the domestic Chinese airline system is nowhere near reaching its stride in regard to meeting current demand.

The China market is such that there is no true US-style hub-and-spoke system, which takes passengers from several points and aggregates them on other flights. While on paper, it appears that there are plenty of options for connections at some airports, a closer review shows that today, the vast majority of traffic is between cities.

Aggregation between Mianyang  and Kunming isn’t needed. Just capacity. The vast demand between large commercial centers is a long way from being met… which means that China cannot economically afford to cut Boeing off… they need the lift.

It’s Boeing Or Loss of Economic Growth. Underscoring this, last week – amid all the dire shallow-fact stories warning about Boeing’s “problem,” China Southern confirmed orders for 30 more 737s, and Xiamen Airlines did the same for an equal number of units.

It’s unfortunate that so many of the folks in the financial media are simply not versed in the dynamics of the Chinese air transportation system. They just assume that the orders for new jets can be turned off and on.

Point Made: The two airlines noted above need the lift that these Boeings will deliver… and they do not have easy alternatives. They could cancel the order, but that would self-inflict huge economic damage to a nation that needs this capacity – as soon as possible.

Conclusion: The last thing China can afford is choking off Boeing. Airbus can’t fill the gap – not to mention for several Chinese Boeing operators, that would mean introduction of an entirely new sub-fleet, which is not an easy thing to do.

China & US – Partners. It’s Not Two Separate Markets, Anymore. Plan on this: The emerging Kabuki Theater between the US and China is not one where China holds all or even most of the cards. They are a producer nation – with @18% of their exports coming to the US. That’s a chunk of business they cannot do without.

Plus, some of the tit-for-tat tariffs proposed by China don’t make much sense within the inter-connected global economy. One example is the Chinese threat to put a tariff on pork from the US.

Oops, two little problems… pork is a major food item in China, and the supplies from the US are critical to that supply. Not to split hairs, but it’s China importing pork from the US, because it’s a needed food staple. So, it’s Chinese consumers who get zapped at the dinner table.

The second leeetle problem is that much of the US pork industry is now owned by, yes, Chinese companies. So, they get the short end, too.

Okay, What About China-US Passenger Traffic? We’ve seen where political disagreements have resulted in dictums from the Chinese government that have decimated the strong tourist traffic between China and Korea. And China and Taiwan.

This certainly could be an option in regard to retaliation for the US tariff program.

But, it’s not likely. First, the current channels of capacity between China and the US are essentially choked due to a variety of factors – one being lack of nonstops from interior Chinese cities, and another being the non-existence of a true hub-and spoke system that could develop more nonstops.

BGI Airports:China™ forecasts indicate that outside of Beijing, Shanghai and Guangzhou, the rest of China is generating less than 10% of the demand that can be expected with increased capacity channels. Regardless of actions to blunt Chinese from visiting the US, the demand is such that it would not likely be noticed.

Furthermore, the China-US relationship has progressed well beyond the simple tourist-group stage, which is the case with Chinese traffic to places like Korea, Taiwan and Thailand.

Between business travel and the demand generated by the @400,000 Chinese students in the US, passenger movements between the two nations is much more solid and fundamental that just folks wanting to take a vacation. It’s far from being just discretionary travel.

Don’t Buy Into The Financial Chicken-Littles. Boeing Needs China. But China Needs Boeing. China respects strength. The US is finally addressing imbalances in the trade relationship – which the Chinese government will rail about, but which internally they understand.

So, regardless of all the me-too stories about Boeing being in line for huge damage due to the US tariff moves, the hard underlying fundamentals show that this is one area that China will be very reticent to mess with.

Regardless of what the “experts” on Wall Street are telling us.

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March 19, 2018

Before We Start…

New Programs For Future-Focused Airports & Communities…

Boyd Group International and its China partners are now offering programs to assist airports and communities in attracting more of the burgeoning Chinese investment in the USA, as well as the 23 million Chinese leisure travelers coming here in the next five years.

As an example, we recently delivered a China air service and business symposium for industry leaders in North Carolina.

Sponsored by the forward-thinkers at Raleigh-Durham International Airport, the program presentation is available by clicking here… it gives perspective on not only the issue of new China air service to the US, but also the industry-leading research of BGI in regard to China aviation. No other consulting firm has be depth in this area as does BGI, including our Airports:China forecasts.

If your airport and community are interested in exploring the China opportunity, and gaining industry-leading expertise on how to optimize it, click on the China button above, or send us an e-mail to discuss your objectives.

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Air Traffic Control.  “Reform” Is Dead.

Actually, Reform Never Was On The Table

Based on what’s recently come out of the fog in Washington, US Air Traffic Control (ATC) “privatization” – which is mischaracterized and mislabeled as “reform” – is off the table.

That means it will be business as usual in regard to the Next-Gen naked emperor.

No changes, no accountability for failure or for implying that project failures are really successes.

Billions Spent… And Project Goals Slipping Into The Future. Yes, business as usual. The same ATC system that – even now with all those iconic vacuum tubes and old equipment already replaced – can’t handle current or future air transportation volume – will wallow on.

Any “improvements” in airline on-schedule reliability will depend on airlines continuing to shift schedules to allow more published sector time, and more turn time on the ground. An expensive concession to an ATC NextGen upgrade system that’s the poster-child of federal incompetence.

Note The Skies Are Not More Crowded. Do keep in mind that today there are 12% fewer airline flights in the sky than in 2007… that alone should have spiked “on-time” performance. It hasn’t.

Point: anyone awake, sober and with more than a grammar-school education can see that what’s gone on in the FAA in regard to ATC over the last 20  years has been a string of missed deadlines and pompous FAA Administrators getting away with it by telling swooning groupie-like network correspondents of how “successful” NextGen is.

Again, if NextGen were a private-industry program, funded by stock offerings, the leaders of this mess would be wearing orange jump suits.  NextGen is a fraud.

Sorry if this offends all the cognoscenti in the industry who line up behind NextGen like the rhythm guitar section of a third-string country band, but the truth and the facts are that the FAA’s performance in regard to ATC has been shameful and a failure.

When “Reform” Is Really Just More Expensive Status-Quo. But the truth is that the folks who called for “reform” actually were suggesting nothing of the kind.

They, too, were intent on keeping the status-quo, at least in regard to accountability and dimbulb management. Other than governance, there’s been nothing else mentioned. In fact, it’s obvious that the “reform” supporters also support the management system that’s responsible for years of missed deadlines and bungled programs.

“Reform” only meant shifting the ATC system to a privatized structure, governed by a board that would come from across the aviation spectrum. That, according to the lore, would make the ATC system run smoother – and run by the same incompetent management and the same misdirected programs that have hamstringed progress for the last two to three decades.

Funny, but this same industry “spectrum” of entities that would be directing a “reformed” ATC has a group have never – never ever – dared aggressively and openly called for any functional and complete reform of the ATC system.

Never.

They, apparently have been quite satisfied with the non-performance of the FAA, and seem to imply that just “privatizing” the program will lead to consistent funding and smooth skies ahead. The dogma is that it’s only been a lack of money that has held the ATC system back.

That contention is bogus. Wrong. Misleading. Not accurate.

Most of the GAO and DOT IG reports on NextGen have pointed to far more fundamental issues. Like, lack of clear objectives. Like, lack of strong direction and management. Like, NextGen not at all being “transformational.”

Take a gander, nobody on either side of this embarrassing Kabuki Theater has ever come out and called for any “reform” in regard to decades of missed deadlines and bogus goals.

None were, and none are, being planned.

The Anti-Reform Segment Wasn’t Focused On Demanding Results, Either. But as far as any fundamental changes, it makes no difference.

Remember, most of the entities that were against this “reform” only focused on the supposed disaster for rural communities if greedy airlines got their paws on the ATC tiller. Regardless of whether that fear was valid or not, the fact remains that the amen-corner for status-quo has been silent in demanding that the creaky management directing NextGen be advised to find a new set of careers.

Truth be known, “reform” – as curiously defined in this matter – is dead. As defined in the real world we all live in, it never was a proposal.

Both sides really wanted the same outcome… keeping the functional status quo, and shielding the FAA from any accountability for NextGen failures.

Move on, everybody, nothing to see here.

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March 12, 2018

Definition: Unhinged

uhn-hinjd

Unstable, off-balance, uncertain, disconnected from past options,
Disoriented, confused regarding situational changes
Also see: Aviation Future Planning

Today, with all the emerging and fundamental shifts in the industry, it’s a fact… traditional planning approaches are, by definition, coming unhinged – i.e., disconnected from the emerging aviation industry.

Many of the traditional approaches and planning options have little or no bearing on the new emerging dynamics that are engulfing the industry. They are galaxies away from what’s unfolding in aviation.

Join Aviation Leaders At the IAFS™ And Get Whole New Perspectives.  On August 19-21, the decision-makers in the industry will be candidly exploring the new structures of aviation… big changes in the works.

Let’s take a look at just a couple of areas…

US Air Transportation System & Structure – one major change is the Parallel Airline Universe – a.k.a. ULCCs (Allegiant, Frontier, Spirit, Sun Country) – they’re expanding with marketing models that are completely contrary to what were in place three years ago.

Running periodic but high-density flights between places like Nashville and Richmond, or Philadelphia-Grand Rapids or Memphis-Oakland, with price intended to trump frequency, is an approach not seen before.

Face it, the competitive issues this represents to the four major network incumbents are, yes, uncertain and  disconnected from past options. Unhinged from past experience.

And just offering another bare-bones-you-board-last-and-don’t-get-overhead-space fare bucket isn’t likely going to be a meaningful competitive response.

By the end of 2018, the Airports:USA™ forecast from Boyd Group International indicates that ULCC capacity will be in excess of eight per cent of the US total – a very disruptive factor… one that unhinges traditional competitive options and unhinges the traditional definition of “air travel” from meeting a need, to providing a consumer spending option.

The problem is, the two different models are on a collision course.

Traditional competitive responses are not going to be effective. Pulling otherwise-expected service features to implement another low-fare bucket is problematic. Adding an optional fee to get into a “priority boarding” line that starts to build an hour before departure, and can stretch 80 or more people down the hall, isn’t necessarily a strong response, either.

In regard to competitive responses to the Parallel Airline Universe, most of what’s in the traditional book of service options is out of date. Unhinged as solutions to the current challenges.

Small Community Air Access. Take a look around. Let’s tell this just like it is.

Nowhere is traditional aviation planning more “unhinged” from today’s realities.

There are probably dozens of small communities trying to restore or add to “air service” at the local airport, when the new economic structure of the airline industry – and consumer preferences – now make a lot of these efforts akin to latter-day cargo cults. (Google it if you need.)

But even though the realities – and the emerging structure of the air transportation industry – are crystal clear, many communities are still squandering money on “market studies” and “drive analyses” and “task forces” to “find more airlines” when, like in the case of South Pacific cargo cults – nothing’s coming.

In the context of the emerging air transportation system, and its role as part of the communication system, a lot of these efforts – some quite costly – are the equivalent of voodoo.

In short, the approaches to assuring access from the rest of the global economy can no longer focus on just having flights at the local airport.

The traditional methodologies of just collecting lots of data – much of which are often nonsensical assumptions – will not create a connective airline industry that no longer exists. Building a stick model of an airplane and putting at the end of the runway will be just as effective.

Save The Tuition. Another  giant waste of money is sending staff to attend generalized “training classes” that purport to represent that “air service development” is just a matter of doing the right data, and airlines will come a-running. Today, there is no drive-up window for air service, and just doing all the “right” analyses won’t bring them to town. The structure of the US air transportation industry is no mystery.  Jive training that covers lots of past hypotheticals that have zero relationship with the US system is useless.

Point: traditional “ASD” approaches like this are on another planet from the future, instead, they are unstable, and functionally disoriented… i.e., unhnged from the new realities.

Fleets & Fleet Applications. Standby for huge disruption here. The traditional service models and applications of long-haul international air service are in for a total revision.

First, the days of the small “regional” jets are still limited. Changes in fuel costs and a near-boom in US travel demand have slowed retirements. But, make no mistake… they are getting older, and the next step up on the fleet chain is going to be most unpleasant for a number of local airports.

These communities need to move away from chasing elixirs and magic that are unhinged from an air transportation system and consumer preferences that are fundamentally different from just ten years ago.

Second, there are enormously disruptive new airliners in the pipeline. The 787 was just a minor taste of what’s coming.

At the 2016 International Aviation Forecast Summit, held at Reno/Tahoe, we showcased the new Boom Technologies 45-50 seat supersonic airliner. At the time, the usual cognoscenti advised us that since the Concorde (which rolled out when Gunsmoke was the #1 TV show, and smoking Raleighs for those valuable coupons was the in thing) didn’t work, that meant that this new airplane was also doomed.

Today, the Boom Technologies airliner has over 130 orders, and support from Japan Airlines, Virgin, and several major component suppliers…

The unhinged effect of the Boom Airliner is that it will – will – have the effect of functionally moving the high-yield business/first customer segments off of the front ends of 777s, A-350s, and A-330s.

Then, we may want to get into the issue of new powerplant technologies… maybe.

Regionalization.  Reality is only starting to hit some mid-size regional airports. The traditional do-a-study-lure-an-airline-to-a-new-route approaches are now largely disconnected from the past… unhinged.

The fact is that changes in fleets and raw economics have laid bare the nonsense foisted on many airport that if they want certain new service, it’s just a matter of reaching out for one of the faceless many airlines out there.

One Midwest community recently touted that it had over 31,000 annual O&D in the Boston market, and therefore, it was a slam dunk to “lure” an airline into nonstop flights.

The fact that this number – if all were boarded on a single flight – represents less than a 50% load factor on the smallest airliner of the only (and not identified) airline that could have a snow cone’s chance in Havana of even considering such a route. Apparently, that part of the “route analysis” was somehow left out.

Point: this example is not rare, anymore. Traditional air access planning is increasingly devoid of any relationship with new air transportation realities… it’s unhinged.

Internationalization. It was Boyd Group International in 2008 that first outlined the value of internal, non-hubsite US airports to EU carrier systems.

Today, that trend is well underway. Nashville, Indianapolis, Austin, New Orleans… and more. Plus, Boston even now has nonstops from China.

What this represents is the need for every mid-size and large airport to become more internationally-focused. No, nonstops to Heathrow aren’t in the cards for Ithaca… but access-planning for effective connectivity to US gateways is a future imperative. (One, by the way, they are pursuing.)

Join Us In Denver & Get A Grip On The Future.  It’s a new aviation industry – unhinged… unstable, unplotted, un-experienced, and yes, confusing.

But it’s reality – and that’s what we’ll be exploring at the International Aviation Forecast Summit – no wandering “panels” – instead, sessions that will illuminate the future.

We’ll be discussing the unhinged future with airline CEOs, aircraft manufacturers, suppliers, and financial experts… uncovering what aviation will emerge into in the coming years. If you can attend only one conference this year, the IAFS™ should be the one.

If you’re not registered, click here for more information and to get the early registration rate.

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March 5, 2018

Before We Start, An Exciting Announcement

Southwest Airlines Joins As Platinum Sponsor of The

International Aviation Forecast Summit

Airline Industry Leaders To Be A Key Part of the #1 Industry Event.

We are honored to announce that Southwest Airlines will be a platinum sponsor of the 23rd Boyd Group International Aviation Forecast Summit.

Andrew Watterson, Executive Vice President & Chief Revenue Officer, will be joining us at the Summit, and outlining the new aggressive directions of Southwest. He will be joined by several other staff from Southwest, too.

This year, the Summit will again eclipse any other aviation event for insight and futurist perspectives.

We’ll be hearing from senior decision-executives from across the entire aviation spectrum… delivering new perspectives that won’t be found at any other aviation event. Perspectives that can improve and hone long-term planning, regardless of the sector of the industry you’re in.

Where Are Airlines Headed In The Future? … Join Us & Hear It From The People Making the Decisions.  As the name implies, the Summit really is all about forecasts – trend projections, traffic growth, fleet shifts, and airline strategies.

One of the key areas we’ll be addressing is the major changes to the US air transportation system due to massive increases in expansion of ULCC service.

Boyd Group International has defined this new dynamic as the Parallel Airline Universe – because the basic model is one founded on very different business objectives from traditional airline planning.

More and more, the objective is to position air travel as a consumer spend option, right along with other discretionary options. This means the traditional air service planning approaches need to be materially revised. It also means that traditional views of “air service” can no longer be approached as in the past.

More Industry Leaders – More Business Intelligence. At the Summit, we’ll be joined by Barry Biffle, CEO of Frontier, Robert Fornaro, CEO of Spirit, and Jude Bricker, CEO of Sun Country – and these are just for starters. And if you’re looking for networking, the IAFS hosts more airline planning and management staff than any other event.

For more information on this #1 aviation forecast and networking event, click here, and register while early rates are still in effect.

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Revision: Third-Quarter 2018 –

Stronger Enplanement Growth Forecasted

The strengthening economy is translating in to stronger traffic growth.

A revised Airports:USA enplanement forecast indicates that we will see 2018 trending toward 3.9% and 4.4% growth in the third quarter, and the potential for as much as 5.2% in the last three months of 2018.

But, as we forecasted earlier, the growth will be uneven, and accompanied by huge percentage spikes at some mid-size airports.

Comparing capacity plans for the third quarter of 2018 v 2017, the US airline industry will be adding just over 4.2% more seats… but that’s not the same as “more capacity” spread over a static traffic demand flow.

The Traditional Airline sector will continue to see measured growth, some of which will be the result of fleet changes.

This will also be accompanied by rapid percentage expansion of the Parallel Airline system as it moves to position air travel as a discretionary spending option.

Separating the two models, and looking at the third quarter of 2018, the Parallel segment is planning strong percentage expansion, but it’s not “excess capacity” that some Wall Street dwellers fear, because it’s mostly on routes that have little of no nonstop service, and where the fare will determine the “demand.”

It’s putting airline seats on the consumer shelf, competing with Home Depot more than with United, Delta, American or Southwest.

In the third quarter of 2018, the three Parallel carriers will account for almost 7% of total US capacity – but it will be mostly in markets that are not directly competitively-aligned to take share from the six traditional-model carrier systems.

In most of the recent expansion announced by Frontier, for example, it’s clear that they are after developing new consumer flows, instead of invading existing ones.

Another Player Expected. Note that this data does not include Sun Country, which is expected to enter the fray aggressively by the end of the year.

For now, this represents low competitive threat to the traditional airline model, because it’s not just new capacity tossed on top of existing seats, as some in the financial world are contending.

Get Ready For Disruption – Particularly At Mid-Size Airports. It’s  also very clear from the track record of the last 18 months that the Parallel Airline system is fluid… if a new route doesn’t develop quickly, the airline goes into goodbye gear.

Islip (which, by the way, is no more an access point to New York City than is Allentown) has seen this in spades in the last year.

Remember, many of the expansion routes these Parallel Airlines are entering are strictly Captain Kirk territory – where no airline has gone before, at least in the last decade.

Join ULCC Leaders In Denver, August 19-21, And Hear It From ULCC CEOs. At the International Aviation Forecast Summit this August, we’re going to be discussing this new model – and how it will evolve as a core part of the air transportation system – directly with the CEOs that are driving it.

No rambling boring panels… just direct interaction with the thought-leaders that will shape the future.

The IAFS delivers forecasts and business intelligence that eclipses any other aviation event. Data and information that relates to the real-world and that delivers the competitive planning edge for all sectors of the industry.

Click here for the latest on the International Aviation Forecast Summit, and to register at the special early rate.

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February 26, 2018

The Seat Size Controversy… More Inaccurate Media Reporting

This past week there were a couple of stories on how some of the inhabitants of congress want to pressure the FAA into legislating seat dimensions.

To “fix” a problem requires having a knowledge of the problem. That’s not the case here.

There is no question that seat “pitch” – simply put, space between rows – has gotten much tighter in the last 20 years… particularly in the last five.

But that’s not the same as seat-width, which truth be known, has actually – on average – grown in the last 20 years in US skies.

Don’t Check The Source – Especially If It Agrees With The Reporter’s Pre-Conceived Conclusion. These articles are often embellished by the oh-so-righteous statement that seat-width has also shrunken from an average of 18.5 inches a few years ago (whenever that was) to an average of 17 inches today. The articles then attribute the source of this statistic to one consumer group or another…

Fake news lives. It’s a flat-out false statistic, at least for US airlines.

Here’s a fact to ponder…. In the US, the smallest seat width in economy cabins at US airlines is 17 inches. (This does not include any smattering left of air taxis or third-tier carriers flying very small aircraft.)

That’s the smallest, and in the US it is found only on categories of “regional” jets.

New Airliners Have Changed The Mix. Let’s take a look …despite what some media sources mis-report, the B-737/757 has exactly the same fuselage width as the first 707s that entered service in 1958.

The cross-cabin seat density in normal economy has always been six… so shrinking the width of the actual seat would gain nothing in regard to more passenger density. It’s been around 17.5 inches since 1958. So even if it were originally at 18.5 (which is bogus), there’s no way shrinking the width would deliver more capacity.

Most of the reporters who spread this inaccurate drivel have no clue of the subject matter.

In fact, there has been some increase in seat density on some widebody airliners, but none in US operation are less than 17 inches wide.

(For the record, airlines have tried different seating configurations… in the 1960s, United dabbled with a second economy cabin with 5 across, It didn’t survive.)

Actually, the average width of the US economy seat has grown in the past 20 years. The expansion of the A-320 family actually has increased average tush width in US economy cabins… they have an average of 18 inches. The Embraer E-170/190 airliners have seats at approximately 18.2, and the new CSeries coming on line at Delta will have some seats at 19.

So here’s the bottom line… since the narrowest seats in US fleets are at 17 – and these are just on smaller “regional” jets – and virtually all other narrow-body airliners in US skies are above that, it doesn’t take an advanced degree in fractal geometry to conclude that the “average” today simply cannot be 17 inches.  The pandering consumer groups and the reporters who blindly rely on them have a credibility problem.

Simply put, the consumer gadfly organizations and their media groupies are passing out bad information. One wonders about the accuracy of the rest of their reporting. The congressional inhabitants who might repeat this garbage are in the same category.

So, the folks that are reporting a decline in average seat width – particularly in narrow-body US fleets – need to do some homework. Or find another profession.

Again, this is not to imply that seat pitch hasn’t declined.  It has.

But the story demands facts, not innuendo.

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BGI Delivers China Symposium At Raleigh-Durham

The Boyd Group International/China Ni Hao professionals were honored to be teamed with the Raleigh-Durham International Airport to deliver a comprehensive Symposium to North Carolina industry, civic, and government leaders, outlining the opportunities for China air service.

With the enormous Chinese business investment in the region, including Lenovo, Tencent, Smithfield Foods, and Triangle Tires, the North Carolina Research Triangle supports over 160,000 annual air travelers from China, according to BGI’s Airports:China forecasts.

The objective of the Symposium was to illuminate the realities of gaining nonstop access to China, which today does not yet have a fully-developed hub-and-spoke system that compares to that in the US. Indeed, today, the largest single airline operation is the China Southern system in Guangzhou, which is in southern China. It has @ 350 daily flights… compare that to some US connecting hubs, with between 600 and 900 departures.  This will evolve in the years ahead.

In the meantime, there’s lots of aggressive planning and outreach that needs to be pursued by US regions and airports to meet the China future.

At the event, BGI staff outlined the future evolution of the Chinese airline industry as it will affect RDU, as well as key data regarding where the communities of business interests will develop between North Carolina and China in the coming years. BGI is the leader in China-US air traffic and trend data,

We were honored to work with the team at RDU to deliver this program.

The China Era Is Here – And It’s An Opportunity for Regions Across America.

We would note that Boyd Group International and its team of China experts stand ready to assist communities and airports in developing aggressive China-Welcome programs.

Welcome & Wayfinding Programs – Chinese leisure and business visitors will prefer and gravitate to locations that make an effort to welcome them with basic but professional materials such as key communication touch-point signage, and making certain parts of the venue fully China-Welcome…

Professionally-Created Chinese Support Materials. BGI can craft a tailored program for any venue to assure that Chinese visitors – particularly business visitors – have the materials and informational guidance they need to have an anxiety-free visit, and to know that their hosts respect their business…

Local China-Welcome Outreach. If you are relying on machine-translated versions of your website and promotional documents, delete them immediately! They are usually very sloppy, inaccurate and in some cases offensive. Let BGI’s experts develop and create the message professionally…

Digital Outreach. BGI’s team has established WeChat, Baidu and other digital programs for US companies and organizations. We can literally put your airport or community in the pockets of millions of Chinese consumers…

China-Welcome Programs. Just as at the North Carolina Research Triangle, BGI can deliver incisive and informative programs on-site, designed to inform and fire-up the region to become more competitive for the billions in China-US investment and the more than 23 million Chinese leisure visitors expected to see the US over the next five years.

Point: If your region is interested in looking to the China future, we’re ready.

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February 19, 2018

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.

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February 12, 2018

And You Thought Twilight Zone Was Off The Air…

“By all legal means.”

This is the vow made by a lawyer in regard to getting justice for his young student client, who, he claims, was dreadfully treated by Spirit Airlines.

Seems that at the airport, it’s alleged that the airline told the kid that she couldn’t take her “emotional support” hamster on a flight. Compounding this outrage, the kid claims that the airline advised her to flush the dearly-loved rodent down the toilet

Which, she admits, she dutifully did.

Now, the media has run with this story – in most part because it’s so outrageously stupid. But beyond this specific incident, the stories are rife about “emotional support” animals – birds, pigs, rodents, lizards  and whatever else might be found in a re-run of River Monsters – being passed off as necessary to the passenger’s well-being.

In this politically correct world, a lot of the media really is reticent to go through the stupid criticism if they cover it directly as the silly nonsense that it represents… not to mention the fact that it’s a ridiculous story in the first place.

If somebody needs a peacock to travel emotionally under control, it’s not a trip to Miami that he or she really needs. Besides, legroom is short enough without having an emotional support python curled up in front of 13B.

In this case, between the student, the lawyer, and the (very few) media reporters who actually think this is serious stuff, it appears that the only player in this mess that might have had a clue ended up going down the loo.

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The Parallel Airline Universe –

Quantum Expansion. Quantum Disruption of The Status Quo

The game is on… the parallel airline universe is growing.

Frontier just announced a massive expansion across the US… low fare, point-to-point flying involving mostly non-hubsite, mid-size airports.
Spirit last week switched a 20-unit order for A-320NEOs to sooner-available A-320CEOs.
Sun Country is making moves in the same direction as Frontier and Spirit
The US air transportation system is changing fundamentally.

Note that most of the markets just announced by Frontier are not all in direct competition with the First Universe. RDU-BUF, and CHS-AUS were not likely at the top of the in-boxes at American, Delta or United… nor will they be anytime soon. This represents a major new direction in air transportation in the US.

This also represents using high-density narrow-bodies to stimulate traffic between secondary, mid-size commercial centers.

Message To Wall Street: Developing New Revenue Is Not “Over Expansion.” These new strategies on the part of both Universes point to a situation where the outdated Wall Street definition of “over-capacity” gets tossed into the trash bin of history. There are no dynamics in play that rule out that the type of expansion by the Parallel Airline Universe won’t be not only successful, but also actually additive to total air transportation ridership.

Naturally, no guarantees, but the knee-jerk denunciations from the financial gurus that any capacity additions are bad for the industry should be taken within this new context.

The Magic Studies Are No Longer Needed. There’s another clear indication coming from these expansions on the part of both Universes… they know where they are headed, and outside input is increasingly a day late and a fleet-announcement short. The concept that airline planners are sitting in lonely cubicles waiting for some consultant’s magum-opus “market study” to give them some sense of direction is dead.

These latest expansion moves were generated entirely within the confines of the carriers themselves.

The days of a consultant marching in with a 60-page boiler-plate compendium of charts and graphs that will have any effect on airline planners are over. They are making their own decisions, and it’s fantasy that doing a regional “survey” or “drive analysis” will materially shift their planning.

Today, for any community, the approach must be to first identify the carrier’s specific strategy, and determine if a market makes sense or not for them. The starting point is the carrier’s strategic direction – before tossing $30K at a generic study. Or doing a blind 20-minute session at a speed-date event.

Come Hear The Facts From The CEOs Making The Decisions. At the 23rd Annual International Aviation Forecast Summit, we’ll be exploring the new future of air transportation in America.

We’re excited that the CEOs of Frontier, Spirit and Sun Country will be participating and presenting their views of how the airline system will evolve in the next five years. And, we’ll be exploring the views of the First Universe, with executives from carriers across the industry and across the globe.

This year, the Boyd Group International Airports:USA forecast session will focus on how this emerging air transportation system will directly affect community air access… the concept of regionalization will expand, and there will be shifts in consumer travel patterns. Get ready for projections and trend analyses that no other event will even get close to.

There’s lots more to the IAFS this year – the range of futurist business intelligence represents the competitive edge for every sector of aviation.

We’ll be covering new concepts – new aircraft, new international traffic flows, new consumer directions, the effects of changes in communication channels on air service, and much more.

Before committing to any other aviation event this year, check out the IAFS. Our regular attendees will tell you that it delivers more insight, more actionable data, and better networking.

To register and find out the latest on the IAFS, click here … and join your colleagues August 19-21 in Denver.

Also, we’re planning on announcing some exiting related events on that week-end that will make your visit to Colorado and the Mile High City a very special event.

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February 5, 2018

The US Air Transportation System of 2028

Preparing For The Future Means First Accepting It

One of the biggest challenges to the future is accepting the fact that the future is the sum outcome of a wide range of anticipated and episodic changes in the economic environment.

Many of them uncomfortable and disruptive.

Unfortunately, the result of trying to avoid the discomfort of change is today demonstrated in the fact that much of the nation’s infrastructure planning is based on what was needed for yesterday and today’s economic systems.

As Boyd Group International has pointed out, our entire communication systems have changed over the past 30 years, and that includes the air transportation channel.

Unfortunately, this reality is too often totally ignored.

Take a look at rearview mirror boondoggles like “high speed rail” that – in most proposed applications – tend to ignore just about every earthly reality – evolving consumer travel patterns, cost issues, alternative emerging communication trends, and the realities of a political system that spends first and asks intelligent questions later.

Moving to aviation – let’s look at today v ten years ago… we compare the US airline system in 2018 with that of 2008. It’s different.

The trends are clear and obvious… yet much of the “ASD” programs currently seen are oblivious… they assume the past is just the same as the future.

Regardless, the fact is that the entire air transportation system is fundamentally different from just ten years ago.

The multi-fleet, full-network systems – American, Delta and United – have consolidated into larger aircraft, and fewer departures. The rest of the industry is also evolving into larger units of capacity, including the parallel airline universe represented by Allegiant, Frontier, Spirit and Sun Country.

Economics, changing consumer patterns, reduced value of intra-regional air service, new fleets, and the emergence of alternative communication systems, have structurally changed air transportation’s role in the US economy.

So, where will the system evolve in the next ten years?

Let’s Fast Forward Ten Years And Look Back. At the 23rd International Aviation Forecast Summit, August 19-21 in Denver, we’ll be exploring this. We’ll be looking at the expected fleets that will be in operation in 2028, based on not only BGI forecasts, but those of the major manufacturers.

We’ll be looking at issues such as the emergence of new-technology propulsion systems, such as hybrid and electric. We’ll again have Ben Brockwell of OPIS, the leading expert in fuel trends, at the Summit to deliver his company’s often iconoclastic but usually accurate projections of how oil prices will redirect air transportation.

Most importantly, we’ll be exploring the one factor that most ASD studies avoid – changes in consumer travel and communication patterns that we can expect by 2028. Just as the last ten years have changed air transportation, you can be assured that by 2028 things will be fundamentally different – and disruptive.

This is the type of no-holds-barred data and forecasts that has made the Summit the most prestigious event in aviation. Leaders don’t go by the book – they write the book, and this defines the attendees at the IAFS.

So, if you are planning for the future, join us and industry decision-makers from around the globe in Denver this August. Regardless of the sector of aviation you may be in, the Summit delivers insight and perspectives that are available at no other event.

Click here for the latest on the IAFS and to register.

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January 29, 2018 Update

To Start Off This Week…

Just two days left for the New Year’s Registration rate for the 23rd annual International Aviation Forecast Summit.

This year will be the most comprehensive and most valuable ever. Whatever sector of aviation you’re in, the Summit delivers the insights and perspectives you need for the future – right from the industry decision-makers.

We’re glad to announce that Barry Biffle, CEO of Frontier will be joining us this year, adding to the distinguished array of discussion sessions and forecast segments.

We are also planning some very exciting special social events for the Summit.

With the New Year’s rate, the Summit – which delivers information and perspectives from leaders across the industry – is actually less than what some second-tier “speed date” events are charging.

So, click here and register – join us in Denver August 19-21 and get ahead of the competition.

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Wall Street & United Expansion Strategy:

… Chicken Little Lives!

“Because that’s where the money is.”

According to lore, this was the answer when a reporter asked 1950s hold-up man Willie Sutton why he strictly targeted banks.

It’s also the answer that United Airlines is accurately and candidly delivering when people from the financial world angrily demand to know why the airline is currently “adding capacity” with new or expanded service to mid-size (not small, by the way) airports.

It’s unfortunate that the money-gurus aren’t listening to the answers.

If they did, they might see the future. But right now, the trendy thing is to babble about the evils of adding “capacity.”  Any increase is like letting anthrax in the financial door, to hear what these gurus are saying.

But the truth is that the apparent strategy of UA is far more connected to emerging realities than what’s being expressed in many analysts’ reports.

Let’s take stock…

The year 2017 was a banner year for air travel in the USA…

Airport enplanements went up over 3.3%. But it wasn’t across the board.

Air access in 2017 continued to regionalize, with many smaller airports experiencing the realities of airline economics (read, loss of service that was unsupportable) as consumers opted for more total-time-efficient itineraries at larger airports… many of them “mid-size.”

The proof of this is demonstrated by the record (and near-record) enplanements at over three  dozen (and counting as 2017 data comes in) mid-size airports, from Des Moines, To Norfolk, To Missoula, to Boise, to Kalispell. Add in Bangor, Scranton, Traverse City, and Fort Wayne. For starters.

Load factors are high, yields are stable, and the traffic growth is organic to the airport. There is core traffic demand at these points – almost all of which are at or well above filling more than 80% the seats leaving the gates. Mid-size airports is where the growth is.

So, for network airlines, it’s also where the money is.

In addition, the four major network carriers – American, Delta, Southwest and United – all registered load factors at their hubsites that represent what Boyd Group International defines as “hub-choke,” based on current capacity. There is a lot more revenue out there, and carefully adding more spokes to their connecting hubs will access it.

That is exactly what United is doing… because that’s where the money is.

So, the trends are obvious… passenger demand spiking at midsize airports, plus hub capacity maxed. Legitimate organic demand at many mid-size airports is exceeding capacity.

United is going after that revenue opportunity. Because that’s where the money is.

When their strategy is analyzed in the context of the emerging dynamics and economics of the air transportation business, it makes enormous sense. It tracks with the consumer trend of regionalizing air access into mid-size airports.  It is aimed at maximizing system revenue.

In addition, these new revenue streams make United more formidable in dealing with the ULCC model, which is entirely one that depends on point-to-point traffic, mostly in high-density markets, and dependent largely on stimulating impulse demand.

Let’s bang on the financial industry’s cage. Here’s a fact: United Airlines faces a lot more strong domestic growth opportunities than it has airplanes.

The data are obvious, and United’s strategy is sound business.

But, the “experts” are in a tizzy. To listen to these people, they are misrepresenting that United is just tossing more seats on top of what’s there already, which, supposedly will lead to a situation where United will need to slash fares to sell them.

In the context of airline industry and consumer trends, that conclusion is garbage. Trendy, but still really off-the-bubble nonsense.

The problem is that many of these self-appointed gurus on Wall Street think that an airline ASK/ASM is just another product that has to be sold inside some single giant seat store. So, according to their Econ 101 textbook, the more capacity produced, the danger is a massive fare war.

Fantasy land.

For the financial industry cognoscenti, jumping on this stuck-in-the-mud band wagon is now the thing to do. Denouncing United, the comments from the usual suspects in the stock-and-paper world resulted in a hit to United’s stock price.

“Warning, Warning! This is not a drill! The sky is falling, and United Airlines is the one pulling it down!”

Here’s a typical comment from the all-knowing media…

“… United said it expects to increase capacity between 4 percent and 6 percent in 2018, adding it sees a similar growth rate in 2019 and 2020. This move could impact United’s profit margins as it tries to compete with lower fares offered by competing airlines as it will have to pay to operate those flights or potentially offer competitive fares to entice passengers on board. It could also lead other airlines down a similar path…”

Hello earthlings tied to hard reality. These conclusions are uninformed nonsense. These suggestions of “over capacity” have no – zero, nada, zip, mei-you – relationship to the context of what United, and to a lesser extent, American, are doing.

What United is pursuing is strengthening its revenue streams, which is very different from willy-nilly putting out seats that will need to be sold at fire-sale prices. Yet that’s the myopic babble coming out of some of these august financial houses.

In the above quote – actually it’s from one of the otherwise most professional financial media outlets – the comment about having to lower fares to “entice passengers on board…” is the leper’s bell of a report that has no connection to today’s airline industry.

To imply this – without any analysis of where and how United is expanding –  is simply monkey-hear, monkey-say reporting.

Suggestion: Tumble To The Fact That There’s A Revenue Side, Too. Here’s a factoid – just about every new hub-spoke United is adding is at an airport where ambient load factors are over 80% – in many cases, well over that figure. When that happens, it usually means that there is additional – and revenue-viable – traffic demand.

In short, it’s where the money is.

Furthermore, this program will strengthen United’s competitiveness v the ULCC model. A feed flight from Norfolk will deliver more traffic through Denver, and free up additional seats on their now nearly-full Norfolk-Chicago flights (over 85%) to a hub operation at ORD that’s also at 85% capacity.

This is not excess capacity… it’s sound market planning. And, yes, it’s where the money is.

Point: the lemming stuff coming out of the financial industry isn’t expert advice, by a long shot.

Soild Planning. Regardless of Kibitzing From Wall Street. In a rational world, inhabited by “experts” that really understood the airline business, the program at United Airlines would be lauded, instead of getting knee-jerk responses from people in the business of commenting on how they can move stock prices.

That’s a blunt statement, but it’s accurate.

Conclusion: The stuff from the alleged financial experts is off-base. United is pursuing a well-planned and professional strategy that will benefit employees and shareholders.

They apparently are running an airline for the future… not for tomorrow’s closing bell.

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January 22, 2018 Update

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. In fact, much of the transportation planning has very little connection with consumer needs and trends in the 21st century. 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 the physical demands to move people from A to B.

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. They 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 for “high speed” rail are directly out of fantasy land, just as are the conclusions in a lot of “market studies” done for small airports.

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.

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More About The IAFS…

International Aviation Forecast Summit… 

The special New Year’s rate is still in place through January 31.

Next week. we’ll be announcing the airline CEOs that will be joining us to share their views of the future of global aviation.

This week, we are excited to announce Embraer will be a major sponsor of the 2018 IAFS.

In addition, in the sessions we’re in the process of monitoring airline and economic trends to be covered at the Airport:USA enplanement forecasts, as well as where we can expect to see major shifts in air service in the US.

More Regionalization – More Internal Airline Determination of Market Changes. The recent route announcements from American, United and Frontier signal a fundamental shift in how airlines will be pursuing changes in their route systems – changes that dictate major changes in how airports will need to address “air service development” in the future. It’s a new ball game, where jive-time “market studies” from the outside carry even less impact than in the past.

This is just one area that the IAFS will be covering. We’d again point out that the New Year’s rate is even less than registration at some speed date events – which deliver zero in terms of planning for the future.

More information & to register, click here.

We’ll see you in Denver, August 19-21!

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January 15, 2018 Update

News: International Aviation Forecast Summit.

The New Year’s Special Early Registration rates are in effect through January 31.

The #1 Event – And The #1 Investment In The Future. Take a look… to attend the IAFS, the #1 industry event, with input and interaction from CEOs and executives from airlines and aviation companies around the world, is actually less expensive than attending some second-tier “speed date” events.

At the IAFS, attendees network with dozens of airline staff, as well as the leaders who will be shaping the future.

In addition, the forecasts delivered at the IAFS – including airline trends, airport traffic, fleet applications and more – represent business intelligence that is of competitive value to all players in aviation.

So, before you commit to any aviation event for 2018, check out the IAFS, and join the industry leaders gathering in Denver, August 19-21.

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If US Carriers Want A Piece of The US-China Action…

They’d Best Understand It Isn’t Just Another International Market

One of the hottest social media threads in China last week was about Delta Air Lines.

And it wasn’t positive.

But it reflects a consistent issue regarding US companies and venues trying to do business with China. The problem: lack of attention to the sensitivities and needs of the Chinese market.

This latest event is not a minor issue – the Chinese government itself is ticked off, and when that happens, Chinese consumers make alternate decisions.

Farming Out China Programs To Unqualified Companies Can Be Dangerous. It seems that whoever developed Delta’s website was clueless about China.

Incredibly, they listed “countries” (“国家”)  that included showing Taiwan as an independent, stand-alone nation.  This is a lot more than just a minor typo.

The government of the PRC is not real happy about having a whole region of its nation being represented as a foreign country.

While not much of a story here in the US – yet – it has resulted in very serious warnings to Delta directly from the PRC government.

Poor China Focus = Business Vulnerabilities. See, the people in China (not to mention even the Nationalists they tossed off the Mainland in 1949) staunchly hold that Taiwan has always been and always will be a province of China, regardless of what the governmental structures may be.

Whatever vendor did this website is not a friend of Delta. And it sure is not in line for any business from anybody in the Middle Kingdom, either. But it does have Delta in some hot water.

The Dragon Wants Answers… The China Civil Aviation Bureau has issued to Delta what is a lot more than a pro-forma nastygram.

They’re demanding to immediately “arrange talks” directly with the Delta staff responsible, in order to “rectify and reform” this insult. Finally, they are demanding that Delta “make a public apology”, presumably to the entire Chinese people.

And since this is bubbling on Chinese social media, it’s not going to help build China-generated O&D for Delta. That this situation could arise is especially strange, since Delta has actually invested in China Eastern Airlines.

Developing a China Strategy Depends On China-Knowledge. On Delta’s part, there certainly was no intent to slight China, or get involved in internal matters such as the status of Taiwan.

But the problem is that the airline obviously relied on “expertise” regarding China that was anything but.

We’ve pointed out other areas where the US travel industry is way behind the curve in accommodating – or even bothering to try to understand – the China market:

Customs Facilities. Most of our FIS facilities are an embarrassment – where there is official Customs signage in Chinese, it’s in a version not used in China itself. That’s an insult to consumers and visitors from the PRC.
Lack of Understanding of The Chinese Market. Many US carriers’ Chinese translations, such as on domestic-flight emergency cards, often don’t bother to use the simplified system used in mainland China. Whatever sloppy vendors they use still assume that traditional Chinese is used there. But it is still used on Taiwan, which could be another embarrassing PR time bomb, if the PRC concludes that this is a de facto indication that the airline still thinks the Nationalists are the real China. In any case, it is an insult to visitors from the PRC.
Near-Zero Attention To Specific Needs of Chinese Visitors. Airport wayfinding for Chinese entering the US is abominable. Sure, every major airport will say they’re “China ready” – but the reality is that for Chinese trying to make a connection, they are on their own.
Amateur-Act Website “Translations” – Many US airports and communities continue to insult Chinese travelers with raw machine-done website “translations” that read like the Chinese version of the Clampetts wrote them. Web designers peddling these add-ons are not doing the client any favors.
Lack of Professional Outreach In China. As for outreach in China, just having a cookie-cutter Brand USA website doesn’t deliver much more than generic eye-candy. There are better options.
Getting Taken For A Pedicab Ride. There’s a lot of charlatan-stuff going on, too. One US gateway airport proudly showed us their WeChat app some vendor developed for them. Lovely, except it isn’t a China-registered business version. Almost useless.
China-Welcome™ Takes China Expertise Plus Travel Expertise. Boyd Group International and its partners at China Ni Hao, LLC represent the new professional standard in assisting airports, airlines, travel companies, and communities in crafting appropriate and tailored programs to attract and maintain more of this important and growing traffic. It’s not rocket science – it’s simply having expertise in China-outreach.

We’re developing China-Welcome™ programs and symposiums for clients across the US. If you’re interested in effective outreach to attract more visitors and investment from the Middle Kingdom, click here and take a look at the services we offer.

We produce results… not complaint letters from the Chinese government.

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January 8, 2018 Update

Before We Start… The IAFS

We’d note that New Years Early Registration for the 23rd International Aviation Forecast Summit is available through 31 January.

This year, we’re planning another record-setting IAFS, and as always, we’ll be exploring the future with the executives from across the industry who will be making the decisions. Click here for more information and to register!

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BTS Data – Built For Yesterday

O&D, T-100, Fares, Yields, Etc… Just A Starting Point – And Not Always An Accurate One, Either.

Hard, actionable business intelligence.

It’s not what’s available from Washington.

Here’s a bit of a bummer for all those folks who go to the BTS website (or a vendor using raw BTS numbers), pull down all sorts of reports and tables, and then log off thinking that they’ve just visited an electronic Delphi.

You may have numbers but you don’t have accurate business intelligence. Worse, it tells nothing about the future – because increasingly that’s driven by subjective corporate decisions.

Perfect For The Air Transportation System of 1975. The fact is that the DOT/FAA/BTS reporting systems are decades behind the total evolution of the airline industry over the past 35 years. As a result, much of the information in its raw form is flat inaccurate.

But that only means that professionals in aviation understand that such data are only starting points… amateurs take it as gospel.

A System Long Gone: Reporting “Major” And “Regional” Carrier Data. We’ll start with this. The FAA reporting is completely in the past. They do not understand the structure of the airline industry.

They still think that there is a “regional airline” industry, separate and distinct from “major airlines” – and they still separate the two as categories in much of their reporting.

FAA is oblivious that these once-independent carriers are now mostly leasing planes and crews to majors.

Splitting out the data is not only misleading but incompetent. It is a red flag to planning professionals to understand that the rest of the reporting is also affected by a woeful lack of knowledge of the current airline system.

From Certificated Carriers To Airline Brand Systems. This leads to the core of the problem with the outdated and obsolete data coming from the DOT/FAA/BTS: in the last three decades, the airline system has evolved from independent “certificated operators” to brand-systems comprised of several certificated operators.

Yet most of the reporting is still based on the inaccurate assumption that, for example, SkyWest is a consumer-brand, by virtue of the fact that it’s a “certificated carrier.” Actually, SkyWest leases aircraft and crews under its own certificate to American, United, Delta, and Alaska. Almost nothing is done under the SkyWest brand itself, anymore.

But that’s not how the data are collected and reported.

That means that much of the data reported for “American Airlines” does not include all of the brand system of AA – just the parts that are not outsourced to lift providers such as SkyWest, Envoy, Piedmont, Air Wisconsin, etc. The portion of American’s flights operated under its certificate is less than 65% of their total system.

Another big problem comes up when the same lift provider, such as SkyWest, operates the same market for more than one major brand. Just taking the raw BTS data, without further analysis, does not always break these traffic streams out separately.

Oversale & “On-Time” Reports – Partial & Misleading. Going into other areas it gets muddier and more useless.

“Oversale” data are particularly misleading, because, again, they’re still reported by certificated carrier. That means that the total oversale rate for United or American or Delta or Alaska isn’t compiled.

Worse, the capacity and booking rates for flights operated by these lift providers – as are schedules – set by the major brand to which it leases its aircraft, and the lift provider has little control over what gets oversold.

As for “on-time” – BTS does not yet include all on-time by brand. Worse, entities such as Air Wisconsin, which operates nothing over 50 seats, is not required to report schedule performance… that’s more than 60 airplanes with the AA brand.

Amateurs who don’t understand the data – and the shortfalls of the reporting – don’t recognize this. Yet, year after year, we’re regaled silly and inaccurate “quality reports” that list the data by certificated carrier, not disclosing that this is useless to the consumer.

More Data Fun – The O&D “Survey.”  As for traffic statistics, the “O&D” reports are still reported based on the capabilities of data collection systems being used long before Steve Jobs started tinkering in his garage.

That’s the reason that it’s based on just a 10% “sample” – in the 1960s and 1970s, there was no way the data could be complied on a 100% basis. Historically, it was done by using tickets with the number ending in “0”, and also group tickets. (This is really ancient stuff.)

The problem today – although electronically reported – is that this sample can be massively inaccurate – particularly as the market sizes get smaller.

Worse, there can be other challenges with the current reporting system, such as determining itinerary breaks, and projecting traffic flows. Indeed, there have been data that show connecting passengers flowing through Bangor – which is patently inaccurate, and actually, impossible.

No Fix In Sight. In 1997 – two decades ago – the GAO noted that this 10% sampling was inaccurate and misleading, and should be replaced by full 100% reporting.

Today, Boyd Group International’s Aviation DataMiner™ – unlike some sources – has the capacity to easily manage a full reporting system, and we fully endorse the recommendation, which, by the way, has pretty much been ignored.

What’s amazing is that most vendors and re-sellers of aviation data make no effort to either address these shortfalls or even advise their clients of them. That’s not surprising in that many of these re-sellers have no idea of the issue in the first place.

O&D Confused With Consumer Demand. Another bit of quicksand that “air service development” programs tend to get into is confusing reported O&D as being hard and fast core consumer demand.

It’s not. Maybe in the regulated 1950s, but not today.

O&D traffic today is the result of a range of factors that go beyond organic consumer demand. Levels of capacity, fares, competition with other carriers and airline corporate strategies affect traffic levels, and all are constantly in flux.

Therefore, comments like, “the O&D survey shows 85 PDEW to LAX” (passengers per day each way) are meaningless if the factors driving it are not fully analyzed.

If Allegiant is in the market, that means there’s impulse traffic, which is very different from core demand. If the ambient fares are high, or the access is constricted due to hub-choke, the real potential “demand” might be double current traffic levels. Just using reported O&D data does not address any of this.

Fare Data – Cost v Ticket Spend. Every month, left without adult supervision, media types get BTS fare data reports, and put out stories comparing “ticket prices” between various airports.

Nice. But stories like this are completely ignorant of the basis of the data.

First, in most cases, the BTS data doesn’t relate to comparing cost of travel, per se, but instead, average ticket spend. That’s a metric affected by a whole lot of variables – such as geographic location, local economy, population base, and much more.

For example, the average “ticket price” at Atlanta is $198.75. At LAX, it’s $219.70. (Including federal fees and taxes, first half of 2017.)

Now, the uninformed, and soon-to-misinform-the-public reporter, would grab this kernel of info and trumpet that Atlanta’s “ticket prices” are 10% below that of LAX.

But what the reporter doesn’t bother with are the factors behind this one factoid.

For one thing, the two data points are not comparable… Atlanta’s average domestic passenger trip is 895 miles. For LAX, it’s 1,548 miles – the average “ticket” is for an itinerary 72% longer than that at Atlanta, so the “ticket price” is higher due to material differences in the traffic base.

Another leeetle point that most in the media would miss, is that the average domestic fare per mile at LAX is 12.5 cents… at ATL it 19.9 cents. That’s 60% higher… but it has to do with the traffic mix, not whether airlines are charging more at one airport or another.

Sometimes the dominant industry in a region will drive traffic patterns, as therefore, the average ticket spend. Midland, Texas, for example, has business traffic patterns that are strongly affected by the oil business, resulting in disproportionate traffic to shorter-haul destinations, and therefore higher reported per-mile fares, but relatively low “ticket prices.”

The take away here is that comparing one airport’s average fares with those at other airports is strictly an amateur act. It’s unfortunate that it tends to be a staple in most traditional ASD reports.

Point: Unrefined Data Is Just That… It Needs Work. DOT/FAA/BTS data are only starting points, but without a professional understanding of the air transportation system AND the actual reporting systems, they are like the difference between crude oil and refined gasoline.

It’s Not Data That’s Important… It’s What It Represents Within Future Contexts. At Boyd Group International, our Aviation DataMiner™ system was developed simply because we needed a lot more than BTS numbers to assist our clients as well as accomplish forecasts and research projects.

So we developed a set of systems that deliver more than numbers. Aviation DataMiner™ delivers analytical firepower for industry professionals who are focused on the future.

Before You Spend On Another Source – Check Out The Best. What we’ve discussed here is the core difference between Aviation DataMiner™ and other sources. DataMiner goes beyond reports, and with the professional expertise of BGI, delivers actionable business intelligence.

We’d be delighted to show you the reason companies across the aviation spectrum have switched to Aviation DataMiner™.

Click here to register right now for a free trial.

You’ll find that the combination of our futurist expertise, and the superior real-world accuracy of DataMiner™ is your competitive planning edge.

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January 2, 2018 Update

Happy New Year!

Let’s Look at 2018 – Beyond The Consensus

The 2018 Boyd Group International Aviation Trend Outlook is now available.

In the document, we cover several areas where evolutionary and episodic change can be expected in the coming year and beyond.

Prepare For Some New Futurist Concepts. Boyd Group International has a track record of forecasting trends that are missed by other sources. The reason is simple: we do not accept at face value the “consensus” or what may be described as “ambient thinking.”

Those terms are just alternative descriptions of making sure that there are no risks taken and there’s no potential of challenging the entrenched thinking of the status-quo.

For more than three decades, Boyd Group International has built a track record of assisting clients from across aviation and across the globe in identifying new future opportunities. In doing so, we don’t go by the book. We write the future book, which is what we’ve done with this year’s Outlook.

Below are just a few basic subject synopses of the 2018 predictions and trend projections in this year’s BGI Aviation Trend Outlook. To view and download the complete document, just click here, and we’ll get it to you ASAP.

If you have any questions or input regarding this document, please let us know.

And, of course, if you need futurist aviation research, forecasting or consulting, we stand ready to assist. We would point out that many of the trends outlined herein are indicative of the scope and structure that will be delivered at the 23rd International Aviation Forecast Summit, August 19-23, 2018, hosted by Denver International Airport.

CEOs and senior executives from across the industry and across the globe will be here to openly discuss the future. No boring “panels.” Instead, direct discussion and exploration of the future from those who are shaping it.

To reserve your space and for more information: www.AviationForecastSummit.com Special New Year registration rates are now offered.

2018: Looking To A Strong, But Global 2018
Touching Briefly On Just Some of What’s Covered In the 2018 Aviation Trend Outlook…

Traffic Trend: Fundamental Growth… Plus More Impulse-Buy Capacity

Let’s put it on the line.

The hand-wringing from some in the financial world about airlines adding too much capacity in 2018 is strictly Chicken Little. Capacity discipline is firmly in control.

Look For @ 4% More Seats, But Less Than 3.5% More Flying. As of January 1, US carriers are scheduling a 3.9% increase in capacity for the first six months, compared to the same time period in 2017. Most of the reporting on this implies that carriers are simply adding flights on top of existing ones.

In some cases that is accurate, based on very high load factors, and particularly in cases where the carriers’ connecting hubs experience “hub-choke” – when there is demand for more feed through the hub, but the connecting banks to major destinations are functionally fully-booked.

But in other cases, much of the increase in capacity is based on network carriers (American, Delta, United and Southwest) adding new markets – particularly trans-border and international.

Also adding to the capacity picture is the expansion of the “parallel airline universe” – ULCCs expanding and offering fares that transcend ambient market “demand” and establish the travel product as an alternative application of discretionary dollars.

Wildcard: In any case, the recent reduction in the corporate tax rate, could result in carriers adding more capacity to meet newly-generated demand in the fourth quarter of 2018.

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2018 Trend: Hub-Choke Increasingly To Affect Route Planning

For airlines, experiencing very high load factors in key major markets to and from the carrier’s hubsite operations are generally positive.

However, this dynamic also represents some traffic spill – where consumers in, say, Abilene find it difficult to find space on the connecting flights from DFW. In some cases, carriers will use sophisticated analytical systems to build highest and best use scheduling – in effect weeding out feed markets that are the least revenue-productive for limited hub capacity. Expect more of this in the coming year.

Enter New Fleets:  With the phase out of what turboprops are left at American and United, and upgrade to increasingly cost-inefficient but larger 50-seat jets, more planning pressure will be but on network carriers to again review which small-airport routes  make the most sense in light of the major routes to which they feed being at or near functional capacity.

Now add in the new dynamic of AA, DL and UA creating new “basic fare” buckets, which are applied mainly to retain and attract more nonstop O&D traffic in key major (read:  nonstop hub) markets. This will further put a strain on the availability of capacity for smaller communities that depend on connect access at the hubsite.

The result is that, in many small-community feed markets, a load factor of 65% to the airline’s hubsite is functionally a “full” flight. There simply are no more seats available through the connecting hub.

This will continue to be an issue for smaller communities dependent on air access through a fully-booked hubsite operation. In many cases, these airports will be more than able to support the additional capacity to the connecting hub. Some, however, may be facing a potential pull-down in service.

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2018 Trend: Small Community Air Access: Fantasy Is No Longer An Option

Many small communities need to come to grips with the three major and largely irreversible trends that are shaping air access from the globe.

Hub-Choke. This we cover above, but what should not be ignored is that there is often no alternative airline to enter the a small community from an additional connecting hub. For example, when the distance to the UA/IAH hubsite represents more cost and more airplane time than the revenues that the market can generate, no amount of “market studies” will create more airlines or change economic realities. This is a reality that many smaller communities face.
Eclipsing Costs. The emerging “floor” for feed fleets to network systems is the 50-seat jet. It is being retired – slowly, now that fuel costs are where they are – but they do represent a higher revenue bar for communities to meet.
Consumer Preferences & Alternatives. Increasingly, within the emerging economics of airline operations, the type of scheduled air service that some smaller communities can support at the local airport is DOA. That’s because in many cases such service is consumer-inferior, less time-efficient, and actually less convenient than an hour’s drive (or even in some cases, even a 90-minute) drive to an alternative airport where the population (or an airline’s connecting hub) can support much wider flight access. This is another dynamic that no amount to civic hubris or more expensive and misleading “studies” will change. Regionalization of air access is an emerging reality in some parts of the US. It should be recognized and embraced, because the air transportation system isn’t returning to the 1980s.
That’s because in many cases such service  is consumer-inferior, less time-efficient, and actually less convenient than an hour’s drive (or even as we note in the Outlook in some cases, even a 90-minute drive) to an alternative airport where the population (or an airline’s connecting hub) can support much wider flight access.

In the Outlook we discuss how regionalization of air access is an emerging reality in some parts of the US. It should be recognized and embraced, because the air transportation system isn’t returning to the 1980s.

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2018 Trend: More EU Nonstops From The Heartland

A major dynamic discussed in the Outlook is the value that major non-hubsite US airports now represent to foreign carriers.

As was first outlined at the 2013 International Aviation Forecast Summit, key non-hubsite major US airports are prime candidates for EU carriers to add to their global systems.

For network carrier system such as British, Air France and Lufthansa, the traffic feed to their hubs in Europe from large US cities such as New Orleans, Indianapolis, Nashville, etc., can be very attractive.

The key factors for this service are generally, 1) a strong local population base, 2) very strong installed base of internationally-focused industry, and 3) – most important – strong highway network access from a wide population region.

This latter factor is important, as a nonstop London flight from, for example, New Orleans, is more convenient for folks to drive to from Gulfport, compared to the complexity of making a flight connection over IAH or ATL. This trend then tends to increase the profile of the larger airport as an alternative access point.

In addition, the massive expansion of impulse service to the Continent by WOW and Norwegian will open even more access. In these cases, however, the US point will be more of a destination, as opposed to a generator of feed traffic.

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Potential Trend: China Moving To Acquire Foreign Aircraft Manufacturers

In the Outlook, we step into uncharted territory by looking at the Chinese airliner industry, and making some bottom line projections on strategic planning that may be coming from the folks in Beijing in 2018.

What this means is that Boyd Group International research in the China aviation market indicates that we may see very significant and elsewhere-unforecasted moves by China to expand its global presence in the aircraft manufacturing sector.

In particular, there is a very real potential for Chinese entities to make a move to acquire either Bombardier or, more likely, Embraer. We believe the recent Boeing outreach to Embraer is at least partially a pre-emptive move.

Point: China is intent on becoming a major player in the airliner sector. Its current indigenous platforms are not going to be able to accomplish this. Therefore, an acquisition of Embraer or Bombardier (or, possibly another player we won’t mention right now) is not out of the question.

The potential shifts in relationships this could drive among suppliers, and the impact on the commercial direction of the US airframe and powerplant sectors would be very far-reaching in broadening the presence of Chinese business in America.

Getting Ready For China Can Make The Difference In Site-Selection. Moving on in that area, BGI predicts that more US airports and venues will need to become more welcoming to the Chinese leisure and business visitor.  To be sure, just about every US gateway airport claims it is ready for these travelers… but in most cases, Mars has better wayfinding and welcome than US facilities.

It goes beyond having a Mandarin speaker on-site, and it goes beyond veneer things like not offering ice water in restaurants. In regard to China communication, we also point out that the poor misled airports that have been sold an “international translation” website feature that includes Chinese, are simply making themselves look really amateur and silly to the Chinese consumer. The raw machine translations are insulting and tell the web visitor that the airport/community is out to lunch when it comes to professional outreach.

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Fuel & Labor Issues

It is understandable for financial analysts to be concerned regarding the potential effects of changes in these two key cost factors on airline bottom lines,

From a rational perspective, these are important to watch, and it is near-certain that in the next 18 months, labor costs will impact the bottom line at a number of carriers. However, given the expected robust demand, there are no thunderstorms on the horizon for 2018.

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These just scratch the surface of what to expect in 2018…There’s a lot more to explore.

To view and download the complete 2018 Aviation Trend Outlook, just click here, and we’ll get it to you ASAP.

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Fourth  Quarter 2017 Update Archives, Click Here

Monday, March 27, 2017

To Start This Week…

US Airline Fleet Shifts:

Now, The #1 Factor In Air Access Planning

Amid the usual approaches to “air service development” – studies, surveys, task forces, etc. – one factor – the one that by itself is critical – typically is totally ignored.

It’s airline fleet capability, and the resulting changes in mission applications. New fleets will materially shift air transportation in the US in the next five years.

More To Come In August. We’ll be covering this dynamic throughout the 22nd Boyd Group International Aviation Forecast Summit in August (see below), but here are some basics of the new environment.

If The Study Ignores Fleet Issues, It’s Worthless. Airline fleet capabilities are not static, and changes in how airlines are re-fleeting are completely disrupting how regions and communities need to plan to continue to be connected to the global economy.

The assumption in traditional- and obsolete – ASD methodologies is to tell the client that with the right data and carefully-crafted market information, airlines will come running.

Wrong. They won’t if they don’t have airplanes that can economically fit the market, not to mention if there’s no fit with the carrier’s strategic planning. These are usually ignored in ASD studies.

Changes Are Not Coming. They’re Here. Take this to the bank: airline fleet decisions will be the weathervane of air access changes. Everywhere on the globe.

Whether it’s Juneyao Airlines in China ordering 787s, or, as noted below, a US carrier in the process of retiring the last of its turboprops, it is fleet strategies that will be the best indicator of where and how airlines will operate in the future.

The Last Two Weeks Alone: Lots of Indicators. Here are some US fleet changes that will affect air service in the near term. Each sends a message for air access planning.

Air Wisconsin, soon will shift leasing its planes and crews from American to United.
This takes 69 CRJ-200s out of the AA system. But it only will deliver – at most – 56 RJs to United’s system, because in the last ten days, Air Wisconsin retired almost 20% of its fleet. More retirements may be in the future.

ExpressJet – part of the SkyWest system – just parked another 9 ERJ-145s in the last two weeks.
This is just the latest set of retirements. And remember, these planes aren’t coming out of the desert. When they get retired, typically key components are timed out and others are stripped off. They’re dead birds.

American Airlines just parked almost one third of the 37-seat D-8-100 turboprops operated by subsidiary Piedmont. Only 17 left, and that’s down from a onetime fleet of 77.
When the average fleet age is 27 years, the writing’s in the sky regarding what communities which can barely support current service with these planes need to start doing.

United Airlines. New management has reversed fleet planning, cancelling an order for 737-700s, and also cancelling a plan to acquire 3 more used A-319s. Consider the capacity issues and draw some route-planning conclusions.
These are just four examples.

At Boyd Group International, we assist our clients based on expertise across the industry. Based on comprehensive and current understanding of airline trends, we deliver insight for our clients, not studies and static reports.

When your organization needs futurist expertise, BGI is ready.

And speaking of being ready…

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Looking At The Next Five Years…

The Top Four Global Disruptive Aviation Trends

If you’re looking at the future, we’d suggest you make plans to be at the 22nd Annual Boyd Group International Aviation Forecast Summit.

From the first forecasts to identify the outcomes of code-sharing, to being the first – and very much alone – firm to forecast the end of small RJ demand, to most recently, using facts to illuminate the non-opportunity of near-term US-Cuba traffic, BGI has been in the front of the industry.

We’re doing it again, at the International Aviation Forecast Summit. It’s at the Wynn Resort in Las Vegas, August 26-29.

We’ve identified a number of emerging – and market-disruptive – trends, and we’re going to be discussing them with leaders from across the aviation industry and across the globe. For just a couple examples…

Forecast: Connectivity Replaces Local Air Service

As noted earlier, we’re finally seeing entities across the industry tumbling to the reality that air as a transportation mode no longer works in many applications – particularly low-volume markets.

The result will be more regionalization, and in several areas of the nation, co-terminalization, where different traffic segments utilize different airports in a region. The Airports:USA® forecast at the Summit will be covering this in detail.

We’ll be outlining this, and getting insight from not only airline executives, but other affected parts of aviation as well.

You can take this to the bank: other events won’t be covering this new travel dynamic.

Forecast: Major Challenges To New Airliner Demand

The 2018-2027 BGI Global Fleet Trend & Demand Forecast represents a major shift – for the first time in nearly a decade, the replacement of existing aircraft will represent barely 50% of the demand. That means future order books will be a lot thinner than over the past five years, being dependent on traffic growth, not replacing older airplanes.

This will have huge effects on suppliers, overhaul facilities – even the demand mix for aircraft technicians. We’ll be discussing this with aviation leaders.

Forecast: Airport Future Planning: The RJ Departure Is Good News

By 2019, the floor – in terms of unit capacity – for US airports will be 70-76 seats. Most veneer forecasts would indicate that this means trouble for many small US airports.

In most cases, it’s just the opposite. In the next five years, as 50-seaters take their rightful place in the desert sun, many small airports affected will see increases in enplanements.

Counter-intuitive? Certainly not.

The airline business has never been intuitive in the first place.

Forecast: New Disruptive Airliners. Yes, Supersonic Ones

The 787 and A-350 have already disrupted airline planning, delivering economics that have opened whole new markets across the globe.

Airlines should get ready… technology is about to come over the planning transom. We’ve covered the Boom airliner at the last IAFS™ and we’ll be updating it in August.

The disruptive aspect of this airplane is that, based on known and expected economics, it could completely change the fare mix on existing trans-Atlantic airliners.

A traveler who can get to London in 3.25 hours instead of 7, at the same business class fare, isn’t going to be swayed to stay on the 777 just by having a lie-flat bed, a duvet from some designer department store, and an extra champagne toddy before arrival.

This will change how premium class travelers move… and it’s not some pipe dream.

The Boyd Group International Global Fleet & Demand Forecast will be the first to include the effects of supersonic airliners, with an entry-in-service starting in 2024.

Join Aviation Leaders. Register – And Bring Your Board & Colleagues, Too.

If there is only one event you can attend this year, the International Aviation Forecast Summit is the one that delivers solid forecast and trend data you can use. Not only that, but it delivers the perspectives of industry decision-makers, too.

Our repeat attendees will verify that they leave the IAFS™ armed with perspectives and information no other event delivers.

Airport attendees have found that bringing board members to the IAFS™ delivers knowledge and information that goes a long way in keeping them up to date on aviation realities.

So, make plans to join aviation leaders in Las Vegas, August 26-29 for the IAFS. Early registration rates are in effect through March 31.

We look forward to seeing you and exploring the future. So, plan to get disruptive… click here to register.

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Monday, March 20, 2017

Essential Air Service – Time For Facts, Not Fake News 

Time’s up.

For more than a decade, the Essential Air Service program has been rotting into a giant sinkhole of politically-motivated waste.

It is a defendable fact that there are some points of value to the EAS program, but the number of cases where it is a complete waste of money has contaminated the program – as a whole – into one that’s a poster child for federal waste and political stupidity.

EAS has been in need of total re-structuring for years. But nobody has had the courage to do it. So now, all of it is in jeopardy.

Alaska is a different story. But continuing year after politically-corrupted year to fund EAS flights at lower 48 points where it’s not consumer-viable has made EAS a top target for elimination.

Maybe if congress had had any guts to revise the program to accommodate changes in consumer and economic realities, EAS could be saved. But now, places like Pierre, where the program has value, are in the same category as places where EAS is a total scandal.

Enter The Fake News, And EAS Suddenly Is Sacred. As expected, the Trump Administration has proposed to cut the Essential Air Service Program… just like proposals made almost every budget year.

Apparently, since this time it’s Trump doing it, a lot of the media has responded with dire stories of how communities will go into the economic stone age if those two, mostly empty, PC-12s stop landing at the local airport.

Scrap wood is short, too, because it’s being snarfed up by local politicians looking for soapboxes on which to spout stuff about how important EAS is to their community – without a shred of knowledge that at many points, the program is a Third World scandal, carrying mostly sailboat fuel, and connecting nobody in from the rest of the world.

Truth and accurate reporting is not necessary on this subject, at least in several corners of the ethically-corroded Fifth Estate. Due to the gravity of the matter, checking facts isn’t really necessary.

One of the trendy bits of fake news that some in the media are spreading is that if EAS service (typically two flights a day) is ended, the entire airport may need to close.

That, in light of the facts, is blatantly false. There is ample evidence to require reporters to question that contention, one often made by civic leaders.

Funny, but airports such as Modesto, Topeka, Chico, Worland and St. Cloud have lost air service, but somehow, they’ve not yet turned into drag strips.

Message to media types too lazy to find out about the basics of EAS:  loss of EAS hasn’t killed off a single airport. But, that would be truthful and professional reporting… something that’s in short supply in much of the media.

One particularly amateur article came out with the dishonest headline that the Trump proposal threatens to close small airports in Mississippi and Alabama. The research-free people who write this drivel don’t bother to get any facts before they put this stuff out. They think that airports are there only for scheduled flights. They mislead the public into the false belief that airports are for airlines, only. Bothering to question semi-panicked Chicken-Little politicians is a concept beyond their ability.

And they sure don’t know that closing any airport that’s accepted as much as a ham sandwich from the FAA is a legal exercise that takes years.

This showcases the reason for the term “fake news.”  With the EAS stories, we’re awash in it.

Bring EAS into The 21str Century. Or Dump It. Here’s a hard fact. In most cases in the lower 48, EAS is a giant vapor hole. In most cases, it just perpetuates flights that consumers simply can’t or won’t use. It is completely counter to the real needs of rural America – connectivity, not placebo flights that run mostly empty.

Defending these applications of EAS contaminates the support for places that actually have need and can support subsidized air service.

EAS in the lower 48 can be re-structured to provide air access to points where it might have some economic value. But it would mean that much of the current system would need to get tossed. Politicians don’t have the guts to do this.

So, a red pencil for the whole lower 48 program is the only solution, apparently.

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March 13, 2017

First Off This Week…

Breaking! Silver drops all Cuba Service. Frontier drops MIA-HAV. As was forecasted by Boyd Group International, the supposed “pent-up demand” for Cuba service touted by the US travel industry is continuing to come up more vapor than reality. And it’s not due to travel restrictions alone… the fact is that Cuba cannot support substantial inbound traffic, and due to an economic system that has kept the nation in the backwoods of the global economy, there isn’t any local business base.

As we noted in our 2017 Aviation Predictions, more cutbacks are coming.

Congratulations to Spokane in adding American service to DFW to their route map! BGI is honored to have assisted in the process.

More on Bozeman… Year 2016 was a traffic record, and 2017 is shaping up the same way with upgrades to the AA/DFW service and more coming in the next few months.

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Media: There’s A Reason Your Credibility Is In The Ceramic Fixture: Dig all the politically-correct and trendy stories declaring that the proposed 120-day travel ban from six terrorist-infested countries in the Middle East is completely torpedoing US international traffic.

Yes, and to prove it, they have interviews with travel agents, too.

Let’s get real here – one story reported “New Trump Travel Ban Is Crushing Newark International Traffic.” It noted that total international traffic at EWR is down 7% and then goes on to lie without any analysis that it’s due to the proposed ban.

If you believe that, call your real estate agent in Park Slope – that bridge is for sale again.

Right… and Elvis is sitting in Yemen right now waiting to board a flight.

Think about it – cutting arrivals from just six places that generate nearly zip traffic is now, according to the media, starting to “crush” all international traffic. One really has to be gullible to believe that stuff.

And the media is aghast that the public doesn’t trust them.

Again, this week, we leave the Touch ‘N Go on the sidebar.

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“ATC Reform”…

As It Stands, It’s A Bronx Cheer At The Flying Public

How ‘Bout “ATC Results” Instead

Nature abhors a vacuum, supposedly. When one exists, all sorts of stuff will rush in.

That’s exactly what the situation is with this Washington buzz term “ATC Reform.” It’s talk, but It’s tough to find any – any – hard definitions of what it means, or what the specific goals are.

Here’s a hard fact, one that BGI has been illuminating for the last 23 years – upgrading air traffic control must be founded on the following:

A clear forecast of what the needs of the air transportation system will be over the next 10. 20, 30, 40 years, based on professional futurist analysis of the evolving nature of that system…
A clear projection of the approaches and technologies needed to meet those evolving needs…
A clear and defined program to accomplish the above…
Complete accountability for results…
None of these are in place today – nor have they been in the last 30 years. Worse, the trendy calls for “ATC Reform” actually whitewash the FAA flub-a-dub ATC failures.  If the FAA’s ATC programs were a public company, they’d be sued for fraud.

But the official Washington message is, “See, it’s not the FAA’s fault, and (every knee will bend at its mention) NextGen – the sacred, and mysterious Solution To All isn’t the problem… it’s just that the system must be reformed.”

This whole “reform” nomenclature is geared to making sure that the hard facts illuminated in repeated GAO and DOT IG reports are ignored. We don’t want to embarrass the high-powered klutzes who’ve stumbled over the last three decades.

It gets worse. A few weeks ago, the FAA Administrator reportedly claimed that the ATC’s NextGen program was 29 months ahead of schedule. If this report is accurate, the FAA has a major credibility problem. And a really severe management problem, too.

Yet there was not one peep – not so much as a raised eyebrow – when this tidbit of creative, change-the-schedule-on-the-fly nonsense was stated.

Remember, this was the head guy at the FAA – you know, the agency that oversees aviation safety. This clearly shows that the FAA can’t do the ATC job.

Bottom line: The ATC system not only needs to be properly privatized, but – here’s the kicker – the failures, stumbles and  the NextGen mess need to be recognized and acknowledged as part of the program.

That has yet to be a part of any privatization proposal… so for now, plan on not much changing.

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March 6, 2017

First Off This Week…

Up-Gauge of Service… Congratulations to client Bozeman! The new AA service to DFW has proven so strong that the carrier is upgrading flights from CRJ-900s to mainline A-319s. We suspect there will be more news from Bozeman in the coming months.

On The International Front… Also, congratulations to Las Vegas McCarran International Airport on a 5.5% year-over-year jump in international traffic – over 267,000 passengers.

At BGI, we and our partners at China Ni Hao, LLC are proud to have helped, with the implementation of America’s first fully-functional China-Welcome™ program that has helped make the new Hainan Airlines service from Beijing shine as an example for other US gateways.

Congratulations To American Airlines… on the 32nd annual Celebrity Ski Challenge benefitting cystic fibrosis. Held this week-end at Beaver Creek, Colorado, the event again  raised enormous amounts of money to fund research for this tragic disease.

In point of fact, this AA event has been a major part of the research funding that has actually resulted in breakthrough treatments for CF.

Anybody wearing an American uniform should be quite proud of their company.

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Connectivity – Finally Emerging As The Key Metric

Mark this down: the US economy is not dependent on air service, per se.

Instead, it is dependent on air access – connectivity – from the rest of the world. That, by the way, is not the same as local air service.

From small communities to major Washington travel and trade organizations, this has been the bedrock concept that Boyd Group international has impressed on its clients.

And we are happy that finally, working with a range of clients, the concept is finally being recognized.

Getting Here From London Is The Metric

Connectivity must not be confused with “local small community air service” – a term that in many cases is an oxy-moron. Connectivity is not the same as local air service. The vast majority of EAS-supported service, delivering placebo flights that consumers can’t use, proves that point.

The parochial chase merely after local “flights” has not and will not serve to prepare regions for the future. Connectivity from the globe – the logistical channels  bringing goods, trade and ideas into and out of all parts of America – must be, and in fact can only be, the developmental goal for all regions of the US.

The challenge is to not let the term “connectivity” be politically-hijacked into the futile efforts to put scheduled air service at every rural local airport. Indeed, it is necessary to illuminate this reality  boldly and forthrightly – and the consumer makes that determination, not politicians armed with conveniently-concocted consultant advocacy studies.

Unfortunately, this truth, this unshakable fact of economic reality, is not one that many politicians and civic leaders want to recognize. The facts are clear: connectivity is and will increasingly be multi-modal. That means use of ground access to airport gateways that can support air service that is consumer-valuable.

The main metric is not “local flights” but the levels of convenience consumers face in connecting to and from the rest of the world.

In many cases, that superior connectivity and time-efficiency cannot be delivered from the local airport at small communities, even when the alternative may be a 60, 90 or even 2-hour drive to a larger city that can support service levels that give the consumer more options.

It is unfortunate that many small communities get mislead by “studies” that purport to represent that two or three limited-connectivity, single-brand (or no-brand)  flights at the local airport can consumer-compete with a larger airport two hours away that supports 80 daily, multi-option departures.

This been proven to be a fallacy across the nation. At Muskegon, at St. Cloud, at Topeka, at Modesto, and more. These communities have excellent air connectivity – it’s just at more distant airports, and the fact is that they simply don’t have the population base to support local service that’s competitive with consumer options at other points.

The airline industry has changed, and the economics and consumer demands in regard to air travel have also changed. Permanently.

This is the reason that the concept of “connectivity” must not be politically-hijacked into being considered the same as “local scheduled service.” The physical equipment structure of the airlines industry, and consumer trends  rule it out.

More Fleet Changes Are Proving The Point. In the past week, another event took place in the airline industry that underscores changes in connectivity channels in the US.

One of the corroded foundations of most ASD programs is that they assume that airlines will eagerly adjust to the compelling numbers that can be ginned up in a “true market study” or a leakage analysis, or some ARC data – when in reality it’s the capability and structure of the airline’s resources that are the real determinant.

Point: connectivity depends on airline economics. What virtually all traditional ASD “studies” ignore is that changes in airline fleets are a critical determinant of where airlines can and can’t operate.

Last week, there was another fleet shift that gives further direction regarding  the market strategies of two of the four US full network airlines.

Air Wisconsin will cease supplying lift to American and will shift to a capacity agreement with United. Not much noticed, but it is a big deal.

This means that there will be 69 fewer CRJ-200s in the AA fleet, signaling a continued move out of 50-seat jets. The upshot of this will be future (and not too distant future) decisions regarding markets where Dash-8 turboprops are still in American-branded operations.

For United, they will need to find mission applications for these aircraft, and not all may be net-increases to the UAX fleet. There may be off-setting changes at other lift providers.

Imperative: Planning Beyond Yesterday’s Assumptions. One of the Future Aviation Trends that will be explored at the International Aviation Forecast Summit this August will be the future changes in how airlines value and apply their assets. One of the emerging challenges will be highest and best financial return from airline hub assets. That I turn will affect connectivity for airports.

What most ASD programs tacitly assume is that there is no limit to things like gates, ramp space, and airway capacity. Unfortunately, it’s not a matter of the more passengers the merrier – it’s the value of the passenger.

Adding three flights from a small community might sound great, but what most of these ASD schemes don’t factor in is that fact that the net-new traffic may just spill off more lucrative passengers in connecting banks that are already at 90% load factors.

Hub-choke will be an increasing consideration in how the four major network carriers structure how, where, and what they fly. Point: watch for future pressure on airline systems to focus on most financial return from use of airport facilities.

These dynamics and operational realities are key part of what will shape connectivity in the future – an no amount of intellectual gymnastics or wishful thinking will alter this.

For some genuinely advanced futurist planning perspectives, we’d strongly suggest you join industry leaders this August 26-29 at the 22nt Annual International Aviation Forecast Summit in Las Vegas.

The Summit is concentrated on exploring trends across the aviation spectrum – how they will shape airport, airline, financial and tactical planning in the future. For more, click here and reserve your space today at the early registration rate.

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February 27, 2017

First Off This Week…

Congratulations to Springfield-Branson National Airport (SGF) in recruiting new United service to Houston Intercontinental! Boyd Group International is honored to have worked the SGF in exploring the potential for this market. Springfield experienced record traffic in 2016, and it appears this year will do the same.

If your community is looking for results in future air access planning – not just more “market studies” – give us a call.

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An Ancient Commercial Failure Isn’t A Good Role-Model

Yikes! NASA  Announces the “New Concorde”

This week, NASA announced that it had wind-tunnel  tested a design for a new supersonic airliner. The model was under a meter long.

NASA is excited. But, according to media reports, they’re calling it the “New Concorde.”

Somebody on Madison Avenue, please give these people a call. This is about as market-savvy as Ford Motor Company announcing the New Edsel.

But despite the moniker,  the concept of new-technology supersonic passenger flight is now valid, although NASA may be a bit behind the curve.

The Concorde Is Just Old-Tech History. In our work in forecasting this future sector, we’re constantly coming across alleged aviation Gurus, spouting some irrelevant pap about the original Concorde, “proving” that the whole concept of future supersonic travel is a pipe dream.

Here’s some reality for the kibitzers in the aviation peanut gallery, who babble about how the Concorde proved supersonic flight can’t be economic.  As it pertains to the future, there is no history of supersonic flight.  The Concorde was a product of the age when the transistor was just starting to compete with vacuum tubes. Today, from a technological perspective, Concorde is the King Tut of airliners.

Nearing Senior Citizen Status. Here’s a fact: the Concorde is close to celebrating the 50th anniversary of its roll-out. And, the main achievement of Concorde (the Brits don’t use “the”) is that it is a prominent chapter in a book listing the world’s greatest planning disasters. The entire market role for this machine (a 100-seater to replace 707s) was bogus from the start. The program’s cost turned out to be several galaxies away from the original estimates.

But what the snipers in the aviation weeds don’t mention is that was then. This is now. The Concorde today is about as relevant to the future as comparing a new flat screen TV to a 1967 21-inch console color (WOW! color) TV.

Like its contemporary brother, the Concorde, it was the latest in now-ancient technology.

Supersonic Passenger Travel Is In The Works. While NASA is elated with wind-tunnel testing of a small model airplane, Boom Technologies of Colorado already has a one-third scale of their planned 45-seat business-class SST. The program is real and the concept will change how airlines operate and define revenue streams.

Boom Technologies also has commitments for the first ten from Richard Branson, somebody who did not just fall off a turnip truck.

Today, supersonic travel isn’t a pipe dream – it’s a viable concept from engineers and non-dreamers.

Our forecast is that this aircraft – which, by the way, does have an engine, and does have very credible projections regarding operating economics – will have a global market of over 1,300 units. Furthermore, the aircraft itself will inflict major changes in how international carriers operate in their future fleet strategies. The front cabin on that 777 may be eclipsed.

Join Us For More Heresy. We will be exploring this new and disruptive change in global fleets at the 22nd International Aviation Forecast Summit, August 26 – 29 in Las Vegas.

The IAFS™ is different in that we outline the future shifts in aviation, and we discuss and dissect them with aviation decision-makers from all areas of the industry. No boring panels. Not scripted presentations from Washington. Just hard perspectives on the future.

And, as demonstrated by this one subject – supersonic air travel – the changes coming will affect airports, airlines, suppliers and financial institutions. And each of these sectors get perspectives that address their future planning.

So, even if NASA needs some guidance in regard to market positioning, they are on the right track. They may be lagging what’s going on in the private sector, but new fleets is one of the futurist threads we’ll be pursuing in Las Vegas.

To reserve your space and for more information on the IAFS, Click Here.

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February 20, 2017

First Off This Week…

Congratulations To St. Vincent & The Grenadines!

Argyle International Airport Is Now Open!

– A New Model For Infrastructure Development

It’s a nation of just 105,000 people – Toledo, Ohio is more than twice that size. But this small nation has just set a new model for building much-needed infrastructure in developing nations.

It was also an economic imperative. The lack of an intercontinental airport put this nation of 32 islands behind the curve in attracting tourism and economic investment.

From scratch, it meant tearing down mountains, levelling valleys, and constructing a state-of-the-art terminal and a 2,740 meter (9,000 ft.) runway. Even a time-consuming project to preserve some ancient petroglyphs discovered in the earth moving was part of what airport planners faced.

A daunting project. But Argyle International Airport is a reality.

Aircraft from Toronto, New York and from within the region set down on February 14 for the operational opening of the world’s newest airport.

A New Model For Infrastructure Planning. The nation of St. Vincent & The Grenadines set a new model for infrastructure expansion. As a small nation, it had limited resources. So it built a coalition of countries – from Taiwan to Venezuela – to participate in the project. They even had assistance from Argentina and Egypt in regard to preserving the petroglyphs.

At Boyd Group International, we are proud to have worked with St. Vincent & The Grenadines in areas from market planning to developing budgets and financial projections. And, we’ll be continuing to work with this innovative nation in facilitating additional air access in the future.

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Trend: London To Be Next “Core” Hub
For Large US Non-Hubsite Airports…

… & Whole Regions, Too

One of the dynamics we’ve seen over the last three years is the opening new long-haul markets made possible by new generation airliners, particularly the 787.

United, as one prime example, has been able to access feed for its SFO hub from second-tier cities in China, using 787-8 and -9 aircraft.

The Invasion Is Coming. Now, that same dynamic will be coming to America. Over the next 36-60 months, large US non-hubsite airports will increasingly be in the cross-hairs of EU carriers looking for additional feed for their connecting hubs in the EU and the UK.

At BGI we outlined this trend four years ago. Since that time, we’ve seen British Airways add Austin and New Orleans to their route map, with more in the pipeline.

Whole New International Travel Patterns: So Tune Up The Chevy. At the International Aviation Forecast Summit, August 26-29 in Las Vegas, we’ll be covering the factors that carriers such as BA, as well as US members of alliances look at when considering a US spoke city to feed traffic to hub across the Pond.

These are a whole lot more than just population and local demographics. They involve factors pertinent to the logistics of the global economy. Traditional ASD forecasting methodologies, miss these entirely.

Speed. And It’s Not Always Using The Local Airport. A key factor in the global economy is speed of communication. That includes the communication modality of air service, based on total travel time. In many cases, the entry of nonstop access to a UK or EU hub will change international travel patterns in entire regions. Domestic won’t be affected, but when going international, the time and convenience factors will shift.

Hint: A two hour drive to New Orleans to take the BA nonstop to Heathrow is likely more time-efficient than the local airport to utilize a connecting flight through ATL or DFW or IAD.

Smaller Airports: The Key Is Harmonization With The New Dynamic. In effect, the de facto international gateway for many smaller communities will be at these larger points – such as New Orleans, Indianapolis, Memphis, and Columbus.

This will have a shadow effect on regional airport traffic – one that communities need to prepare for, and develop strategies to make this new and somewhat distant international service compatible with their air access planning.

Point: the time-efficiency of the automobile will be a factor in where consumers chose to start an international journey.

Join Us For A Grasp of The Air Service Future. This, along with other dynamics we’ll be covering at the Summit, will be a core factor in the changes in international travel patterns and modality in regions across the US, but particularly in the industrial Midwest.

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

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February 13, 2017

The Future of ATC:

Time For Some Facts… Instead of FAA & Media Lore

As BGI has done for the past 22 years, we’re going to talk heresy about the air traffic control system.

Yes, we know that “everybody” is supporting the FAA’s program – one that’s been in a mud-wallow for 20 years, and has been re-monikered as “NextGen. All the media and Washington cognoscenti supports the new, satellite-based NextGen. It’s the future, see?

Despite the fact is has a rap sheet of failure longer than I-95.

Another Presidential Meeting… Will This Time Be Different? Last week, airline executives met with President Trump. The ATC system was a key subject.

Today, the outdated air traffic control system is a major cost factor for the air transportation system… without question, it is a stealth barrier to air service in the US.

So the outcome of this meeting will be important to airports across the country.

The grand upshots of the meeting, at least so far: Yup the system is obsolete. Yup, it needs to be fixed.

So Far, So Good. This was the same stuff that came out of photo-op meetings during both the Clinton and the Bush administrations. When the cameras stopped rolling, it was back to business as usual at the FAA.

What was not clear this time was whether anybody in the room clearly understands how the air traffic control system got into this mess.

What is apparently clear, however, is that at least now there is a President who understands business, and understands and can recognize management incompetence. The program is the varsity team of performance failure. And excuses.

We can hope.

Attention Media… Okay. Time To Pop The NextGen Bubble.

Please do the flying public a favor and get some background before filing the story on the glowing wonders of NextGen.

Here are some factoids regarding the ATC system that folks in aviation need to understand.  

No, The Skies Are Not Increasingly Crowded. The assumption is that the workload is going up at the FAA. Not so.

Here’s another fact that gets lost in the expensive PR put out by the FAA. In 2016, there were 1.52 million fewer flights in the sky than in 2007. That’s almost 16% down.

So, despite all the money spent, as well as a huge reduction in the number of airliners hurled across the sky, NextGen hasn’t delivered results.

Even With Fewer Flights, There Hasn’t Been Real Progress. To be sure, some equipment has been replaced. Some new procedures have been implemented.  But here’s a fact that swooning network correspondents may want to consider… the rate of “on schedule” arrivals today is no better than it was in 2008.

DOT IG And GAO Studies Tell A Different Story. Repeated documents from these offices reveal that the NextGen program has poor leadership, unclear goals, and does not represent a sysem that’s transformative compared to that of today.

No, It’s Not A Funding Problem. It could be at some point, but the reasons that NextGen is so devoid of results and a champion of missing deadlines is due to management indirection, according to the GAO. Folks spouting that it’s only a matter of funding don’t know what they are talking about.

Privatization Isn’t The Silver Bullet. The core of the calls for “privatization” are based on the false assumption that freedom from the cloak of government will unleash the wonders of NextGen. It might. But not if the same senior management now in place are retained.

Satellite v Radar Based. This is a comment tossed out to the media, who jump at it like trained seals going for a dead fish. Somehow, this calms the reporters into believing that this is the core part of the solution. It’s not. It’s the communication link. Not the management system.

No, NextGen Isn’t “The” Answer. When repeated GAO reports tell us that it’s a management and planning problem, why would any reporter do a sunshine walk-and-talk B-roll with the FAA Administrator, instead of getting more than pap to report? And how come so many people are still bamboozled into thinking that NextGen and ATC modernization are the same thing?

The truth is that NextGen is a program that the FAA has monkeyed with for the last 20 years, and has been proven to be one that’s mismanaged, and as mentioned above, isn’t “Next” anything.

NextGen is a scandal… but one that has immunity from any hard scrutiny. The group-think in the Washington Alphabet groups needs to be brought into reality.

Maybe this will change under Trump. A clear indication will be the actions of the new Secretary of Transportation. She needs to enter the building with a clear plan, not an “open mind.”

This situation needs immediate action, not discussion.

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February 6, 2017

Let’s Talk International This Week

As our Airports:USA® forecasts have indicated, internationally-generated travel, direct and indirect,  accounts for over 30% of US airport enplanements. And it is growing.

Every region of the United States is dependent on the global economy, and the #1 regional objective should be enhancing access from the rest of the globe.

Today, we’re going to cover a couple of emerging issues that will affect airport strategic business planning.

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The IAFS – Get Ready To Do A Captain Kirk

We can’t talk about international without bringing up the #1 annual aviation event – the International Aviation Forecast Summit.

Every year, we go where no other conference dares to go.

When we use the term “international” it’s not just about aviation trends outside of the US. That’s because the US is part of the global economy.

That means communities such as Mobile, Charleston, Saginaw, Golden Triangle, MS, just for starters are part of the international aviation picture. Even places like Kerrville, in the beautiful Texas hill country, is now a part of the global economy, with an Asian owner resuscitating Mooney Aircraft.

And the international aviation economy isn’t like our host, Las Vegas, where what happens there, stays there. What happens in Frankfurt and Sao Paulo and Guangzhou doesn’t stay there – it can reverberate across the American aviation economy.

This year, the IAFS™ will be looking at the following trends, among others. The format is one where we discuss these threads individually with aviation leaders from all industry corners.

Issue: A Consolidated Air Transportation System – the US air transportation system will continue to shrink in “reach” with other modalities taking up most of the vacuum. Longer ground access modalities to air gateways  are just one factor. In many cases other forms of communication will fill in for air access – yes there are places where air service at the local airport won’t work..

Issue: New Fleets. The fleets of 50-seat jets are continuing to be retired. In markets where they are replaced by larger aircraft the trend has generally been to generate more traffic volume. But they are not one for one replacements… which will again lead to more regionalization of air access.

Issue: Airport Strategic Planning. There’s a whole lot more to airports than just air service. Airports will need to accelerate long-term economic growth planning – and in the global economy, that means looking international as well as local for investment.

Issue: The Emerging Parallel Airline Industry. The model used by Frontier, Spirit and increasingly, Allegiant have essentially created a new utilization of airliners. Instead of flying to meet market demand, the application is to offer air transportation as a new alternative to other modes of discretionary spending. How AA, UA and DL will respond to this will affect yields, traffic levels, and – watch, earnings.

At the IAFS, we’ll be getting the perspectives of individual airline CEOs and senior executives on these and a lot more trends facing all areas of the industry.

Real Data. Real Forecasts. Our repeat attendees at the IAFS™ will support our contention that if you can attend just one industry event this year the Summit should be your choice. Issues such as these are not addressed within the usual politically-correct manner… we take them apart and explore how – and if – they work.

So clear your calendar for August 26-29, and join industry leaders from around the globe at the Wynn Las Vegas. Early registration is now in process.

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China Airports: Heading For A Billion Passengers.

And It Will Affect Heartland America.

We are now in the process of revising our Airports:China™ data for 2016, and generating a forecast for China-US traffic demand in 2017.

Official CAAC data will not be published for the next several weeks, but our analyses indicate that between 2014 and 2016, airport volume was up nearly 20%. There is a message here for futurist planners at US airports and communities.

The logical question is, simply how does airport growth in China affect any US airport?

The answer is that China-US travel will be the single strongest new set of traffic flows into American in the next five years, and many of these airports in the Middle Kingdom will be supporting additional air access to points across the US.

Our forecasts indicate at least half a dozen additional Chinese cities can and will be able to support nonstops to the US in the next 36-48 months.

Just looking at the top 10 Chinese airports for 2016 – there are several take-aways that are important to airport strategic planning in the US – from large hubs on down to regional gateways. The growth is phenomenal in many cases… Kunming, for example has exploded over 25% since 2014.

Getting Toward The Billion Mark. First, our data indicate that China’s airports will handle between 988 and 996 million passengers in 2016.  As with US airport data, these are basically enplanements and include connecting traffic. However, the current structure of the Chinese air transportation network is very highly focused on point-to-point travel.

That’s the nature the demand base in China – the population centroids are so large, there is strong demand that doesn’t require the level of traffic aggregation that is seen at the majority of US markets. It also contributes to high levels of airside congestion.

Volume. Volume. And More Volume. Indeed, Beijing alone has approximately the same passenger volume as ATL and LAX combined – 92 million, and again a much higher percentage at PEK is local traffic.  From there, the next six Chinese airports handle more passengers than any US facility.

Capacity – Not Just Airports, But Seats. The Airports:China™ data indicate that the top 50 Chinese airports – which account for 92% of all traffic – had an average of an 86% load factor in 2016.  Indication: plenty of demand for more seats and more aircraft… particularly to the US and the EU.

Year 2017 is unclear, with the expansion of several Chinese airlines into international markets coming into play, particularly at Tier Two airports.

Boyd Group International, in its consulting work assisting airports and communities in competitively preparing to attract service from emerging international Chinese airlines, has identified at least half a dozen potential new nonstop-US destinations in China. The good news is that they’re are all in the Second Tier category, which makes route approvals much less of a barrier compared to PEK, PVG and CAN.

Don’t Get Sidetracked By Political Posturing. Sorting through the new trans-Pacific political rhetoric, the fact is that the economies of both the US and China are now joined at the hip. They need our markets, and we need their goods. That won’t change. Nor will the enormous demand generated in China to visit the USA.

China respects strength. What is being developed, despite the political dancing, is a new framework for the US-China relationship.

Plan For More Chinese Carriers Landing In The USA. As was forecast at the first China-US Aviation Opportunities Symposium in 2015, more the 50% of all traffic between the US and China is now on B-registered carriers.

Plus, there are at least six more domestic Chinese carriers that are planning on international growth. And the A-330s on order won’t be just for tourists to Taipei, either. The US is the prime market, and the emerging trend is for Chinese visitors to air-connect from the gateway to interior US cities.

Chinese Visitors & Business Will Be Headed For The Interior. These carriers will be accomplishing more code-sharing agreements with US airlines, both within and outside of alliance partners. This means more access to secondary US points.

As just one example, our forecasts indicate that the code-share between Alaska and Hainan will feed as many as 400 additional Chinese visitors to Spokane.

Not a lot of people, but a whole lot of economic impact for the Spokane-Coeur d’Alene region  – the average Chinese “spend” on a US trip is over $8,000. If they stay in the region just three days – which is likely – that’s a direct spend of nearly half a million dollars to the local economy.

The Traffic’s A Jump Ball. Needless to say, it will be the airports and communities that prepare and have surgical outreach to the China market.

BGI and its partner China NiHao, LLC are working with a number of clients to craft China-Welcome™ programs tailored to their specific situation.

Chinese Don’t Cotton To Amateur Acts. A boiler-plate-appearance airport website (and that’s what seems to be the new trend) with a mechanically-generated Chinese language button is a superb way to tell the prospective Chinese visitor that the community doesn’t care. That’s because these translations tend to be amateur, and unfocused.

Indeed, one of our partners at China NiHao is the #1 generator of Chinese tours to the US, and this – a mechanically, or heaven forbid, a Yahoo Chinese-translated website – is a red flag when planning itineraries to points across America.

Putting In Context.  This is not hypothetical. It is not a passing phase. There will be over 4 million Chinese coming to visit America in 2017, and it’s all of America they will be seeking to see.

Not only is attracting Chinese leisure traffic important, but communities and their airports that prepare will have the competitive edge in attracting burgeoning Chinese business investment.

For more information on how your region and airport can get a higher profile for this traffic, check out the China NiHao site for more information.

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Finally, Cuba. Again In Aviation News

A Trump Policy Change Might Represent  A Temporary Relief

There’s concern that the Trump Administration may be looking at altering the US-Cuba policy inherited from the prior administration, including, probably, air access agreements.

As Boyd Group International has pointed out – within the vacuum of intelligent media reporting on the subject – the travel bonanza between the US and Cuba is years away.  Years, even if the current regime goes out of business right now.

While it’s not politically correct to state the truth about the island nation, the fact is that the place is still a worker’s paradise of a trashed economy, near zero business base, and even less attention to free speech.

This doesn’t mean that Cuba route authority isn’t valuable for the future. But the babble from the travel industry about “pent up demand” is nonsense. One word: infrastructure.

Once Again: A Reality Check. Truly amazing in their breath of non-information on the subject are the airhead articles on the huge flow of American products that will be on the way to Cuba as soon as the US embargo is lifted.

Really? If Cuba can’t afford to buy much from Korea, Canada, China, France and the UK, what leads anybody who’s awake and sober to think that they’ll suddenly have the money to by US goods?

Point: Cuba is not yet travel-ripe.

In fact, by the third quarter of this year, plan on a lot of the awarded capacity to be in line for cutbacks.

To be clear, it’s important for US carriers to be in place for when Cuba shifts into an economic system the generates economic growth, a fee economy, and can generate traffic from both directions.

But in the meantime, we’ll say it again. If an airline planner suggested a domestic route with the characteristics of places like Santiago, Holguin and Santa Clara, his or her next career move would be out the front door.

So, maybe a Trump slowdown of the air service process might be a blessing in disguise for some US carriers.

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January 30, 2017

Air Service Access…

It’s A Whole Lot More Than A 737 At The Gate

At BGI, we have been pointing out that a lot of the avenues pursued in traditional “air service development” approaches are not only obsolete, but they are founded on airline and air transportation systems that don’t exist.

The point is this. Today, we have a very defined and very clear air transportation system. The players that may be interested – or not interested – in a given market are not a mystery. But much of the ASD programs are based on the belief that there are unnamed airlines that can bring service to a community, if only the right data is developed.

Furthermore, they assume that “scheduled flights” are the same as “air service.” They are not, unless they provide air access to and from the rest of the air transportation system. As we’ve noted before, a couple of flights on a Cessna 208 to Nashville, operated by an independent operator isn’t access. It’s usually an effort to carry mostly sailboat fuel.

At the 21st Annual International Aviation Forecast Summit last September, we held a Workshop on Patton-like Air Access Planning.

The point was the same as the General’s: make plans to fit the circumstances, instead of trying to ignore circumstances. In war and in air access planning, to do otherwise won’t lead to success.

We’ve just witnessed the fallout from one such attempt.

Emotional Planning = Expensive Outcomes. According to press reports, Newport News International Airport just got hooked to pay off a $4.5 million defaulted loan from the defunct PeoplExpress fiasco.

That’s $4.5 million bucks. All for a couple of weeks of sloppy service to places without much traffic demand, on a leased-in operator that had the reliability of a ’54 Nash.

The shame is that Ray Charles could have seen this coming.

The airport’s guarantee for the loan was made in spite of the fact that the “airline” was reportedly in arrears to the IRS, and had several other financial issues in progress at the time. Apparently the term “due diligence” wasn’t in the vocabulary.

Not only did this PeoplExpress entity itself send up enough red flags to decorate Moscow on Mayday, but the realities of the air transportation system doomed the proposed route system from the start.

The real circumstances were clouded by the promise of “low fare service” – particularly from some entity named as a successor to an “iconic” (according to media stories) prior airline. This  obviously clouded any hard look at whether this scheme had a snowball’s chance in Tahiti of success.

It’s entirely likely that any potential concessionaire or FBO seeking to do business at PHF would have been given more scrutiny than this PeoplExpress scheme.

Keeping Airports In The ASD Dark. But it’s not always entirely the airport’s fault. Some just get bad advice. One of the keys to a lot of “air service development” programs today apparently is to make sure the airport is kept as far away as possible from airline industry and air transportation realities.

Because with full understanding of how airlines are structured today, many airports would be taking different paths to business planning.

Newport News isn’t alone. They just paid a lot more for the vapor promise than most places do. It appears that some communities simply lose direction when it comes to air service. And unfortunately, they are too often given advice that rarely covers the downsides and the financial risks

It’s fairly common. Recently, we’ve seen some small, un-served airports getting led way into the weeds, with promises of “studies” to find all that new demand that will bring flights to the local airport. And, often, there is the hint that, lo!, there are “airlines interested” – only “we can’t reveal their identity, yet.” Sure.

And whatever operator that might actually be there – which is usually unlikely – is in almost all cases non-connective to the rest of the air transportation system. Then there’s the line about making “business cases” for airlines, but somehow not getting too deep into whether the airline (which is often not ever identified) has a business strategy that has any potential relationship with the community.

That’s the typical financial quicksand that’s dumped on unsuspecting communities and small airports. Never is there an initial and blunt discussion of airline strategies, fleets, or route system compatibility.

No, sir. That might torpedo the whole project, and send the airport into other business strategies for the future.

And that’s the problem with a lot of ASD programs. Too many small communities are not first given an honest and forthright knowledge of the emerging trends in air transportation – before the glowing “study” is completed, and which always comes up with a rosy answer.

Then, of course, the recommendation will be to go to a “speed date” event to “find more airlines.”

Airlines, that truth be known, don’t exist in regard to any potential of flying to small, un-served or barely-served airports.

Beyond Hubris, The Consumer Aspect Is Typically Ignored. Usually, a hard analysis of alternative consumer options isn’t in the program, either. Beyond silly “surveys” asking if they’d use the local airport, there is usually no study of whether the proposed local service is consumer-competitive with existing air service channels.

In other words, many traditional ASD approaches tend to be the equivalent of taking a blindfolded whack at a Pinata that doesn’t exist.

This ethically-questionable nonsense tends to permeate whole sections of the foundation of traditional “air service development.” Instead of blunt business knowledge, there is the distant promise of “getting that service we need,” supported by massive reports and mushy analyses that intentionally relate not at all to air transportation realities.

Due Dilligence. A Little Can Go A Long Way. Outlining all the realities can be a real project-killer, so it seems to be important not to reveal all the facts up front.  Make the opportunity look real exciting, even if it’s a dead end. A little ego-puffing seems to be okay.

Heck, we’ve even found consultants that can’t even tell their address without puffing the truth. One listed a fancy street address, indicating a several-floors-up suite. Turns out, it’s the address of the local post office, and the “office suite” is just a PO box.  Interesting.

There Are Better Approaches. At Boyd Group International, we have had strong successes in enhancing our clients’ air access from the rest of the globe. But we’ve also not shied away from telling clients what won’t work. Telling a client “no” is part of the business.

We also turn down any project that isn’t consistent with future airline economic trends, and we always keep our clients aware of how airline strategies – not community “need” –  are the first foundation in these endeavors.

We covered this at the Air Access Workshop at the 21st International Aviation Forecast Summit last September in Reno/Tahoe. We’ll be updating it at the 22nd IAFS™ this August in Las Vegas.

Airport planning goes way beyond just scheduled air service. For a wider view of the future, give us a call, or click here for more information on how we help our clients avoid financial mistakes.

Particularly the $4.5 million variety.

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January 23, 2017

To Start:

Our China-Welcome Program Brings Global Focus On McCarran

On the heels of being named one of the 8 most important airport amenities of 2016, Las Vegas McCarran International’s China-Welcome program is now being showcased as a model for airports across the globe.

The latest is an in-depth review by Turkish National Television.

BGI and its partner, China Ni Hao, LLC have developed tailored China-Welcome programs for airports, communities and venues such as winter resorts, seeking to capture more of the growing Chinese leisure travel. Despite much of the hoopla regarding China-US relations, these visitors are still coming, and it’s a jump ball regarding where they will visit in the US.

Check out the home page for more information on this latest coverage of LAS, and for more information on China Ni Hao’s programs, click here.

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Fixing, Not Feeding, Obsolete Programs

Essential Air Service & Small Community Air Service Grants

They’re Political Footballs, Not Community Programs

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.

That’s it, because the local O&D isn’t enough to support nonstops 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 study revenue.

The same is with the application of EAS and SCASD dollars – it is the responsibility of the DOT to assure 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.

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.

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January 9, 2017

To Start:
Overview of Trends For 2017

We look at several emerging aspects & trends.

Traffic growth, but also traffic redistribution. A new airline “parallel universe.” Potential confusion between airport infrastructure and air service. Reality Collides With ASD Programs. The New DOT Secretary. And more.

Click here for details.

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Drone-Airliner Mid-Air Event? – Maybe. Maybe Not.

The Maybe Is Good Enough To Send A Message

It was reported last week that a 737-700 on approach to a remote airport in Mozambique collided with a drone, doing damage to the aircraft’s radome.

The message is a wake-up call to aviation planning. New technologies are important – but must have corollary systems in place to assure they are used properly.

In this latest incident, while there are allegations that this could have been from other causes – such as being a story to cover up damage done by ground equipment after arrival – the message is still there: unless there are major advances in the ability to track drones and the operators, in the event of one major tragedy they may eventually be prohibited.

Take that to the bank: one accident or terrorist act with a drone, and all of the potential benefits of this new logistics channel shifts into good-bye gear.

Drone technology will be a whole new dynamic in communication. But until the use – and the user – of these machines can be safely determined, they represent a major opportunity for disaster – not to mention intentional misuse. These are flying machines the use of which must be controlled.

Saccharine actions from the FAA, which have done nothing much more than require that some of these devices be registered, are laughable, particularly in light of how they can be misused unless more tracking technology can be developed..

One Event, And you Can Park Them All. As the attendees at the 20th International Aviation Forecast Summit were advised at a special UAS Workshop, the drone industry itself has been working hard to address these issues. We also were briefed on the enormous future applications of this technology.

But all it’s going to take is one nasty event, and Realtors can plan on going back to surface photos, and Amazon can forget about any thought of drone delivery. The agriculture industry will forgo the enormous value of drones in several applications.

And the enormous value of drones in airport applications, such as more cost-effective ALP development, are out the door.

Point: one of the top priorities of the new DOT secretary should be drone tracking programs.

Unfortunately, some of the initial reports covering the Secretary-appointee are not encouraging in regard to making any major changes needed at the FAA.

It looks like we may be in for four more years of non-leadership. And the UAS industry could be one of the first victims should an event that goes beyond a damaged 737 radome takes place.

Join Us In Las Vegas For More. Hard reviews of issues such as the UAS conundrum are the core of the International Aviation Forecast Summit. We explore these and other trends without regard for political correctness or ambient thinking.

This year, one of the focuses of the Summit will be the coming changes that technology will be bringing to all areas of aviation. Human contact is being replaced by A.I. and robotic technologies, and these will have transformative effects on how airports and aviation infrastructure will need to change.

Special New Year’s Registration rates are in effect until January 15. Click here to see why the IAFS is the #1 event in aviation.

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January 2, 2017

For BGI Clients…

2016 Was A Year of Solid Achievements.

But Standby For More In 2017…

All of us at Boyd Group International are excited about our client successes in 2016.

To start off, we note our most recent success at Las Vegas McCarran International Airport, where our China-Welcome program, developed with our partner, China Ni Hao, LLC., has been named by USA Today as one of the eight notable airport amenities programs of 2016.

And that’s after less than a month in operation! If you didn’t see it, we’ve covered it on the home page.

This is just the capping event of a great 2016. So, If you’re looking for aviation planning and consulting assistance, take a look at our achievements in 2016, and let us give you the competitive advantage in 2017.

As we enter our 33rd year in business, we’ve never seen this level of opportunities and challenges facing aviation. We look forward to working with our current clients and those who will join us in the coming year.

We’ll be publishing our 2017 Aviation Predictions shortly. As usual, get prepared for some hefty heresy compared to consensus thinking.

In the meantime, here’s some of what we accomplished in 2016…

2016: Air Service Access Programs – Moving Our Clients Beyond ASD

As we’ve pointed out in the past, most traditional “air service development” approaches are intrinsically obsolete.

In most cases, they start with a complete misunderstanding of the current structure of the airline industry. In fact, most of these ASD programs start out without any recognition of the realities of the airline industry.

Typically, they assume that there are lots of airlines in existence, and just tossing the right data will have them come running.

Today, the truth is that there isn’t an airport in the nation where the potential targets for entry aren’t readily obvious. Most ASD programs are structured on the belief that studies and surveys and leakage analyses and other voodoo are absolutely needed to identify Mr. RightAirline.

They aren’t.

The point is that traditional ASD programs today are mostly the equivalent of convincing a community to study a freeway interchange without first checking if there’s a freeway there in the first place.

Just take a look at the number of small and often unserved airports that are being sold blind  “studies” to “find more airlines” when the truth is that finding and identifying an airline is the easiest and most obvious part of the process. The professional responsibility is to recognize from the start which of the few airlines left would find it beneficial and appropriate to expand at that airport.

Sometimes, the answer – which comes from obvious consumer patterns as well as the obvious structure of the US airline system – is none, and with ethical and professional analyses, this can be ascertained before the airport needs to spend $20K on a “market study.”

At Boyd Group International, we take our clients to the cutting edge of emerging airline strategies and fleet capabilities.

Matching The Airport To The Airline Strategy Is The Key. As our clients know, BGI does not beat around the bush with massive boilerplate-appearance “market studies” that are blissfully disconnected from the world of future reality. The US has only a few airlines left, and there is little need to do a lot of research on “finding” which ones have potential for a specific airport.

This is how we keep our clients ahead of the planning curve. This past year, some of the highlights…

New Orleans. We are excited about all of the increases in air service access we helped New Orleans achieve. These include new service on Allegiant and Southwest, plus international flights to Panama, London and Frankfurt.
Bozeman – BGI assisted the community in recruiting the first nonstops to American’s global hub at DFW.
Bangor – The region now has nonstops restored to New York, with United service to its global hub at Newark, plus American flights to LaGuardia.
Santa Fe – Boyd Group International assisted the airport in crafting a successful Small Community Air Service Grant, which assisted Airplanners, LLC to bring home new access to American’s Phoenix hub.
Springfield: This airport’s position as the main regional gateway to Missouri was strengthened by the maturation of new service to the American hub at Charlotte, initiated in late 2015.
Colorado Springs: Frontier Airlines is back at COS, with the assistance of BGI. Today, the ULCC serves Phoenix, Las Vegas and Orlando from this #2 gateway to the Colorado Corridor.
Traverse City: BGI research and forecasts were instrumental in recruiting access from the New York metro, via seasonal service from the United global hub at Newark.
These are just some of the highlights of how we’ve assisted airports in enhancing access from the rest of the global economy.

In the next three weeks, we’re anticipating some more exciting news regarding our air access programs – domestically and internationally, too.

2016: Industry Thought Leadership

Following “the consensus” and “what everybody knows” is a great way to end up behind the planning curve. No leader in any industry ever was a follower of the consensus.

2016: Participation In Industry Forums. In the past year, Boyd Group International participated and contributed to the US Travel Association’s Annual CEO Roundtable.

The event was comprised of eleven CEOs from the top hotel/hospitality companies, and garnered aviation industry input from executives across the industry, including BGI president Michael Boyd.

In addition, Boyd Group International accomplished a comprehensive review of air service industry realities and future direction for the USTA. The report illuminated the hard realities of air service access in the US, and the need to address them in the context of the future and evolving economics of air transportation, outside of past assumptions and past structure of the air transportation system.

2016: The BGI Cuba Forecasts Were Validated. BGI was the first to review the potential for air traffic between the US and Cuba. “Between” is probably the wrong word, as for our friends living in Cuba, the number of flights offered is a complete non-sequitur. They can’t leave town.

Our analyses, first in 2009, and in updates since then, ran completely counter to “the consensus.” There isn’t any “pent up demand” for destinations that are all one-way originations and where things like hotels and ground infrastructure are sub-Third World.

This will turn around, when there’s a major government change in Havana. But for now the travel boom is a bust, and recent pull backs by American, Silver and Sun Country validate our forecasts. We’ll see more in 2017.

2016: China Outreach Programs

Boyd Group International was pleased to be part of the team that has established China Ni Hao, LLC., the first company that is focused on making US airports and venues functionally welcoming to the close to 4 million annual visitors from the Middle Kingdom.

The Las Vegas McCarran International Airport is the first gateway in the nation to establish a multi-level China-Welcome™ program, with the assistance of BGI and China Ni Hao. The program is engineered to provide Chinese guests with comfortable wayfinding into, through and when departing McCarran.

In its first month of implementation the China-Welcome™ program at LAS was recognized by USA Today as being one of 2016’s eight most important airport amenities.

But the China traffic opportunity is not just at large airports. We’re in the process of implementing opportunity-tailored China-Welcome programs at a number of communities, airports, and tourist venues across the USA.

2016: China Air Service Planning, In addition, Boyd Group International has been selected as the China Air Service Access Consultant for a major West Coast airport.

In this role, we’ll be developing the first comprehensive China Air Service Blueprint accomplished at any US airport, and developing relations with emerging Chinese carriers as well as second-tier airports across the Middle Kingdom.

2016: Aviation DataMiner™ Expansion

We were honored to welcome a major increase in subscribers to our Aviation DataMiner™ system – the most in any single year since 2008, when the program was launched.

The DataMiner system welcomes subscriber input, and generally we develop specific reports on request. In 2017, we’ll be introducing more features to the system, without adding more user complexity. In regard to the output, Aviation DataMiner addresses major shortfalls in raw BTS data, such as reporting by certificated carrier instead of airline system brand.

In 2016, we have been working to upgrade AirlineFinancials to be more incisive and valuable to the very specific subscribers who make use of this exclusive business intelligence asset.

The 2016 International Aviation Forecast Summit

Thanks to the enthusiastic support, assistance and innovative thinking at Reno-Tahoe International Airport, the 21st annual IAFS was the most successful in our history in bringing in international participation.

In addition to RNO CEO Marily Mora and her team, we also want to thank the RNO Board Chairman, Andy Wirth, for his aggressive assistance in bringing the magic of Squaw Valley to the event.

Clear your calendar for August 26-29, 2017. It’s when the 22nd IASF takes off, in Las Vegas, at the fabulous Wynn Resort. Click Here for details.

In conclusion, if you’re looking for new approaches and may be looking to engage a consultant – or move from another one to the fresh perspectives of Boyd Group International – let us know by clicking here, or give us a call at (303) 674-2000.

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December 26, 2016

The Higher Perspective:

Trump Administration China Policy:

Heading For A Stronger Trade Relationship

Half a trillion dollars.

That’s hardly chump change. It’s the value of what China is selling to the USA annually.

It’s incredibly important to the Chinese economy. Critically important, because there are no alternative markets for most of this trade, and a lot of the Chinese economy depends on people in New York and Omaha and Pasco buying goods made in China.

Boeing & The Trump Factor. Aviation in particular is part of this relationship. In fact, it’s usually the focus of the panting media stories about President-Elect Trump’s hard statements about trade relationships with China. Yikes! If Trump upsets the apple cart, Boeing would be zapped from selling airplanes in China.

It could be catastrophic – in fact this would mean massive unemployment.

In China.

What’s missed is something called the intertwined global economy. What the media misses is that it’s not just the Boeing airplanes that Chinese airlines are buying, it’s also the intrinsic role that Chinese components play in the manufacturing track of airliners Boeing sells around the rest of the world.

The factories in places like Shenyang need the business from the components that Boeing buys from them.

For Aviation, The Relationship Will Get Stronger, Not Weaker. Point: This is not a two way street. It’s a complex, omni-dimensional intrinsic relationship that involves China, the US and there entire global economy. The US is part of the Chinese economy, and China is part of the US economy. Both are part of the global economy that has no real borders.

Trade-War? Not Likely. President-elect Trump has made it clear that he intends to make major changes in how US-China trade is operated. The consensus in the media seems to conclude that unless Trump changes his tune, we may be in for a trade war with China.

The reality will likely be the opposite. Looking at the trends in place in regard to future changes in the economic base of both nations, the relationship will be stronger in the future..

Plan on some public posturing and on-the-surface acrimony, to be sure. But it is clear that there will be a much more defined and focused policy in regard to Chinese trade.

What US-China Policy? That’s probably going to be welcomed in Beijing – over the past 25 years, the Chinese haven’t really had much to deal with, when it comes to a concrete US trade policy.

The US position on trade with China has been sloppy, unfocused, and clearly not engineered based on mutual strength. There truly are imbalances in the relationship – virtually all due to US non-policies.

For example, some US commodities such as fish have a 30%+ tariff applied by China, while the same commodity coming from China suffers no tariff-increased price at the supermarket checkout. That’s not something the Chinese created – incompetent US policies have allowed it to continue.

The China Manufacturing Advantage Is Eroding. Let’s repeat the bedrock reality that much of the media reporting has missed: China also needs the US market – but truth be known, the dependence on China for manufactured goods is going to decline in the future.

One of the futurist trends that were outlined at the 1st Annual China-US Aviation Opportunities Symposium, held by Boyd Group International in 2015, was that the main advantage of the Chinese manufacturing industry – low labor cost – is being rapidly eroded.

Chinese companies are shifting to high-efficiency robotics, which are not labor-intensive. The products are cheaper to produce, and defects drop materially. That’s great.

But a robotic factory in Guangzhou has no cost advantage compered to one in Columbus, Mississippi. One latest example is the decision by the largest manufacturer of auto glass moving a factory from Guangdong to Ohio. That wasn’t done just as a gesture to Trump: it was based on solid business realities.

Point: the trade relationship with China has been officially back-burnered for years. Now, with major technological shifts facing the Chinese manufacturing industry, and the implementation of a focused US policy, the outcome will be a much stronger China-US trade relationship.

Trump has made it clear that the US will look to level the playing field. The fact is that China in its own best interests has naturally taken advantage of a system that the US has limply allowed.

China respects strength – and that’s been missing over the last four Administrations.

US aviation and airports have nothing to worry about.

China Will Be An Increasing Part of US Aviation. Tapping into the growth of the US-China market is important to all sectors of aviation.

…For airports, the flow of Chinese visitors into the US represents enormous new enplanement flows…

…Also for airports, the investment potential of Chinese companies is enormous, too. Get that ALP updated… Chinese money is coming…

…For communities, Chinese investment and leisure traffic will be an important addition to the local economy.

This is the reason that you should consider attending the 3rd Annual China-US Aviation Opportunities Symposium, August 26, at the Wynn Resort in Las Vegas. It’s an event that brings to the table the trends and opportunities that China represents to all sectors of communities and airports.

It’s in conjunction with the 22nd Annual International Aviation Forecast Summit, which kicks off August 27-29. Special early registration rates are now in place for both events.

Click here for details and to register.

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December 19, 2016

Starting Off…

We want to thank Justin Bachman of Bloomberg for his insightful coverage of the China-Welcome system installed at Las Vegas in conjunction with our partner China Ni Hao, LLC.

We’re now working with a number of clients across the airport and travel sectors in tailoring programs to gain more of this new business.

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Trump & Airport Infrastructure –

Time To Move From Third World Planning Concepts

As we move into the next Administration, it will be interesting to see how the promised trillion-dollar investment in new infrastructure pans out in regard to aviation investment.

Past history does not give much comfort.

The airline industry’s opposition to an increase in the Passenger Facility Charge – the only government fees probably in existence that can’t be hijacked into other uses – is not encouraging.

Then there’s the pesky and obsolete assumption that just building new facilities will increase air traffic.

Last fall, Elmira got a state grant for $40M to build a new terminal and other facilities, ostensibly with the promise this would help bring more air service.

United and American didn’t get the memo – they’re out of ELM. It’s due to traffic issues, not gate space. This isn’t to imply that there aren’t opportunities for Elmira, or that the $40 million isn’t a great win for the community. It’s just that the future isn’t in more scheduled service – Ithaca is now the emerging air gateway to the Southern Tier. But as an economic generator, ELM has a role as a part of the region’s business base… planning needs to recognize this.

Relying On Goose-Chase Data Is Third World. Another challenge for the future of US aviation is the need for professional planning and forecasting. Air access is both regionalizing and co-terminalizing… trying to recapture scheduled service where it structurally can’t be supported isn’t productive.

Today, it’s open season on a lot of smaller communities, getting guided down into dead ends with air service “studies” that deliver data that sound real good, but don’t mean anything within the context of the air transportation system.

Examples are the “ticket source” studies that purport to illuminate the number of air consumers within a radius of an unserved rural airport, and then try to represent it as “proof” airlines would be interested in flying locally.  Typically, this excites the community into thinking it’s possible, when it’s simply wishful conclusions fed to unknowing civic groups. This is typically without any discussion of the need to aggregate sufficient passengers at one of the network carriers’ hubsites.

Usually these “reports” confidently list “top consumer-desired destinations” as weather vanes pointing to the great opportunity. These studies tend to always leave out things like a profile and analysis of the levels of service that would be required to divert consumers from current travel patterns, such as the airline brand, comparative fare levels, frequency needed for consumer support, and whether there is any carrier with a fleet that can deliver this.

But they almost always conclude that more exploration is needed, and an application for a SCASD grant is imperative. However, recent experience in places like Bowling Green, Youngstown and Topeka prove that consumers tend to have different conclusions than what’s in lovely, heat-map rich studies.

But these are just a couple of small examples of tossing money at the past instead of the future.

We have what should be the poster child for the Trump Administration on what not to do in regard to new airport infrastructure.

Build It And They Won’t Come. Mid-America Airport.  It’s probably the closest thing in North America to Third World planning.

Sort of a modern-day Cargo Cult. Build it and it will magically attract big metal birds to come and land there.

It was conceived in 1995 as a solution looking for a problem. They haven’t found it yet, but they’re still diligently trying. Beyond Allegiant travel-company service, none of the assumed air service ever came to the facility.

Creativity They Are Not Short On. There is no telling how much consultant voodoo has been expended on this tax-eating facility over the last 20 years.

First, it was to be a much-needed passenger reliever for St. Louis/Lambert. Certainly, there must have been some encouraging “studies” back then supporting this projection in glowing terms. But, nothing doing.

Then came a string of really embarrassing, supposedly surefire alternative uses.

There was the plan to make Mid America the transfer point for flowers from Latin America. They even reportedly put in refrigeration facilities, before the scheme collapsed under the weight of reality.

That, too, was probably a bonanza for some “advisor” showing how posies and Johnny-jump-ups would do better if trans-shipped over southern Illinois.

Then there was the grand plan to make Mid-America the US cargo gateway from China. Despite the fact that Mid-America airport is possibly one of the least competitive and least well-sited facilities for that purpose, it appears that a lot of money was spent hyping the scheme.

They even reportedly paid a Chinese cargo carrier to do a placebo flight into the place, so stuff could then be expensively trans-shipped on trucks to distant places like Chicago and New York – cities that somehow it was assumed had no air cargo access.

It made for great, swooning press stories, albeit a total waste of money.

Then it got worse. And even more embarrassing.

Let’s not forget the plan to use Mid-America to ship Asian carp back to China. Or, the grand plan to import seeds from Indonesia.  All of this being several thought-galaxies away from the 1995 dire necessity to relieve future passenger congestion at STL.

Marco Polo – In Reverse, But With A Load of Strawberries. Now, we’re back to an air cargo scheme – but with a lot more flash. This time it’s to create Mid America as the lynchpin in a new “trade route” to transship fruit between Latin America and China.

One has to wonder if any credible analyses have been done on the current channels moving these vittles between the two continents. Or a competitive analysis regarding the distribution and collection systems at both ends.

Oh, of course. There’s probably another in-depth “study” that proves that for this application, Mid-America will be the savior of the global fruit industry.

A Beacon of What Not To Do. Hope springs eternal. As a point for passenger charter or impulse-demand traffic such as Allegiant, Mid-America has some usage. But the local taxpayers have footed the bill.

Trump: Take Notice. The airport infrastructure in the US is a huge opportunity for economic growth. We do need innovative planning and investment.

But it has to be accomplished within the context of the reality, not politicians’ pipe dreams.

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December 12, 2016

Starting Off…

Congratulations To Santa Fe On AA Expansion

New AA nonstops to Phoenix start this week from SAF. Congratulations to Cameron Humphres and his team.

Also credit to Kent Myers and AirPlanners, LLC, who were instrumental in bringing this new service to town. At BGI we were honored to craft the SCASD grant that was a factor in making this new service possible.

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Trump & Aviation: Looking Positive – 

Even Before The First 100 Days

At least, the pre-60 days of the Trump Administration is looking positive for aviation.

To the shrieks of shock from the usual kibitzers on the sidelines of the industry, Trump has openly questioned the costs of the next Air Force One set of aircraft.

Regardless of the nonsense from the Peanut Gallery, that is a very positive move. For the taxpayer, it’s only good business – something that’s traditionally not been anywhere near the White House.

Now, he’s pointing out the cost overruns with the F-35 program, and doing the unthinkable – criticizing the cronyism that has riddled defense and other government programs. It’s “out of control,” according to Trump.

Great start – he’s questioning things that were off limits. He’s the only one in years – probably in history – that sees that a whole parade of sacred-cow emperors is buck naked. He’s calling it like it is, instead of being politically-correct.

Now, let’s see what he does with the rest of the aviation planning mess that’s been accepted in Washington…

Let’s start with NextGen. As a fraudulent boondoggle, it makes the F-35 and AF-1 programs look like financial misdemeanors.

Yikes! Heresy! Yes, we are fully aware that NextGen is the unquestioned solution to making the skies more efficient, thereby opening a torrent of new, cheap and widespread air service across America. Yes, we know that just about the entire aviation cognoscenti are four-square behind the great progress made by NextGen.

And, of course, we fully know that all the “experts” and their media groupies support and downright worship the NextGen program. See, it’s just been lack of consistent funding over the years that have kept the FAA from implementing the next big thing.

And what we also know is that all that stuff is flat out garbage. The facts and the past 25 years prove it.

“Reform:” Side-Tracking Assignment of Responsibility.What we need, the official line goes, is “air traffic control reform” – which in its current form is a dodge to make sure that we have no one daring to illuminate that it’s 30 years of consistent FAA mis-management, not funding, that’s the reason that our skies are inefficiently managed.

We need to install absolute accountability for results – and that’s not what’s being suggested with “reform.”

The problem is just what Trump is pointing out in the F-35 mess – there’s too much political influence. Nobody in the airline industry is willing to take on NextGen, because it would mean offending the political-appointee hacks at the top of the DOT. And, truth be known, within the current crony-at-the-top-system, that’s not good business.

Here’s a hard fact – in contrast to some of the semi-ethical network “correspondents” who simply go on the 6PM news and confidently regurgitate the FAA party line like a penguin feeding its young – the ATC system is at the bottom line no more efficient in getting flights across the skies than it was a decade ago. There are over 14% fewer airline flights than in 2007, yet on-schedule performance is essentially no better.

That’s called failure. That’s called incompetence. That’s just another federal overrun program.

If Trump is serious about ending waste, dismantling the NextGen mess, and installing whole new management and an absolute focus on commitments and accountability should be at the top of the aviation list.

The Airline Industry: Stop Cheerleading NextGen – It’s Costing You $12 Billion. There are two immediate moves that must be made if Trump is serious about ending waste in aviation policy:

Step One: De-stealth the Next Gen mess. Bring it out in the open. Recognize (as report after GAO report has done) that it’s been management incompetence – not just funding – that is the core reason that NextGen is a failure.

Here’s the statement that causes the in-the-know aviation groupies to get all indignant: NextGen needs to be torn down and a new approach implemented.

Step Two: Let the airline industry know that it’s time they better managed their own production lines. The fire-and-forget operational systems need to be replaced by more hands-on management of the machines they hurl across the skies.

It’s fully understood that this will run counter to what the “experts” will be spouting… but the same denizens of the mushroom gardens of Washington thinking have been babbling about the “success” of NextGen like groupies at a rock concert.

The Proof Will Be In The First 100 Days. Let’s see what the new DOT secretary does… if she takes office and has to “learn” about NextGen from the installed base of bureaucrats already there, we’ve got another LaHood on our hands.

But, the initial moves by Trump in regard to aviation are positive.

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December 5, 2016

McCarran International: The New China Gateway

It’s official.

Las Vegas McCarran International is the nation’s first fully-functional China-Welcome airport.

Not just “China ready” but instead China-functional. Visitors from the Middle Kingdom arrive in an environment that is welcoming and shows respect for their business.

Innovation In Outreach & Customer Service. The McCarran program, engineered by China Ni Hao and Boyd Group International, was tailored specifically to the air travel experience – which is a whole lot more than just being “ready.” It means being pro-active.

From even before they left China, McCarran was “there” – literally in their pockets – with the most comprehensive and interactive WeChat page of any US airport – one that sets the standard for functionality and  user-friendliness – developed from the ground up in Chinese by China Ni Hao/BGI – not translated from English.

Then, from the opening of the airplane door, through Customs and Immigration, all the way to curbside – and beyond – the special communication and customer service needs of these Chinese guests were accommodated seamlessly, unobtrusively and proactively.

At all critical communication touch points, professionally-accomplished Chinese signage met these guests, and special Mandarin-speaking Huanying (Welcome) Ambassadors were there in bright red sweaters to direct, welcome and assist.

The McCarran International China-Welcome(tm) program, designed and delivered by China Ni Hao and Boyd Group International, now puts Las Vegas a step ahead of other airports in substantive and innovative positioning for more Chinese airline entry.

More Chinese Are Coming. From More Places, To More US Places. Boyd Group International has identified at least four more, now-domestic Chinese carriers which will be looking to expand with new fleets of long-range airliners from more than a dozen second and third tier airports in China. Having a full program to welcome these potential visitors is a huge advantage.

For more on the Las Vegas China-Welcome program, and how airports of all sizes can move attract more of the 23 million Chinese who will visit the US in the next five years, click here.

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As Predicted – US-Cuba Traffic Is Not Developing

As we noted last week, the levels of planned capacity from the US to Cuba simply cannot be supported in the near term.

Now, American is cutting 25% of its previously-planned capacity, and seeking to replace some flying with code-share partners instead of mainline metal.

Barring a major change in government policy in Cuba – which could take place in the foreseeable future – there is very little traffic demand to most places on the island.

It was announced that AA is cutting one of its two flights into Santa Clara. The hard fact is that there’s not much in this community of just 275,000 people. Outside of some clapped-out 1960s hippies doing pilgrimage trips the Che Guevara tomb, there simply isn’t enough US traffic – and probably won’t be for several years.

Standby for more cutbacks. At some point in the near future, the usual suspects in the financial world will notice and start squawking confidently about how airlines need to pull back.

If you haven’t seen it yet, scroll down to last week’s Update and download our report on Cuba realities.

More Reasons To Take Media Stories With A Grain of Salt. Or, Maybe The Whole Shaker. A month ago, no major media source had tumbled to the obvious. It’s amazing how just now the media is “reporting” on how “capacity is outrunning demand’ – when this situation was clearly obvious long before the first US flight took off for Cuba.

But, why bother to do any fact checking? Heck, “everybody knew” Cuba would just be a tsunami as soon as the first 737 touched down at Santiago, right?

Now that the data and facts are obvious, watch for the panting media stories trying to the first in ink with this breaking news – which, if these supposed journalistic sources had bothered to check the facts, would have been reported from the start.

It’s unfortunate that so much of what we read in the media is just me-too reporting with almost zilch background research…  keep that in mind.

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November 28, 2016…

Cuba – The Only Thing Certain Is Uncertainty

The not-much-lamented passing of Fidel Castro, along with a new administration in Washington, has fueled speculation regarding the future of scheduled passenger air service between the US and Cuba.

Since the changes in air service policy were the result of a presidential executive order – a modality that incoming President Trump has decried – there are some who are predicting that Cuba authorities for US carriers will be revoked.

That’s not likely.

But a pull-back in currently-planned capacity is very likely by the end of 2017.

As BGI has pointed out in its independent analyses of the market, Cuba represents probably the biggest potential bonanza in the history of US airlines.

Any cursory review of what Cuba can represent for the US travel market is mind-boggling. Start in western Cuba and move east toward Santiago, and the range of tourist opportunities are incredible.

But the operative word is “potential.”

The future notwithstanding, Cuba today is largely a dog market, regardless of the panting stories from the travel industry. Tourist infrastructure is limited outside of large resorts. Travel through the island is iffy. And business investment is still years and a major government change away.

What is unknown is whether there’s enough traffic in the near-to-mid term to support the high levels of capacity that are being tossed into Cuba, particularly to secondary destinations. What some of the travel industry “experts” are predicting simply doesn’t track with reality.

If there are insufficient hotels, and there is near-zero business – not to mention near-zero consumers in Cuba that can even leave the place – it doesn’t take another market study to figure out the challenge US carriers will be facing with the number of seats being tossed south.

At the 21st International Aviation Forecast Summit last September, hosted by Reno-Tahoe International Airport, BGI presented a special Workshop that candidly addressed the realities of US-Cuba air traffic potential.

For a hard look at facts and reality – instead of the fluff much of the media is issuing, Click Here to review and download the Workshop.

Nobody knows where Cuba will go when the other Castro – Raul – moves on to the celestial worker’s paradise in the sky. But a major change in Cuba is possible in the next 3-5 years, depending on who replaces him.

The question in the meantime is whether there’s anywhere near enough traffic to support the capacity that US carriers are now putting into Cuba.  The first T-100 data should be very interesting.

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November 21, 2016

Supersonic Transport:

Moving From Ambient Thinking To Futurist Planning

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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November 14, 2016…

Aviation: What President Trump Should Tackle First

Air Traffic Control – Kick Some FAA Butt

Let’s not hold back here.

NextGen is a failure. A fraud, and a sham. The new President needs to be aware of it.

Yes, we know that this is heresy, and apparently every sector of the industry endorses and swoons over it. That doesn’t change the hard truth. Or the data behind it.

And he’d best not take the word of the FAA Administrator.

The term “reform” is now tossed around, as if it’s some sacred solution just belched up at Delphi. But here are the facts: after years of promises and billions spent and lots of new equipment installed, airline on-time performance is not materially better. Somehow, this is missed by all the folks touting NextGen as the next coming of the technology Messiah. What they miss is the fact that the arrival keeps getting pushed back.

Another fact: the problems with the FAA not being able to get anything done – as demonstrated by the “on-time” data – are not due to inadequate funding. That’s jive. Yes, there are issues with reliable funding of the FAA, but that’s not why NextGen is a boondoggle. The funding problem has been eclipsed by a klutz management problem.

It’s unfortunate that the aviation media cognoscenti don’t bother to read repeated GAO and DOT IG reports – most of which illuminate the fact that the upgrade program has had dimbulb management and fundamental lack of clear direction. Instead, they regurgitate FAA propaganda in the finest style of a cowed third-world media.

“Reform” seems to be a euphemism for “privatization.”

That’s great. Let’s take the same system, the same structure, the same lack of direction, and the same management staff, and “reform” them into a privatized system. Yup, that’ll fix things.

Unfortunately, “reform” seems to be aimed at assuring that the incompetent leadership at the FAA is absolved of the fact that they are blithering failures, the latest in a gaggle of gumball leaders over the last 20 years.

Trump is a businessman, not a politician, and one can assume he focuses on getting results, not PR dispensed from jive-time promotional kiosks the FAA sprinkles around airports to tout the NextGen program. We must hope he doesn’t buy into the FAA party line.

Recommendation: get rid of the senior management at the FAA, and replace with subject-matter experts who are accountable for clearly outlined results.

If the current FAA Administrator still has time on his appointment, no problem.  Funny-box the guy – i.e., kick him upstairs to occupy an office and stay out of the way, maybe give him a yo-yo to play with, while real managers are put to work finding measurable solutions to replace this sacred NextGen mess.

Recommendation: Trump seems to be a leader who does not tolerate acceptance of failure. As we brought out at the 21st International Aviation Forecast Summit, it’s time for the airline industry to take full responsibility for not being able to adhere to the schedules they publish.

“Fire and forget” operations need to be replaced by airlines actively managing their production lines, from the time the flight leaves until it gets to the destination. Trump needs to do a finger in the chest meeting with airline leaders in this regard. Bluntly, touting a situation where 20% of flights are more than 15 minutes beyond airline-developed schedules as “excellence” is hogwash.

The TSA – Rebuild It From The Airport Back Door Up

There’s no argument that the TSA is one of the great legacies of the Bush administration.

And, it’s consistent with most of that legacy. At least this was one that didn’t involve hurling F-16s in all directions.

No hard planning, no direction, just a flurry of smoke and mirrors run at the top by a parade of patronage appointees who are not competent to secure a Slurpee machine at the local 7-11, let alone our transportation system.

Nothing wrong with the TSA rank-and-file. While the interactions are short and simple, they still tend to be the most polite folks at the airport. But the system they’re stuck in isn’t security, it’s kabuki theater to make us feel safer. From the very beginning, when the first actions of the first TSA administrator appointed by Bush was to re-decorate his office to the tune of $400K, right up to now, this whole program has been the equivalent of trying to prevent a forest fire with an empty squirt gun.

Recommendations: The immediate need is to install a team of qualified experts – not politicians – to transform this pointy-object patrol into a professional and pro-active security apparatus. What’s there today is a world-recognized joke. But even the congressional hot-air types who have railed against it have done zip.

In addition, the new TSA must have a fully proactive event anticipation plan for each airport, well beyond the willy-nilly run-for-your-lives-we-found-a-funny-suitcase evacuations. That means a complete program to review things with the mind of a terrorist.

It also means having well-developed event-mitigation plans to assure clear lines of communication and management if a terrorist act is accomplished. How about access and egress for emergency vehicles? Crowd management and protection? Communication channels and clear, pre-determined delineation of various law-enforcement agencies? And a lot more that may as well be a primer in advanced Yiddish as far as Jeh Johnson is concerned.

Because President Trump is not beholdin’ to the Washington elite, he has the opportunity of eliminating two of the most egregious and dishonest misfires in US government history.

A lot is on his plate. We can hope he makes these two issues a side-dish.

Monday Update…November 7, 2016…

Touch ‘N Go…

China-Welcome Program Progressing At LAS

The process of making McCarran International Airport the first truly China-Welcome US gateway is moving on target to be ready for the first Hainan Airlines arrival on December 2.

Transformational wayfinding is well underway, the in-China WeChat app is being beta-tested, and a team of Mandarin-speaking Huanying Ambassadors are in training.

Over the next five years, BGI forecasts more than 23 million visitors will come to the US from the Middle Kingdom. Chinese airlines will be looking at gateways that are truly ready and functionally-prepared. Our partners at China Ni Hao, LLC. are making sure that Las Vegas will be the standout as more carriers look at accessing the US market.

For more information on how BGI and China Ni Hao are preparing communities and airports for this exciting new travel wave, click here.

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Year 2016: Changes In Air Access Patterns

It’s where the capacity is being applied

Enplanements nationally are tracking generally with the increase in airline seat capacity… about 4% year to date. Departures are up just 1.1% over last year.

But for communities working on their air access planning (as opposed to blind ASD schemes) the real data in in the four network carriers – the ones that deliver access from the rest of the world.

For these four core carriers, schedules are absolutely flat, and capacity increases are under 2.5%. This indicates that much of the nation-wide 4% growth is driven by carriers other than the full-schedule, full-network airlines. Point: this means that it’s in price-driven and leisure markets where the growth is occurring.

This clearly is another indication that in the future, quality of traffic, not necessarily volume, will be the determining factor as full-network carriers adjust their route systems.

Something to consider in air access planning…

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The 2017 International Aviation Forecast Summit…

We are planning for a very exciting and new-format Summit next year… the venue and dates will be announced in the next four weeks.

Hint: clear your calendar for late August.

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October 31, 2016

Congratulations To Ontario!

Tomorrow ONT enters a whole new phase as a gateway to Southern California, independent from Los Angeles World Airports.

At a time when the entire global air transportations system is dealing with new traffic flows, the future for Ontario is exciting… to say the least.

Our congratulations to Kelly Fredericks and his team!

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Coming – Re-thinking Cabin Safety Instruction

The American Airlines incident at ORD, where (apparently) a catastrophic engine failure caused an aborted take-off, is likely to change the approach to in-cabin safety announcements.

Take a look at the pictures – passengers were taking their carry-on luggage with them – stopping to take it out of the overhead, through the cabin, and down the emergency slide… some clowns in the cabin of the burning aircraft were actually taking phone-videos.

All while the right wing was engulfed in flames and half of the emergency exits were blocked.

It’s clear that passengers are not taking these instructions seriously – regardless of comedic approaches to getting the information across. The subject matter is dry and airlines have correctly attempted to get passenger attention with innovative approaches to demonstrating safety.

But in light of the Chicago incident – it’s clear that even on AA – which at least historically has pretty much kept the videos more straight forward – passengers just don’t get it.

Point: it’s likely that any safety videos in the future will be given a lot more pre-installed scrutiny in regard to effectiveness to getting the message across.

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Second Quarter 2016 Data:

What The Numbers Really Illuminate

The challenge with any sets of data is not reading the numbers, but ascertaining their value in determining current and future trends.

That’s the foundation of Aviation DataMiner™ – and what sets this business intelligence platform apart from other sources. The 2nd quarter 2016 DOT data is out, and, as usual, the media is abuzz making vapor-brained comparisons between numbers they don’t understand in the first place.

There are the perfunctory stories – put out by reporters who are clueless about what they’re writing about – that compare one airport’s fares against the “national average” – which is about as meaningful as comparing the performance of the Chicago Cubs to the Chicago Bears.

Using The Data, Not Just Parroting Them. At BGI, we help our clients see the future, not read tables of numbers from the DOT.

Here are the key metrics to monitor in this data. (The first requirement, however, is to have a professional knowledge of the data and the system that delivers it.)

Airline Trends: It’s more than raw ASM/ASK production – it’s where it takes place, and the number of flights that are generating it. Plus, this is not a product-cohesive industry – if Spirit has a 20% increase in departure production, and United has -5% decrease, the average is not a valid metric.
Fleet Trends: In the 2nd quarter, the continued move toward larger units of capacity was demonstrated. For those playing the ASD home game, without any understanding the airline strategies, they miss the fundamental issues of fleet changes by airline brand. For just one example, we’ve seen both United and American start to re-plan for a world without 37-seat turboprops… this needs to be a message in regard to future air access planning.
Airline Corporate Strategies: Understanding what airlines are announcing from the front office can help determine the value of reported data. For example, the attendees at the 21st International Aviation Forecast Summit this year got insights on the very different fleet planning strategies at Frontier v Spirit. They do factor into airport access planning.
Capacity Trends: To start with, the US air transportation system is not growing… like, not at all. The number of departures in the 1Q of 2016 was up just 1% – which is statistical noise. The message is which airlines added departures – regardless of the fact that the industry as a whole added just 1%. Seats were up about 3.5%, but that’s not to accommodate more demand, but simply due to the increasing size of the average aircraft in major brand fleets. And, again, it’s who is shifting capacity that tells the story.
Revenue Trends: The take-away here for airport planners is that in a shrinking airline industry, with larger average aircraft, the name of the game will be revenue-quality, and not just traffic volume. … this needs to be another message in regard to future air access.
These are important factors – ones not even vaguely addressed in stock ASD “studies” and “consumer surveys” that are semi-ethically foisted on airports containing veneer gotcha questions (“will you use the local airport if we have flights to Newark?”) – without any further discussion of what that service will be.

For aviation planning professionals, we’d recommend a review of Aviation DataMiner™ as your source of industry business intelligence. The range of reports and the flexibility of DataMiner™ delivers strategic planning – not just tables. Click here for more information & a free trial subscription.

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October 24, 2016

Touch ‘N Go – Air Access Update

Congratulations to New Orleans on recruiting British Airways flights to London, starting next March. BGI is proud to have worked with MSY in these efforts.

This international service joins Condor, which will be operating to Germany from New Orleans this summer, another project in which Boyd Group International was involved. Our advanced forecast and strategic planning expertise, such as the concept of illuminating the “road-hubbing” dynamic  that nonstop international service generates, was a core reason for these successes.

Our client Ithaca will be seeing larger American Airlines aircraft this spring, as the carrier concentrates Southern Tier service into that airport. We are honored to have worked with ITH in its strategic air service planning.

These events join our successful efforts that have led to air service access improvements in the past few months, including implementation of highly-successful AA service between DFW and Bozeman, and a SCASD grant that’s made access to AA/Phoenix possible from Santa Fe.

And as we noted last week, working with entities in Colorado Springs helped attract Frontier back into town, now with flights to Orlando, Phoenix and Las Vegas.

This is what sets Boyd Group International apart from other consultants. We are experts on airline strategies, and we have the respect of airline industry leaders.  Plus, we have better data – including the only airport traffic and trend forecasts accomplished in the private sector.

If your community is focused on results, not endless “studies,” give BGI a call to discuss your air access issues. As our clients will tell you, we will give you the facts as-is and where is.

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The Administration’s New “Competition” Directives

Just a little bait-and-switch…. But at least this time the switch had some value.

Last week, we all waited to hear about the carefully media-packaged directives that would be coming out from the depths of the Obama Administration to enhance airline competition for consumers.

What finally oozed out, in a shower of high-sounding, empty-suit press releases, was basically a requirement for airlines to refund bag fees when they screw up, for airlines to report on-time data for all of their branded flights, and some gobbledy-gook about making total cost of air travel transparent.

Nothing about competition, but at least it was generally positive.

As for the bag fee refunds, it should be embarrassing to the airline industry that the DOT filled this regulatory gap.  To take money in exchange for handling a passenger’s Samsonite would imply a commitment and a de facto contract to do what is expected when a bag is checked – to get it to the customer at the other end of the flight. If that fails, the airline should refund the dough.

Whether or not some airlines may have already been doing this is not the issue. The DOT saw a chance to regulate, and they jumped at it.

Data Not Understood. The biggie, however, that has the lightweight media all in a dither, is the requirement for airlines to report “on-time” performance for all of their flights, not just the ones operated under the brand-name operator’s certificate.  Because of the DOT’s 19th century reporting system, they still think “certificated carrier” is the same as “airline.”  (So does most of the media as well as the academics that churn out “quality” reports every year.)

The media saw the term “regional airlines” in the directive and proceeded to charge off into the weeds, with lush stories about how this will reveal the sorry state of schedule performance in “regional” markets. That’s because, as we all know, that these “regional airlines” just fly to “regional” markets.

Silly Headlines…We’ve been regaled with misleading headlines, like “Airline On-Time About To Get Worse” – clearly demonstrating that knowledge of the subject matter is  not a job requirement. Since these reporters are clueless of how and where these “regional airline” assets are used, to make such as statement again cautions us to be suspect of much of the veneer stuff that gets onto the wire. The fact is that they have no idea regarding what the actual numbers might be, but they see “regional” and assume that it’s all small airports, and all substandard performance.

Point: the on-time performance of the industry won’t change. It’s just that more of it will be reported. But to read these dimbulb headlines, one would think that we’re about to see more and more delayed flights because of new disclosure requirement.

It’s another reason that much of what’s regurgitated by the media is about as reliable as the information from a third-rate used car lot. What these writers – many from big-name news sources – don’t know is that these “regional airlines” are neither regional nor airlines, and they provide lift that is used in markets such as Denver-Phoenix, Chicago-Atlanta, and Denver-DFW. Real “regional” cities.

But nonetheless, knowledge of the subject matter isn’t much of a requirement, anymore.

By the way, subscribers to Aviation DataMiner™ have always had more accurate on-time data, because we re-map the information to reflect where “regionals” are flying for majors. Unfortunately, much of the “regional airline” data doesn’t exist, because operators of 50-seat and smaller airliners up until now have not reported any such data. The academics that slush out airline reports and the see-it-and-regurgitate-it media don’t bother with this bit of information.

As for the gobbledy-gook from the DOT about full transparency of the cost of travel, the fat is in the fire for the airline industry. Regardless of any philosophical concepts about “re-regulation” it is clear that the DOT is going to do something in this area unless the industry jumps to it first. Consumers don’t always have a clear idea of the cost of a flight, and even if it’s just 1% of customers, it’s an opportunity for the feds to get involved.

And that’s usually not good for anybody.

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LAS: The First China-Welcome US Gateway

BGI and its partners at China Ni Hao are honored to be assisting Las Vegas McCarran International Airport in implementing a comprehensive program to become America’s first China-Welcome gateway.

When passengers from Beijing deplane from Hainan Airlines this December, they will discover an experience that will be the standard for other US airports to follow. Today, visitors from China find US facilities informationally-foreboding and unfriendly. LAS will be just the opposite, with a program that starts before the visitor leaves China and goes all the way to the curbside at LAS.

Of course, just about every large airport will claim  they have some type of “China ready” program, but they are typically just cultural, not functional, activities. Las Vegas McCarran is the first to actually implement a comprehensive pro-active functional approach.

For more information on how LAS is moving into the future, click here.

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October 17, 2016

Touch ‘N Go…

Congratulations to Colorado Springs, which now has gained Frontier service to both Phoenix and Orlando, joining initial service to Las Vegas. We are honored to have worked with the airport and community entities in starting this air service ball rolling.

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China – It’s Not Far Away, Anymore.

As Network Carriers Re-Think Route Systems, China’s A Strategic Opportunity For Regional Airports

At a secondary US airport, gaining another 500 – 1000 or so annual passengers may not sound like much.

But if they’re connecting to and from international flights – like, from China, airline planners would sit up and take notice

It’s Revenue-Quality, Not Just Load Factors. It’s not a distant fantasy – outreach to capture more China traffic is right now an opportunity that virtually every non-hubsite airport in America can pursue. We’re working with some that already are.

In an environment where network carriers are looking to shift resources to higher-and-better use,  the addition of strong new international traffic capture at a small or mid-size airport could be the difference between getting an E-175 upgrade on the next schedule, or a red-line through the entire schedule. (Which we just witnessed at Elmira and Binghamton, where both American and United have announced that they’re leaving town. One reason may be that the third airport in the Southern Tier – Ithaca – likely has more ambient international traffic, due to the presence of two major universities.)

Another ARC Study Or Leakage Analysis Both Miss The Future. This is another indication of how  traditional “air service development” programs miss the mark. That’s because they usually are trying to recreate the past, in a near-total vacuum of futurist planning. Almost consistently, they focus on the local, instead of the global.

Airport planning today needs to be more than “outside the box.” It needs to be “outside the borders” – looking at all the options that the global economy offers.

Chinese Consumers Are Actually Looking For You.  But Can They Find You? Traditionally, the approach to getting Chinese business has been having exorbitantly-expensive “representation” with a surrogate office in China. The idea was to have local assistance in getting your airport or community in front of Chinese consumers. For corporate clients, having that access could be important.

But when it comes to attracting Chinese leisure traffic, that’s not the case anymore… these consumers are actually looking for you, and they aren’t making telephone calls to that expensive representative office located on Shanghai’s Waitan.

According to a new survey of subscribers from Travelzoo, over 70% of all international trips from China initiate with research and booking via their smartphones. When you consider that Chinese visitors to the US will exceed 23 million over the next five years, and the fact that this is a segment that’s focused on seeing all of America – particularly rural America – it’s a clear sign of opportunity for airports and communities across the US.

The question is – is your airport (and its region) accessible to the 300+ million Chinese consumers who are, right now, exploring the cyber world to plan their next vacation?  The 70% that are using their smartphones to find out about America, is it there?

Your airport can be. More cogently, it should be.

They Spend A Lot – But Only In Places They Know About Before They Arrive. As we’ve covered in our China-Welcome™ programs, presented with our partner, China Ni Hao, the high-spending leisure market (over $8,000 on average per visitor) from Middle Kingdom will represent the #1 international growth market, and unlike other nationalities, they are focused on seeing secondary America, often places Americans don’t even know about.

Today, the format is to fly to a US gateway, and then use motor coaches to tour the countryside. But increasingly, the propensity in the future will be to connect onward into US markets, instead of starting from the air gateway city.

This is particularly true with the emerging Chinese millennial consumers, which have very different and more demanding demographics compared to current waves of visitors from China. They will be seeking to fly into interior cities to start their US itinerary, and will be seeking higher levels of service at these points. They want to be assured that they are welcomed.

Furthermore, they’ll only be going to go to secondary airports and venues that they can learn about before they leave home.

Are Your Venues Accessible On Baidu? What this means is that US airports and venues that are accessible on their smartphones in China and on the web have the competitive edge. Furthermore, US venues that are accessible on Chinese OTAs such as CTrip, Qunar and Tuniu are ahead of the game – because US OTA’s are not widely used in China.

Getting into the pockets of hundreds of thousands Chinese consumers – literally – is the key to getting more of this traffic into town. China Ni Hao has cost-effective programs to get your airport and community up and profiled in China with a business-authorized WeChat app that can proactively give you the competitive edge, from just informational sites, to fully-interactive features that engage the consumer.  We can also help get your destinations accessible on Chinese OTAs, too.

Respect Is Reaching Out – Even Locally. Chinese consumers surf the web probably more than any other nationality. So having the basics of your airport and region showcased in Chinese – even on your current US website – is a huge advantage.

It needs not all the bells and whistles on the English pages, but instead a professional page for your current US website that Chinese netizens can see and become familiar with your airport and community, as a starting point for more research.

It’s not complicated – if done right: Keep it simple… Illuminate the ease of connecting from China. The levels of air access.  Ground transportation. A brief review of the sights and venues. Information about having brochures and directions ready and available for Chinese guests. (You do, don’t you?)

The point is that they do surf the web, and airports that show the respect and desire to reach out to them have the advantage.

Doing It On The Cheap – A Great “Keep-Away” Sign. To be clear, nothing, be it a web page or a brochure outlining rental car options, or a list of nearby attractions, should ever be “translated” into Chinese – ever.

There are lots of quick-on-the-web translation services, but they don’t have a clue about travel or airports. Or about terminology. They just take the English and change it to Chinese. That can be a huge turn-off due to the near-certainty of laughable and sometimes insulting copy. Heck, expressing air transportation and air travel to folks who speak English can be a challenge.

Our partners – familiar with the air travel industry on both sides of the Pacific – trans-create the message to get your image across – and in Chinese web format, which visually is very different than US sites.

Showing Incumbent Carriers You’re On The Team. Getting China-Welcome™ and China-Visible is not an expensive process. But it is one that displays your airport and region as one that wants the business. It’s also a vehicle to show incumbent carriers that you’re working to bring them more long-haul international traffic. American, Delta and United all have new reach into China, and they would be excited to find their domestic airports reaching out to get better known in the Middle Kingdom.

Our partners at China Ni Hao can deliver a program tailored to your airport. We’re in that process now for several clients, including building a comprehensive China-Welcome™ system for Las Vegas McCarran International Airport in preparation for their first nonstops from Beijing this December.

Check It Out – It Will Get The Attention of Incumbent Airlines. Whether it’s a deployable China-Kit™ to welcome episodic passenger movements, to developing on-hand Chinese language brochures, to developing your own website in China or just a local page on your current site, or a fully-interactive business WeChat app, CNH has the tools and professional expertise to put your airport ahead of the competition, and to show incumbent carriers you’re working to build their international traffic.

For more information, click here to get a view of how we can get your airport on the consumer map in China.

Without the need for an expensive trade office in Beijing.

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October 10, 2016

Looking At 2016 Traffic…

Fleet Shifts & Low Departure Growth

Entering the fourth quarter, Airports:USA® traffic data indicate enplanements are up approximately 4.1%. However, this will moderate in the next three months as carriers slow departure expansion.

This tracks almost exactly with the increase in scheduled capacity – 4.0% – for the same time period. However, total flight departures were only up 1.3%, reflecting airline fleet shifts into larger units of capacity.

Fleet Changes Will Continue To Alter Air Access Patterns. This points again to the need for airport strategic planning to focus on the fact that the evolution of fleet capacity and fleet capability will be a key driver in how air access evolves across the US.  It gets back to the new imperative in air access planning – the first step for communities, before any money is tossed at more “studies,” is to get a full understanding of the realities of the airline industry, as they relate to the local airport.

As we pointed out at the Air Access Workshop at the 21st International Aviation Forecast Summit, the economic capabilities of new fleets – demonstrated by the retirement of 50-seat jets – is changing how regions will be accessed in the future.

Poster-Children. As just one example, we analyzed  Topeka’s 2014 failed experience with United flights to ORD, We demonstrated the hard economic reality  that some local airports can no longer support consumer-competitive air service, when better and more travel-time efficient options exist. In the case of Topeka, the air access options at Kansas City  in all regards – travel time, schedules, and consumer choices – made the service at the local airport consumer-DOA. That’s not anything that related to Topeka – but its geographic location and airline industry realities rule out full-schedule service from a network carrier.

It makes little difference how many tickets and bookings are made in the local area – the 80 departures per day at MCI represents superior air access to what can be supported at Topeka, and that’s where consumers are going. The same dynamic applies to several other points in the nation.

Flat Fourth Quarter. Looking at the rest of 2016, it appears that the airline industry in  general will not be adding any material additional flying, although this varies between carriers….

Note that the main full-network carriers, AA, DL, and UA are as a group not adding more departures in the 4th quarter, and the capacity increase is only due to larger average aircraft size. Point: the carriers that can deliver the globe are not in an expansion mode, and will be even more focused on highest and best use of resources in the coming year.

_____________________________

China-Welcome Program Delivered At Harrisburg

BGI and its partner China Ni Hao, LLC., last week delivered a comprehensive workshop regarding the potential for attracting additional Chinese visitors to the region in 2017.

Hosted by Harrisburg International Airport, the event gathered representatives from the wide range of tourist attractions in the region. Currently, Chinese visitation generates over 40,000 annual hotel nights in the region, with guests visiting venues such as Hershey Chocolate World and Pennsylvania’s Amish country.

The workshop concentrated on the evolving nature of the Chinese leisure visitor, and the fact that the competition from other US points to capture this traffic is increasing. China Ni Hao principal Jack Lok, owner of the largest generator of China-US tours (over 500,000 in 2015) outlined how innovative marketing and more aggressive programs to accommodate Chinese visitors has paid off for venues across the East Coast.

Boyd Group International and China Ni Hao are now working with a number of community and airport clients to craft outreach programs that can capture more of this very high-spend travel sector. This spans the spectrum from a large international gateway just getting China flights, to smaller communities as exampled by Harrisburg. It’s more than Broadway they want to see.

For more information on how we can craft a China-Welcome program for your airport and region, click here.

_____________________________

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October 3, 2016

Fleet Notes

US Major Airline Turboprop Fleets – Time Is Running Out

Last week, a leasing company took four Bombardier Dash-8s to the scrapper. This may be a harbinger of some future fleet changes in the US.

The airplanes involved were very early models – among the first 20 to be built in 1985, and had been out of service for more than three years. But the reality is that at some point, the remaining <50 seat turboprops operating under major airline brands will – write this down – will – get retired. Sooner, probably, than later. Tie this with the declining economics of 50-seat jets, and the writing is in the sky regarding the future of air access levels at several US airports. This will be a real challenge crisis for a few communities – it will be time-zero to face the fact that the concept of air access needs to shift to regional from “local.” It’s reality. More jive-time “market studies” or rap sessions between airports or speed-date events won’t change it. ASD Programs: Start With The Truth, First. As we noted last week, it’s critical that small communities and their airports are fully advised on airline industry realities before they get sold a bill-of-goods consulting project to “find more airlines.” In many cases, there aren't any. Today, not to do so is as questionably unethical as a casino claiming that playing at a blackjack table isn't a game of chance. _____________________________- The Singapore A-380 Lease Return Singapore Airlines has decided to turn back to lessors its first-received A-380. As might be expected, this has the usual suspects in the media buzzing about this being another nail in the jet’s coffin. Makes a great story. But it’s off base. While sales of the A-380 have ground almost to a halt, this move by Singapore is completely unrelated to the market for the aircraft itself. The unique attribute of Singapore Airlines is that they keep a very young fleet, and Singapore as a nation has very favorable financial regulations allowing this. One article covering the matter noted that the airplane was being returned “after just ten years of service.” Here’s a flash: That A-380 was ready for retirement, based on the airline’s traditional fleet plan. The average age of Singapore’s fleet is just 7.3 years, and when the 787s operated by Scoot are factored in, it’s more like six years. So, as Simon Pickup, VP-Airbus outlined at the 21st Boyd Group International Aviation Forecast Summit, this fleet move by Singapore is consistent with their traditional fleet planning, and not a factor in the A-380 market, per se. __________________________ The Issue of US “Third World Airports” – Unfortunately, It Depends On Definition – And The Politics of The Source Remember when Joe Biden – who, let’s face it, wouldn’t know the qualities of an airport from an ATM machine – said LGA was an example of the “third world airports” in the US? Got lots of press. He was lauded for his vision, with “uh-huhs” of agreement from across the media, along with articles depicting how we've fallen behind the rest of the world. Not much substance in these stories, which usually focused on large new facilities in Asia. It was truly a cause celebre. But when Donald Trump says it, well, you’d think it’s a whole ‘nother country, with transparently-vapid media articles about how he’s flat wrong. Intelligenct people, they point out, should question this allegation – something they forgot to do when Biden blathered on about the same subject. Intelligent people should question the credentials of the media types putting this stuff out. It’s The Vision And Planning That’s Third World. To be clear, most of our airport facilities are certainly not “Third World.” Take a gander at Springfield, Mo, or Bloomington/Normal, or Sarasota, and one cannot call them anything but first rate. Yes, LGA, which was the airport wonder of the world in 1939, is a tough facility. When it was built (much of it on land fill in Flushing Bay), the largest aircraft was 21 seats. The passenger terminals were rebuilt from the ground up in 1964, and there’s a plan in motion to rebuild it again. But, at the risk of being politically incorrect, our airport planning and priorities are shamefully third rate. And, in particular, our international arrival gateways are in many cases an embarrassment. There is a valid point to be made regarding our government finding it more important to toss $130+ billion at Iran, which openly wants us dead - literally wants to kill us, than having adequate aviation infrastructure. Then there are the pallets of cash delivered in the night to Iran, like a smarmy drug deal. Yet our airports can't get a $3 increase in the PFC through Congress. If that isn’t Third World thinking, Third World planning, and Third World government sleaze, nothing is. Every American should be embarrassed. Our airport system as a whole faces huge shortfalls in finding the upgrades and expansion it will need in the next 20 years. Worse, our hub gateways are effectively “keep out” signs for foreign visitors trying to access secondary US cities. As just one example, we  pointed out at the International Aviation Forecast Summit that, because of the fact that our international hub gateways are poorly designed to handle the current and coming tsunami of Chinese tourists, instead of connecting on to secondary cities, they opt for bus tours from the gateway city. Across the nation, that costs regional airports hundreds of thousands of annual passengers. That’s Third World planning and Third World Thinking. Taking Matters Local - The Feds Can't Do It. BGI partners at China Ni Hao, LLC., are now working with a number of client airports to address this…. as well as with key tourist venues as well. From a major international gateway airport, to regional communities seeking to build more of these high-spend consumers, we are developing tailored China-Welcome programs that entail both local activities as well as digital outreach in China. Actiuvities and programs that recognize that the future is in accommodating world, not just US travelers. We’re working to counteract the effects of myopic federal airport policy in the US. If your community is interested in joining the advanced-thinking airports that are taking the initiative to international-related traffic, take a look at our services by clicking here. ___________________ September 26, 2016 Air Service Access Planning… For Small Communities, It's Time For Some Reality… ....And Much Higher Standards of Analysis At the 21st Boyd Group International Aviation Forecast Summit, a lot of cutting-edge concepts were discussed. As usual, we made no attempt at being politically-correct, or giving much attention to consensus thinking. One of the pre-Summit Workshops took direct aim at some of the misconceptions that small communities have - or in some cases, have been misled into believing - regarding air access from the global economy. The Goal Is Achieving Air Access, Not Just “Flights.”  Putting the situation in context, we focused on the thinking of America’s greatest combat strategist – General George W. Patton. His mantra was to never try to make circumstances fit your plans, because it can’t be done, and leads to certain failure. Instead, plans must be crafted to fit the circumstances. In that regard, if the good general were around today, he’d take a bazooka to many of the “air service development” programs being pawned off on unsuspecting small communities. Ignoring Unpleasant Battlefield Realities. Take a look – there are only a few airline systems today and they are all easily identified. Each has a firm tactical plan on how and where they operate. These are the “circumstances." When it comes to small communities finding access to the rest of the globe, the issue of "finding the right airline" is usually not a mystery. It's AA, DL, and UA, and in some regions, AS. Yet a lot of ASD programs, such as some “market studies” and “consumer surveys” completely ignore this . They purport to represent that just tossing “data” at an airline will get them to see the light. They often fail to disclose the limited airline options, and instead tend to imply that there are lots of options. There aren't. Take another look – typically, most ASD schemes are indeed focused on ineffectively fitting consumer circumstances into their planning, instead of the other way around. It’s all too common for a community to get a “study” that glowingly describes all the wonders of the passenger demand in the region. Jobs are growing. The economy is booming. The ARC data shows lots of tickets sold in the region. The circumstances are perfect for air service, right?. Nope. Unless these are related to the total battlefield circumstances, they are useless. A lot of these “studies” are a one-sided view of the battlefield, with wishful thinking and amateur assumptions. No hard intelligence is developed regarding the two core battlefield fundamentals in air access planning. These are: the consumer, and – critically, the airline industry. Almost universally, these are not included in the analyses. That's because in many cases, they torpedo the whole argument that air service - or additional air service - is economically possible at the local airport. Regardless of Civic Pride, Consumers Make Rational Choices. Most ASD approaches simply assume that the local consumer will flock to service at the local airport, with near-zero analysis of the comparative strengths and advantages of alternative options. Worse, most small community ASD “studies” and “analyses” and “leakage projections” completely ignore another major circumstance – the structure, strategies and fleets of the airline industry. They assume that there are lots of airlines out there, and just showing “demand” will get “scheduled flights” at the local airport. The Unshakable Reality – Regardless of Wishful Thinking. The global economy is a logistics economy, one where the resources will naturally flow to where they are most efficiently utilized. That is a solid reality too often ignored in some of the ASD programs pawned off on small communities. Let’s be blunt – these are misconceptions that are often encouraged. If many of these small communities were informed honestly and directly of the airline industry “circumstances” there would be a lot fewer “market studies” that magically conclude that service is possible, but only with more expensive consulting voodoo. The Air Service Value-Equation. Regardless of how many “studies” are done, or how many task forces are created in the community, at the end of the day, successful air service must – must – conform to a clear “Value-Equation” for the consumer. These are the attributes that drive consumer choices – and without any one of them, service at the local airport is dead on arrival. At the Workshop, we outlined the five absolutely-necessary value-equation attributes that must be in place to support connective scheduled service. These are the circumstances necessary for any successful air service. This is regardless of jive charts depicting “how many tickets are bought” in the region, or how many respondents in non-scientific surveys claim that they’ll use the local airport, The Value Equation consists of  Access, Speed, Convenience, Cost-Effectiveness, and Market-Competitiveness. They are not difficult to analyze for a given market. The sad fact is that many ASD programs ignore them completely. There is nothing pejorative regarding a local airport not being able to meet the consumer air service value equation. It is just an economic fact of life that must be accommodated in the airport’s long-term strategic planning. We’ve seen it at St. Cloud. At Youngstown. At Chico. At Modesto. At Topeka… The Value-Equation, within the economic realities of air service, simply could not be accomplished at these local airports. Other consumer options are superior to the air service levels that can be supported at the local airport. As a poster-child example, in the Workshop we looked at the 2014 experience with Topeka’s ill-fated attempt at re-establishing air service at the local airport. Two United Express flights instituted to Chicago. Lasted for nine months. The main problem: the air service options at nearby Kansas City International were far superior to what could be offered at Topeka. The name of the game is access – and the two flights at Topeka offered woefully inferior access to the drive to access flights at MCI. For passengers connecting beyond Chicago, MCI offered more convenience, less travel time, and dozens of alternative options. For example, the local service offered only one viable connection to LGA within a 90-minute connect window. Consumers could drive to MCI, and access four nonstops to LGA, and have less travel time, including the drive. Plus, there were 17 other viable connect opportunities to LGA at MCI. This is just one example. Underscoring this is the trip originations were predominantly outbound - the service was not convenient for inbound travelers. Even the demographics were a problem, with much of the Topeka catchment area being east of the city, and even more convenient to MCI. This represents the reality circumstances of Topeka. Airline and consumer circumstances result in MCI being the global access point for the region. The planning did not consider the full competitive Value Equation with MCI... a situation that, in light of fleet changes at the three main network carriers - AA, DL, UA - is essentially now permanent, at least for fully-connective local air service. The point we made in the Workshop: planning must fit the circumstances, and at Topeka, the “circumstances” of the consumer superiority of having MCI within easy drive distance were ignored. This is not to imply that Topeka can’t support some forms of scheduled service. Allegiant came and went, but could be back, for example. But in regard to fully-connective air service from the rest of the globe, MCI is now the access point for Topeka. That is not an economic detriment - it is one that should be accepted and incorporated into the region's economic planning - because it is not going to change. This is part of the new dimensions needed in airport strategic planning. Trying to recruit “scheduled” flights per se is not a sound or even focused objective. The name of the global game is access – and that’s what we have seen at Topeka – where access is MCI, or at YNG, where access is Pittsburgh, or at St. Cloud, where the 500 departures per day at MSP deliver global connectivity. More ASD voodoo, or more speed-date meetings won't alter this reality. The New Dimension In Airport Strategic Planning. At BGI, we are working with our airport clients to take advantage of the total opportunities represented by the global economy. This includes futurist tactical analyses, strategic visioning, and logistical positioning. Air access is a key part of this, but we don’t mislead clients into assuming airline industry circumstances are anything but what they are. If your community and airport are looking for planning to optimize the future, give us a call. We focus on the future. And the circumstances that will shape it. (The presentation from the Patton Air Service Workshop - which covers the current and future issues regarding ASD, can be requested by clicking here.) _______________ Monday Update - September 19, 2016 The Updates are live this week at the IAFS! ______________________________________ Monday Update - September 12, 2016 US Airline Fleet To Expand 20% In Next Ten Years… But It’s The Mix That Tells The Airport Planning Story When it comes to turbojet airliners, small is going away. Big isn’t growing much, either. That’s a quick synopsis of where US airline fleets are going in the next ten years. The economics of air travel and the realities of the airframe business point to a very different air transportation system.  The upshot is that lot of smaller communities seeing scheduled passenger service evaporate from the local airport. This doesn’t mean most will lose air service access. The reason is simple: the economics of jet airliners under 70 seats – mainly 50-seaters – are heading south. There are no replacements, and that means the structure of air transportation system in the US will also evolve. New Fleets - New Strategic Imperatives. Part of that evolution may well include the re-introduction of large turboprops to the US airline system.  That's heresy at the moment, but a dynamic that may come into play. Large turboprops – 65 - 70 seats & up. The days of 15, 19, 30 seat airliners in mainline scheduled service are over. Gone. The Boyd Group International 2017-2026 Global Fleet Trend & Demand Forecast will be unveiled next week at the International Aviation Forecast Summit in Lake Tahoe. In addition, all the major aircraft manufacturers will be discussing their views of the future as well.  It will be fleets that determine how airlines plan for the future, and this dictates how airports and communities must also plan. Globally – Need For 17,000 New Units Through 2026. The demand for new airliners is going to be very robust over the next ten years, due largely to the competitive imperative for carriers to re-fleet with up-generation airliners. North America will need almost 3,600 units to accommodate increased demand as well as retirements of older aircraft. Every aircraft manufacturer now has product lines that are materially more efficient that current-generation models. The Neo, the Max, the E-2, the MRJ, and the CSeries all represent major improvements in fuel, maintenance and other operating costs. For airlines, it’s a competitive imperative to re-fleet. Not quite the same imperative as piston-to-jet, as was seen in the 1960s, but probably a distant second. What isn’t changing is the fact that small jets are going away. Here is a fleet mix comparison. Source: Boyd Group International Global Fleet Trend & Demand Forecast 2017-2026 Note that <75 seat jets are declining to barely 10% of the fleet. That, even, may be optimistic. New aircraft in the 75 to 125 seat categories will replace them in many applications. But where an airport can barely support 50-seaters today, that's a call to re-think the region's air access planning. The economics of air service are changing because fleets are evolving. The "production line" demands more revenue to work. Uncertain: The Shakeout In Small Lift Providers.  Major airlines will need a lot fewer 50-seaters in the coming years. That puts some question regarding further consolidation of the industry segment that provides these operations - what are still called "regional airlines." although they are neither regional  nor airlines. Even in the higher capacity applications, there are no sure things. For example, Republic put 12 E-175s in storage last week. Expensive machinery to park. The Next 50-Seat Jet Is Coming... But It's Anything But Regional. More heresy. Here's a sleeper. The next big thing in airliner evolution will probably be in the sky by 2023. At the IAFS, we'll be covering it. At the IAFS™ we’ll be exploring what all this represents to airport planning. Planning With Blueprints For An Airline System That No Longer Exists. One thing is certain – with the retirement of 50-seat "regional" jets, the air service planning picture will change materially. The days of traditional “air service development” – do a study, meet with airlines, toss a grant in their lap and then, voila! get flights, are over. New planning – air access planning – will be the future.  The evolving mix of airline fleets is a factor that most of these endeavors ignore completely. Strategic Planning Is Like Warfare - Understand The Terrain or Lose. In this regard, we’re also holding a special pre-Summit workshop, The Imperatives of Patton-Like Airport Planning. We thought this would be an interesting and informative model to look at what's going on today with air access planning in the US. If the good general were around today, he’d take a bazooka to most traditional ASD approaches, because they are aimed at objectives that either don’t exist, or cannot be attained.  And they waste a lot of resources. It’ll be a fun session – as will all of the pre-Summit Workshops. Looking Forward To Next Week. We are excited to welcome the hundreds of aviation leaders to the 21st International Aviation Forecast Summit. We want to thank our hosts, Reno-Tahoe International Airport, whose staff has worked with us literally seven days a week to make the event a success. Our venue, the Resort at Squaw Creek, is now fully booked for the Summit. However, if you have not yet registered for the IAFS, give us a call or click here and we will assist in finding alternative accommodations. ________________ Monday Flash - September 5, 2016 To Start, Speaking About Air Access Planning.. Congratulations to Santa Fe in recruiting American Airlines service to Phoenix. Boyd Group International is honored to have crafted the successful SCASD grant that made this possible. We were also delighted to work with Kent Myers of Airplanners, LLC and various area stakeholders in developing the grant strategy. This SCASD grant was one of just nine awarded in 2016, and the first to produce air service results. ________________ AVSEC Fifteen Years After 9/11 96% Failure Rates. Management Incompetence No Accountability. But A Happy Congress. It's like going back in time. Aviation security today is uptight and keeping us safe, we're told - just like we would have been told back on Monday September 10, 2001. Just ask some of the pandering network reporters who will no doubt be doing retrospectives this week, probably with the sycophantic B-roll walk-and-talk pieces with Jeh Johnson. Nobody responsible got fired after 9/11 - indeed, Bush lauded those responsible. Later, the 9/11 Commission doctored out the testimony from Red Team Inspectors regarding the corruption and cover-ups in Jane Garvey's FAA security mess.  Might be embarrassing to one Party or the other... or both. Can't have that. Today,  we've seen 96% screening test failure rates. Just like before 9/11 - maybe worse. Today, there is no contingency or event-mitigation planning, as witnessed at recent terminal evacuations at JFK and LAX, where our Homeland Security procedure is to have people run from a noise in all directions, like gazelles in a thunderstorm. No plan. No anticipation.  Sorta like pre 9/11. Yet, we're told that we are safe... just like 15 years ago. And nobody is held accountable for sloppy work. Just like the day before 9/11. And, just like on September 10, 2001, Congress is quite satisfied. What's wrong with this picture? ___________ Disruptive Prediction: $30 Oil – And Lower Jet Fuel, Too At Boyd Group International, we assist clients in planning for the future, with cutting-edge forecast expertise that focuses on independent research, not the "consensus." In these endeavors, we interact with some of the most “disruptive” colleagues in aviation. The “consensus” today is that oil prices, and hence jet-A, will be going up in the next 12 months. As usual, this may be mostly group-think. Not always wrong, but it can simply represent repetition of what becomes things that “everybody knows” and therefore aren’t questioned. Oil prices are a critical part of forecasting aviation activity. So this past week we’ve spoken with Ben Brockwell, CEO of Opis, a leading analyst in the global petroleum business to get some professional insight. Some might remember that at our International Aviation Forecast Summit five years ago, at a time when the consensus concluded that $80 was the new floor for oil, Ben presented data to show that oil would likely drop below $40 within the year. This was heresy. All the experts disagreed But Ben’s data and forecast were accurate. (That tends to be a common thread among presentations at the Boyd Group International Aviation Forecast Summit. Group think is not allowed in the door.) More Disruptive Predictions. Currently the consensus is that airlines are in for some strong upward pressure on fuel prices. So, here are the points Ben made: For two years now oil supplies both for jet fuel, diesel, gasoline and crude oil have been exceeding demand, so global supplies have been growing. As recently as end-August 2016 U.S. oil supplies were at an all-time record of some 1.3 billion barrels (combined crude and finished products) There are those who believe – and you can see this from many forecasters whether they are banks, IEA, or EIA - that oil supplies are tightening and oil demand is rising so that the big oil surpluses that have driven prices down will clear up and prices will rise – to $55 to $60 by end year and 2017. Don’t bet on any of that happening, for some very cogent analytical reasons… Crude oil production in Russia, the Middle East, Africa, and elsewhere is rising and will rise through the next few months and into 2017. It will take a consumption increase of 1.4 to 1.5 million barrels per day in 2017 to clear up the surplus. However, demand projections are running to be just 1.2 million barrels per day. So that is a potential 300,000 b/d supply expansion on top of already high inventories. Going forward the equation is not likely to change – in other words oil supplies will continue to exceed oil demand and oil demand growth projections. All of this will keep a lid on prices and could even push prices back into the 30s in the fourth quarter. Not until oil supplies start to shrink and oil demand rises at a faster pace will prices go back up. That will not be in 2016  and early 2017 and may not be until 2018 now. So oil prices have a better chance of being in the 30s and 40s later this year than the 50s or 60s. That’s going to have an effect on airline strategies in the next 18 months. Leaders Don’t Follow The Pack. That’s Why They’ll Be At The IAFS. Note that this is the type of independent, futurist business intelligence that is delivered every year at the International Aviation Forecast Summit. Ben can’t join us this year, but we will be discussing the future with the executives making the decisions in aviation. Airline & Air Service Trends. We’ll be talking with CEOs and senior executives from American, United, Delta, Frontier, and more. Interactive discussions, not just presentations. International Interaction. We’ll be exploring how the global economy will affect airports, communities and all areas of aviation, again, one-on-one with industry leaders from around the world. China – The Global Mover – Even In Rural America. We’ll be outlining how China and the Chinese economy represents opportunities for US airports and communities. We’re presenting the first Airports:China™ air traffic forecast, and, along with experts from China Ni Hao, we’re holding an exciting pre-Summit Symposium on how communities can develop this new revenue source. This is in addition to discussion with senior executives of Air China and Hainan Airlines. Get Ready For The Next Disruptive Airliner Platform. And speaking of heresy, we’ll be looking at how supersonic airliners will be changing international air transportation in the next ten years. Boom Technologies will be at the Summit, and it will be eye-opening. If you haven’t registered yet, click here for more information and take a look at the exciting agenda. Join your colleagues September 17-20 at Squaw Valley and get a jump on the future. _______________ ________________ Monday Flash - August 29, 2016 China Visitors: Coming Soon To An Airport Near You... Or, Yours, If You're Prepared Xiamen Airlines announced last week that they will be starting nonstop service to New York/JFK… from Fuzhou. Now, think about it – how many folks in the US have a clue who Xiamen Airlines is, not to mention where Fuzhou is. (Or even how to pronounce the name. It’s Fu-Joe, by the way.) But next year, they will have flights to the Big Apple. Similar to new flights initiated in the last two years by Hainan Airlines, the prospects for Xiamen in the Fuzhou-JFK market are incredibly strong, Of note is that Fuzhou is not one of the largest airports in China - far from it. But Xiamen Airlines has ascertained that there is strong traffic potential from this provincial capital across the strait from Taiwan. And there are a lot of airports higher up the list that have US traffic potential, too. Source: CAAC Data Analyzed By Aviation DataMiner This is just another example of how Chinese tourism and Chinese investment will re-shape international travel patterns in the US. BGI and our partners at China Ni Hao, LLC are now working with a number of airports in preparing their China outreach and air service strategies. Being China-Welcome(TM) will be critical as more and more of these visitors opt to connect to secondary airports to start their US itinerary. Plus, carriers such as Xiamen, China Eastern, Beijing Capital, Spring, and others will be looking beyond LAX, SFO, JFK, DFW, etc. as access points. Forget the saber-rattling in the South China Sea – Chinese love the USA. They love the Thousand Islands of New York… Yellowstone… Pennsylvania Amish Land… Bar Harbor... Milwaukee and Harley-Davidson… And they are big spenders, too - over $400 per day, exclusive of travel. Big time economic impact. We'll emphasize it again: in the future an increasing percentage of these folks will be connecting to secondary US airports, instead of the traditional motor coach from the gateway city. This is an opportunity for airports that get not only prepared, but have an aggressive, but cost-effective presence in front of Chinese consumers. It's what we do for our clients. Join Us At The Summit & Get The Edge On The Competition. On September 17th, BGI and its partners from China Ni Hao, LLC will be presenting a special Workshop that outlines the scope of the opportunity and the importance of implementing a China-Welcome™ program. We’ll talk about things like communication touch points (CTPs) and deployable China-Kits™ to welcome episodic group movements. The experts from China Ni Hao will be outlining how a cost-effective WeChat presence in China can not only showcase your airport and community - right in the pockets of millions of consumers - but could be a revenue source, too. Plus, we are honored to have Mr. Hou Wei, Vice President of Hainan Airlines at the event to outline what his airline looks for in expansion markets. The Workshop is part of the optional pre-Summit events on September 17 and 18. In addition, we’ll also be unveiling the first Airports:China forecast of air traffic from key points in the Middle Kingdom to destinations in the US. If you haven’t reserved you space yet, click here for more information on the Summit. ___________________ Monday Flash - August 22, 2016 The Changing Utility of Air Travel... One of the more unfortunate aspects of many traditional ASD approaches is that they ignore the fact that the utility value of air transportation is changing. As a mode of communication, scheduled flights have a different role in the mix compared to ten years ago. The Track Record Is Clear. But Ignored In ASD Schemes. We could point to airports that have lost scheduled service not because of lack of community involvement, but because of changes in the air transportation system itself, compared to other communication options. The truth is that at many smaller communities, scheduled air service at the local airport is simply not as time-effective or consumer-acceptable as the drive to a distant airport and boarding a better-timed flight. So, that's why traditional ASD schemes to revive or retain local air service at small local airports often fall flat on their faces - because the effectiveness of the two flights at the local airport as a channel of communication with the rest of the world is inferior to other options. We've seen it at Topeka, at Chico, at Modesto, at St. Cloud. And other places. All that's happened is that the consumer is using other airports - or other communication modes outside of air travel. It's Economic Gravity. Most recently we've seen it at Youngstown, where  service with an independent-brand operator to ORD - scheduled (incredibly) some days with a single flight- cratered in six weeks, with the community out $120K. Consumers had more convenient and wider options by driving to Pittsburgh, compared to one independent-carrier flight a day. The point is that air access is not about local flights. It's about the utility value of the air service. Big Markets - Value Shifts Here, Too. But this dynamic - the change in the value of air travel v other communication options is in play even in big markets. Using Aviation DataMiner,  we took a look at three traditional air commuter markets, and the traffic changes between year 2000 and the year ending 1Q 2016... Let's start with LGA-BOS - the poster child for air shuttle markets. It's down  a whopping 70% in traffic, with fares up close to 60%. To be sure, the improvements in Amtrak have taken some of this, particularly in light of the dimbulb management of the TSA process at airports. But it makes the point: air  travel is not as viable as a communication tool. But it's the same in other markets, too. We looked at two traditional commuter markets from the DFW Metroplex, and the trend us the same... Austin-Dallas (both airports) has lost 40% of its traffic... SAT isn't far off, either. Several reasons for this - the time  and hassle of the (supposed)security process at airports, increased cost of using air travel, and alternative communication channels, such as electronic meeting capabilities. The point is this - and it's one that traditional ASD approaches miss entirely - the utility of air transportation has changed, and the airline systems that deliver it have materially evolved, too. Intra-Regional Service: Challenged. In our presentations, we use Albany International as an example of the shifts in the structure of the airline industry. In 1981, ALB had @800K passengers. Lots of regional service to places such as Boston, Islip and Buffalo. The longest flight was to Washington. Today, ALB has almost 3 million passengers. But the mix of air service is entirely different - while there are flights to many more destinations, the ability to get to Buffalo is now focused on the New York Thruway. What's changed? The entire air transportation structure. More to Come... If you're interested in exploring more of what we can expect in regard to air service access, join your colleagues at the Boyd Group International Aviation Forecast Summit, September 17-20 in Lake Tahoe. In addition to the great line up of airline CEOs and executives, we also have a pre-Summit Workshop, The Importance of Patton-Style Airport Strategic Planning. It cuts to the chase regarding air service access planning for the future. General Patton demanded that plans always fit the circumstances at hand, and adjust constantly. Toss out "the book" and pre-conceived notions. It will cut new territory - and take no prisoners. Click here for more information and to register. ________________________________  

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.

Nope.

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 www.ChinaNiHao.com.

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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.

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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.

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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.

With hundreds of immediate reports -analyzing fares, yields, traffic flows, capacity, load factors, route performance and forecasts, Aviation DataMiner outshines any other source.

For a free trial, click here. We can have you on line literally in minutes!

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…”

Yikes.

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 www.ChinaNiHao.com. ________________________ 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 www.ChinaNiHao.com 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.

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.

Monday Flash – August 15, 2016

Global Carriers – Breaking News:

Your  Premium Passengers Are Up For Grabs

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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August 1, 2016

IAFS Forecast Flashes…

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

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

Among the many forecast points that will be covered…

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

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

Sites of terrorist attacks.

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

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

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

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

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

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

New Fleets – New Opportunities For Mid-Size US Airports

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

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

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

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

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

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

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

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

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

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

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

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

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The IASF™ App Is Now Up And Available

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

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

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

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

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

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

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To Start, Air Access Updates…

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

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

Stand by. More to come…

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Congratulations, Las Vegas.

America’s Only Truly Functional China-Welcome™ Gateway

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

A notable event, one year ago.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In the meantime, congratulations to Las Vegas McCarran.

Don’t Just Talk About It…

Get Ready To Experience The Future

At The 22nd Annual

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

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

Two Days of Exploring The Future…

Real forecasts – And Real Planning Insight

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Plus: the popular “View from Wall Street Analysts”

Plus: fleet trend forecasts from global aircraft manufacturers

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

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

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

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

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

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

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

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

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

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

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

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

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

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Let’s Talk About Real Airport Data

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

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

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

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

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