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 23^rd 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.

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.

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 21^st, 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!

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.

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.

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.

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.

Definition: Unhinged

uhn-hinjd

1. Unstable, off-balance, uncertain, disconnected from past options,
2. 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.

12March5Face 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.

12March3In 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.

IAFS 350What 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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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.

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 23^rdInternational 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.