Anticipation v Reaction
The China/CCP Pandemic Has Changed Aviation Permanently
We’re outlining the raw facts this week for one reason: Recognizing and anticipating realities, instead of reacting to them, is the difference between taking control of the current situation, or just waiting to see what the future will bring, and then reacting to it.
There is no post-CCP-Covid game plan, and the old one is obsolete. This is what will define industry leaders.
Okay, let’s go back to last February & early March… it now seems like years ago:
The airline industry was booming… The USA had a red-hot economy that engendered travel demand…
Record profits for carriers around the globe…
Air passenger traffic was at record levels…
We could travel freely. Indeed, the Mayor of New York City and the Speaker of the House of Representatives were urging us that there were no problems to fear from the CCP-Covid virus, and encouraging citizens to go out and socialize… (That’s a fact – check it out.)
Air service expansion was still in the cards at most mid-size and larger airports.
Suppliers – Boeing, Airbus, Embraer, as well as thousands of component manufacturers – were seeing a bright future, the Max situation notwithstanding.
Then the China/CCP Covid virus arrived. We can’t ignore it anymore. the wreckage is all around us. As we pointed out at the recent International Aviation Forecast Summit, the air transportation has been economically nuked.
The China/CCP Covid disease is reportedly continuing to spread, albeit (thankfully) in the USA apparently without as much need for the hospital beds and ventilators as originally envisioned.
States and cities are again beginning to implement “restrictions” – often with not a clue whether they work or not. All they know is that they are getting reports of the China/CCP Covid spreading…
International traffic demand is decimated. Countries across the E.U. are still closing down, there is no sign that trans-Atlantic traffic – and the domestic U.S. feed it generates is coming back.
And as BGI alone has pointed out, traffic to and from the geographic and government source of this global pandemic – China, run by the criminals at the CCP – is toast. That won’t be coming back, even if the Covid disease is controlled there, which, by the way, it is not. That’s about seven million O&D gone like the dodo and, again, the domestic feed and traffic it supported.
Changes In Airliner Missions: A380s have about as much market demand as a litter of stray kittens. Qatar has grounded its entire fleet. Emirates is trying to figure out what to do with theirs. HiFly, which tried to operate a used 380 in charter service, has given up on the endeavor. In the USA, it’s a leadpipe cinch that a whole lot more 50-70 seaters are headed for the knacker.
Constricted Travel Demand. Consumers face the uncertainty that if they travel, the services at the destination might not be open and available. Not to mention ad hoc quarantine requirements. Result: choked domestic travel.
Over-Fleeting. The U.S. airline system is facing a long-term situation where not only do they have fleets that are at least 20% larger than needed in the foreseeable future, but also may have fleet mixes less efficient for the new, truncated air transportation system.
This isn’t a temporary set of circumstances. The air transportation system in the USA and the world will adjust – but it won’t look like it was a year ago.
Take Charge of The Future… Anticipate And Agressively Plan – Based on Hard Forecast Facts
At Boyd Group International, we are providing our clients with the data and perspectives they need to identify not just these types of changes, but the many corollary effects they will have.
- For example, the effects on revenue streams from on-site aeronautical-related operations, such as aircraft and component overhaul, FBO volume and other businesses. The changes in airline fleets and over-fleeting need to be anticipated, based on clear understanding of the trends at hand.
- The effects of new and expected changes in airline strategies and route planning. Within the next 90 days, and certainly by the end of the 2Q of next year, the US airline industry will be very different… they can no longer mark time waiting for a return that will support their pre-Covid resources. Every airport will be affected differently… and this means understanding the specific vulnerabilities, and, yes, opportunities the new business environment represents.
- There will be changes in general and business aviation. Recreational GA is likely going to be a fraction of its already shrinking sector. Business and executive aviation is a mixed bag. Truncated scheduled air service will in some cases benefit this area. But it’s an open question regarding the future demand levels for intercontinental business jet flying. Again, every airport is different.
- Forecasts. We develop real-world, anticipatory traffic and operational forecasts for our clients, based on the new realities. BGI is the leader in identifying emerging trends and their effect on aviation demand. In particular, every commercially-served airport needs now to review pre-Covid enplanement and operational assumptions. Bank on it: they won’t be what was expected in the Master Plan, because they were based on an aviation system that no longer exists.
These are just examples of the Runway To The Future program. We’re already working now with a number of clients to craft clear planning within the known and expected fallout from this pandemic that has and will continue to dismantle the traditional underpinning of our air transportation system.
There’s a lot of aspects and all airports are different.
So, let’s talk… click here and simply suggest a time that works for you. Then take a look at the Post-Covid Programs page on this site. We can have a great conversation that will illuminate the future.
Anticipate – don’t react. Let’s get moving together!