Monday Update – May 4, 2020

Before We Start This Week…

CCP-COVID Damage Estimates

It is now clear that the U.S. government, as well as those in Australia, Germany and the U.K., will be taking off the gloves and going after the CCP in China to recover losses from that organization’s total coverup of the Wuhan-originated virus.

The CCP – Chinese Communist Party – is essentially the un-elected government of China. And, globally, there are lots of assets that are connected to the CCP. They are now in the cross hairs of governments across the world.

At some point, and in some manner, there will likely be some mechanisms for public entities, such as airports, to pursue damages.

We are assisting airports in determining the traffic hits due to the CCP-COVID pandemic. It is important that when the time comes, airports also have a clear and defensible estimate of the financial hit this has caused, and be able to – through whatever systems are established – file for recompense.

Give us a call or email and we can discuss.

For more insight and intelligence on the evolving CCP-COVID scandal, check out the Intelligence tab at

Unlike other information “sources” on China, we don’t have the intellectual constraints of an office in that country. A lot of these “sources” have to walk a careful line to assure their staff and businesses in China are not “affected” by government actions, should they say something not in line with the CCP.  Click here to explore.


Future Factors To Consider…

The COVID pandemic has changed everything.

Air travel economics, airline strategies, airport facility needs, consumer trends, new multi-mission airliners – everything in air transportation will have a new playbook. And from the wreckage brought by the CCP-COVID epidemic there will be new opportunities.

The old assumptions and planning metrics no longer apply.

Fleets. Move to the middle. It will be multi-mission 737MAX, A321neo and A220s that will emerge. Airlines will have different fleet mixes that will shake traditional route planning to its core. Fewer widebody airliners, a reduction in smaller 50-70 seat airliners. This will change how airlines approach route planning. Within these new strategies, the term “air service development” will be shifted to “air service retention.” It will be highest and best use of resources.

Post-September Restructuring. Standby for uncertainty. The CARES money is intended to preserve pay for airline employees through September… employees that, based on current demand, are largely redundant. It will depend on the rebound in the economy regarding what airline systems will look like after the CARES program ends. It is not beyond the realm of possibility that there will be only limited reductions in labor force. All depends on how rapidly the economy comes back.

More Regionalization. At least to some degree. All of the four main network systems have indicated that they will emerge smaller. Combined with new fleet mixes, this means concentration on fewer regional feed spokes. DOT programs such as SCASD, which is intended to preserve the past, will be even more obsolete. New airline focus: revenue concentration, not rural route expansion.

Consumer Travel Demand Patterns – Longer Not Shorter – There have been some prognostications that the new air  transportation system will give rise to more short-haul, close radius O&D air travel demand. We would submit that this is nonsense. Increasingly, air is less and less time-efficient for short-haul transportation. The coming excess of small jets will put a strain on demand for parking space in the desert, not more intra-regional flying.

International Traffic – Opportunities. By the end of 2021, alliance hub operations in the E.U.  and U.K. will be prowling for more trans-Atlantic feed. With new fleets of multi-mission narrow-body airliners, it will be secondary, non-hubsite commercial centers in the U.S. that will be in the cross-hairs of planning departments across the Pond. This was already in play before the CCP-COVID pandemic, but will gain more focus in the next 24 months.

Excess Airliners Around The Globe. Messing up the demand for new jets, basic math indicates at least 2,500 economically-viable airliners will be on ramps and in the deserts across the globe. The potential for new entrants is probably less than it would appear, but it will depend on regional economies.

A New Playbook. The conclusions are clear: pre-CCP-COVID planning and strategies are out. Airlines will be different in structure, and the consumer base will be, too.

There are a lot more factors and fallout to consider… airports will have different  facility needs. Consumer travel patterns will shift, and in some cases evaporate. Suppliers will need to adjust to the fallout caused by the changes in airline fleets. And more…

Get Prepared For the New Future… These will be just a small part of the range of new dynamics that we’ll be exploring with industry leaders at the 25th International Aviation Forecast Summit, August 23-25 in Cincinnati, USA. We will not be rehashing what has taken place – we all are aware of that. Instead, we’ll be illuminating the new future that each sector of the industry will be facing.

Click here for more information regarding the reasons industry leaders will be at the only aviation forecast event… and writing the new aviation planning playbook.