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With the devastating effects of the CCP-Covid pandemic there is no longer any question that the air transportation industry will not be able to "rebound" back to what was expected in 2019.
With this virus continuing to exist and with completely uncertain approaches to dealing with it, the communication modality that was air travel as recently as last March will have a very different future. Airports, communities and regions must move aggressively and rapidly to adjust to the new environment and plan for a very different business environment. As noted below, there will be no quick "rebound" and that demands airports and communities completely re-visit and re-think near term and long term planning.
This is the foundation for a new program that Boyd Group International is providing for its clients.
Runway To The Future is a strategic planning program, tailored to each client's specific air service and aviation factors. We identify the specific shifts and business changes that airports will be facing, including the direct and the corollary secondary fallout of an airline industry that will be much smaller and very different in the future/
Airports need to move aggressively and affirmatively, and fast.
This is not another "market study." It is instead a comprehensive strategic blueprint for the future.
We can no longer depend on past data or even recent trendlines. The post-Covid air transportation system will be materially different. Airline strategies have changed. Airlines have made clear that they will emerge from this crisis in a smaller, more compact structure, and with new fleet mixes.
This makes it imperative that strategic planning be restructured for this new operating environment.
Boyd Group International accomplishes a complete analysis of your airport's current competitive situation within the known and expected changes in aviation. It’s more than just air service. It includes the shifts we can expect in your airport’s entire revenue stream system. General and executive aviation sectors are also changing. Consumer expectations and travel demands will not be the same.
The Runway To The Future Program delivers a new and comprehensive strategic overview, based on the future, specific to your airport. airline industry, within its geographic region, and within the strategic planning of both incumbents and potential new entrants.
Within this, we review the known and expected trends that will have a bearing on enplanement and air access levels at the airport. We provide a detailed report with recommendations regarding air access strategy and airline outreach.
The final report is a clear outline of the future traffic trends at the airport - domestic and international - and where new or adjusted planning strategies are indicated.
The program entails approximately 45 days to complete, and includes an on-site delivery of the findings.
Here are a couple of very tough aspects that must be accepted and for which new planning must be explored, if communities are going to remain air-connected to the future global economy:
Massively Reduced Air Traffic Volume. Because of on-going and often confusing "reactions" to the situation that vary state-to-state and community-to-community, consumers are discouraged from attempting travel. Local lock-downs, business restrictions and even on-arrival quarantines are prime reasons travel is down.
In point of fact, our forecasts indicate that between 2021 and 2025, U.S. airports will experience 1.5 billion fewer enplanements than what was conservatively forecast just last march. That is 1.5 billion fewer people going through terminals and boarding flights. Put a pen to that from any aspect, and the financial implications demand that airports, vendors and suppliers immediately begin to re-plan for the future. BGI's established forecast expertise and strategic solutions approaches in the Runway To The Future program will assist in these efforts
Thousands Fewer Airliners - And Different Fleets, Too. The U.S. airline industry is facing a situation where they have more airliners that they will need in the immediate future. As of October, 2020, there are effectively over 2,200 airliners either parked or materially under-utilized. Losing tens of millions a month, airlines are now re-planning their entire fleet mixes for the future. Watch for more retirements across the fleet spectrum - including hundreds of 50-70 seat jets, plus some long-haul wide-body units. This will not only affect airport facility needs, but also the entire airframe maintenance and support industry, which are key parts of some airports' traditional revenue stream.
Every airline will be pursuing its own strategy - there is no one-size-fits-all. That means that every airport must consider its own specific plan for the future. At BGI, our Global Fleet Strategy & Demand Forecast programs are a key advantage in that they reflect known and expected changes in fleet planning.
We would point out that at the 25th Annual International Aviation Forecast Summit, October 11-13, the BGI ten year global fleet demand was within 2.5% of that presented by Boeing. We have strong strategic understanding. This is one of our strengths in assisting clients anticipate the future. Airline fleet mixes will be different in the near future, and so will the missions they operate. This is a core part of the strategic approach in the Runway To The Future program.
Revised Route & Hub Strategies. With air traffic demand expected to continue to be down from 2019 in double-digit percentages, airline systems will revise how and where they fly. The good news is that some of this will be re-directing resources to new revenue opportunities, as well as new mission applications possible with revised fleets. The troubling news is that a number of smaller airports and particularly metro-peripheral airports are in the planning cross-hairs.
To manage expectations, analyses by Boyd Group International indicate that among non-subsidy small airports that had strong traffic pre-CCP-Covid, very few are likely to lose all air service connectivity. But instead of having flights from all three major network carriers, there may be only one or two. Or flight frequency will diminish materially. The key point is for these airports to understand and anticipate incumbent potential strategies and plan proactively. The challenge is in identifying these shifts even when the airline itself is not sure.
New Logistics Opportunities. Aside from all the confusion in passenger traffic, air freight is the new giant future opportunity for airports of all classifications. Already in place before CCP-Covid, the trend has accelerated. Historically, air cargo was used for goods that intrinsically needed to be moved quickly. Today, air cargo is being used for goods that consumers want to move quickly. Before it was just perishable or high value items. Today, with Amazon and other channels, it's coffee-makers and cosmetics and clothing that the consumer can and wants to get right now, toute suite.
BGI believes that this new logistic dynamic will be percolating down to smaller airports across the nation. It is a key part of any future strategy revies
Runway To The Future - A Tailored Strategic Analysis Program
At BGI we've already assisted clients in crafting new planning to not only deal with the CCP-Covid damage, but to identify where immediate planning action is needed and to understand the shifts in air access that may result. Each program is tailored to the specific airport client.
Concise and Intensive Review of Air Service Structure
We look at the incumbent service in light of known and expected planning and fleet shifts at each carrier. We look at pre-CCP-Covid traffic and revenue performance and relate these to changes expected at the airline. From that, recommendations are developed for pro-active plans to address each situation, including assuring the civic leaders and the public are kept fully informed. Informational vacuums can be very distracting.
We review the expected airline route and market strategies, particularly within the region of the client airport. Air carrier performance at other airports can be a factor in capacity planning, and it is therefore critical that the client airport be armed with facts to provide incumbents on a proactive basis. In airline route planning, a community that is out of sight is more likely to be out of service, too
Today, every part of the U.S. aviation industry needs to re-think, re-plan, and re-strategize.
Our focus is on working with clients to develop not just new thinking, but new perspectives in regard to the future. The devastating effects of the pandemic on American aviation are demanding that traditional assumptions be examined in detail. That’s where we come in.