Update – September 24, 2018

The Media Vox Deorum

”..A new survey of hub connectivity shows that American Airlines operates hubs at three of the top four most highly connected U.S. hubs…”

Nice they picked those “connected hubs” to operate a hub.



China’s Tough Tariffs On US Airliners – Boeing’s Lovin’ It

A bit of reality.

Just in the past week, no fewer than a dozen new Boeing 737-800s were delivered across a customer base of eight Chinese airlines.

In addition, Shanghai Airlines received its first 787.

According to the prognostications of some experts last year, this should not be.

When President Trump implemented tariffs on some Chinese products, the folks in Beijing responded “aggressively” by supposedly implementing a 25% tariff on American airliners.

Some of the usual suspects in the media declared it was game-set-match for China and effectively warned about the need for massive expansion of the unemployment offices in the Seattle area.

Airbus, according to some of the “experts,” was fixin’ to see a flood of orders, while Boeing would now be shut out of the China market.

Gee, it didn’t turn out that way.

It’s All In The Fine Print. See, when China announced the tariff program, it took real media aviation experts, like Dan Reed, about fifteen minutes (assuming he took time to have a cup of coffee first) to illuminate that the imposed duties were based on airplane weight. And, carefully, the Chinese government put the limit at just short of the 787-800.

To the veneer analysts, China’s actions looked like a tough move. But in reality nobody in China has ordered -700s in years. (Matter of fact, some of the ones that were in China are now back in the US, acquired by Southwest.)

So the whole thing – like a lot of these retaliatory moves – was, at risk of cultural mix-and-match metaphors, Kabuki Theater.

Most of The Fleet Is New. Most of The Airliner Demand Is For Internal Growth. We just completed our 2018 Airports:China™ forecast, which again illuminated the incredible need for more lift in China.

Between 2013 and 2018 – just five years – passenger traffic at Chinese airports increased by over 68%. In 2018, we’re looking at another 8.6% – 10.3% according to our projections.

As we pointed out, China needs airliners. Big time. And they have no intention of cutting the flow – from any source – some media reports notwithstanding.

Trying to understand the China market requires adult supervision.