This Week…

Watch For Falling Route Systems

Inflation – or, the anticipation of more of the same – has apparently hit the route planning departments of most major airline systems.

It’s not just short haul feed routes, or the proximate dynamics that induced SkyWest, American and Delta to announce pull-backs from almost 50 such markets, all operated with 50-seat jets. It’s all about inflation and fuel.

The ax is now falling on longer-haul markets, both domestic and international.

Do your own media search. JetBlue is yanking – at least pro-tem – a number of transcon routes. United has announced a number of international markets that won’t be operated as planned.

The lightweight sections of the media will attempt to paint this as the outcome of a pilot shortage. The reality is a forecast for a revenue shortage to cover what will be skyrocketing fuel costs.

This is not as temporary as it might be painted. There are no dynamics in play that will materially reduce oil below $100 per barrel. In fact, the inhabitants of the White House and the top seat warmers at the Department of Transportation have made it clear that squeezing oil prices will force people into using electric vehicles.

It’s a dimbulb policy, but it is now translating into higher costs for everything.

Over the next four weeks, plan on more service reductions and a squeeze on fare levels.

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And, Speaking of Electric… Think Again

The Airline Industry Is Heading For A Colossal Brick Wall

The rush toward electric air taxis and small “commuter” airliners is all the rage. New transportation modalities are on the way, according to the breathless news stories.

The only leeetle question is simply whether there will be motive power to turn those oh-so-clean and not to be questioned electric aircraft. We just covered this in our latest Aviation Unscripted video… hard questions that apparently we are not allowed to ask.

In this week’s Aviation Unscripted video, we cross the politically correct line and ask these questions.

Anybody done professional hard planning of the sourcing of batteries? Or, the proper use of same?

Gee, If there’s a fire, traditional CFR isn’t effective… so, is it a hazmat problem? How about disposal of these things?

Lithium-ion batteries are not as recyclable as the ones that start your traditional automobile.

Here’s a bit of rain on what has become a gigantic naked emperor show…none of those issues have been properly addressed. Remember, battery power is no more “sustainable” than is petroleum. It comes mainly from minerals, and regardless of whether they are recharged from a coal-fired generation plant or a flock of tooth fairies, their entire life cycle, as it stand today is not “sustainable.”

But it sure is trendy… sort of the official projections of atomic power in the early 1950s.

The result may be not too different, unless these major issues are addressed.

Click here – invest 8 minutes that will challenge a lot of traditional thinking.

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Quick Note:

A few sections of the media may be in full non-factual swing this morning.

The tragedy of the China Eastern accident did not involve a 737Max. The CAAC has yet to approve these aircraft for use.

Just an FYI… no telling what some sectors of the Fourth Estate may report. Already, the New York Times has inaccurately commented in a crash-related article that Chinese airlines are again ordering 737Max airliners. The fact is that there has not been an order – or a delivery – to a Chinese carrier in over two years. Caveat reader.

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Air Travel Forecast: Mixed Messages

As of March 21, the Airports:USA® system is projecting a much slower growth in 2022, due to the expected effects of increased inflation, higher jet fuel costs, and a respondent decline in leisure travel demand.

Like, around 60 million fewer enplanements than projected prior to the latest inflation trends.

Airlines are adjusting capacity downward. Instead of being at @ 90% of pre-CCP-pandemic 2019 levels, it is becoming clear that the figure will be closer to 85% or less. This means USA airports can expect to see approximately 820 million enplanements for the full year, down from just under 900 million.

Logic May or May Not Apply… It’s only logical that discretionary spend will decline when consumers are facing massive inflation, and airline capacity trends are reflecting this. That much said, other travel sectors such as the hospitality industry, are reported (key word, reported) to be seeing no decline in demand. If that’s accurate, the airline capacity cuts, combined with 5% to 10% increases in average ticket prices (as Delta Air Lines has warned) and we’re looking at some very confusing counter-factors.

Best guess now is the hospitality industry is lagging the dynamics facing air travel demand.

Point: we’re still projecting that year 2022 won’t be as robust as pre-inflation data indicated.

Where To Anticipate Changes. First, with jet-A going up, that will make the viability of the now-declining fleets of 50-seat jets at major airlines go into a nosedive. American, Delta, and United will likely move with lightning speed in making fleet changes.

Consolidation Of Access. Concurrent with this will be a definite reluctance of major carrier systems to enter or expand at smaller communities, with or without incentives. Fewer airplanes mean less expansion

New Entrants = More Regionalization. The recent expansion announcements by Avelo and Breeze should be considered closely. Note that none of the new markets at these carriers are at small airports. To the contrary, these will cause additional regionalization. The poster child for this is Norfolk… the Breeze expansion there will put PHF further down the air service development food chain.

Get Ahead of The Planning Curve With A Professional Forecast From Boyd Group International. These changes are coming in rapid order. This means the dynamics of air service access at every airport can shift radically and quickly. An Airports:USA forecast subscription from BGI can deliver up to the minute enplanement and air traffic trend forecasts for each of 172 airports. With this data, airports have a view of the future, instead of having to rely on old data that are based on an airline system that no longer exists.

Give us a call, or simply hit the contact button, and we’ll be back to you ASAP.

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The SkyWest/EAS Scramble –
Indicative of The Need For New ASD Thinking

As BGI noted in its most recent Touch & Go™ client newsletter, the charge is on at several EAS communities to find replacement carriers for the pending discontinuance of service provided by SkyWest/UAX.

The unfortunate part of this is that some of these communities are simply looking for an airline, and not for air service access. Somehow, the concept of “commercial service” is satisfied simply by having somebody – almost anybody – with an airplane to operate scheduled flights at the local airport.

The reality is that these communities had about the best service possible with SkyWest/UAX. Full “membership” in the United Airlines system… part of that carrier’s global network, right along with New York, London and Tokyo. Access to Mileage Plus for customers. With SkyWest as the operator, the service was about as reliable as the hand of man could make it. The best of all worlds.

And it is going away. There is nothing that can fully replace this level of air access. The challenge for these communities is an opportunity, actually – now is the time to reassess and rethink their airport’s role in the regional economy and within the new communication network.

But that’s not happening.

Take a gander at some of the media stories coming out of a few of these affected communities. The goal is to “find another airline” – instead of focusing on the air service access needs of the region. The objective is just “flights” instead of hard determinations of the opportunities, challenges and options for the region within the new communication channels that are emerging.

Some of these airports – a number of which had EAS load factors well below 50% – are going to attend “speed date” conferences, ostensibly to speak to multiple airlines in regard to replacing SkyWest/UAX.

No doubt some will be ably assisted by the usual suspects providing the data and documentation to show the value of the EAS market. But it makes a great story – the civic leaders are going to an event to pitch the airport to lots of airlines. Truth be known, most of the carriers at these hoedowns wouldn’t touch an EAS market with a barge pole.

Don’t Need A Map To Find Replacements. The operators that are in the EAS play – such as Contour, Denver Air, Southern Airways Express, Boutique, etc., are known and obvious. They’ll make the determination if they want to bid – it’s no mystery who the targets are. But for these affected communities going to some speed date event and blindly whacking away at the hypothetical air service pinata, hoping the right carrier will come falling down, is a waste of money.

We did a recent Aviation Unscripted video on this subject, in which we outlined the four foundational planning criteria absolutely necessary to determine any air service outreach.

It’s eight minutes of direct and unvarnished facts of small community air service life, whether it’s a small rural airport or an international gateway. Blunt, but accurate.

If you haven’t done so yet, click here to go to our Aviation Unscripted video channel and take a look. Any questions, comments or input are always welcome.

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Coming This Week…

Electric Aircraft – It’s Time To Cut Through The Euphoria. They’re non-polluting! They’re quiet! They’ll open new transportation channels! And they may ultimately be sitting dormant for want of motive power. This Wednesday, March 23, a new Aviation Unscripted video will ask some hard questions regarding the issue of electric air taxis and electric regional airliners. Questions that nobody seems to want to ask. Log on to our channel by clicking here.

Boyd+Swelbar Unvarnished. Thursday March 24. Okay, the gloves are off. Bill Swelbar and Mike Boyd will be taking 20 minutes to irreverently discuss aviation issues that are front and center. Insights and perspectives that are ignored or are politically off limits. The agenda intends to look at trends and strategies in rural air service, the potential effects of inflation on traffic, how communities can prepare for emerging fleet shifts, and take some carefully-aimed assaults on some of the groupthink going on in aviation. That’s this Thursday. Log on to the channel by clicking here.

Small Community Air Service Access Loss:
The “Pilot Shortage” Is Just The Messenger

Last week SkyWest – operating as United Express – announced it wanted out of Essential Air Service contracts at 29 airports.

That’s 29 small community local airports. The DOT will be soliciting air operators to replace United Express flights.

The only fly in the EAS ointment is that there will be no replacements. There may be some fine operators tapped to replace SkyWest, but they won’t replace the air service that was provided by United Express.

It’s not just an announcement. It’s yet another indication that regionalization of air access is akin to gravity… it can only be delayed so long.

Consumers in any case won’t use air service that doesn’t at least deliver true connectivity to the rest of the nation. SkyWest/UAX did that. Unfortunately, in the majority of these deleted markets, even that didn’t deliver consumer-competitive air service. The load factor performance is clear proof.

Now, the fact is that there are no other operators that can replace what UAX offered. American is out – it’s cutting small community routes as we speak. Ditto Delta.

Let The ASD Rituals Begin. So, despite lots of civic hubris, and the indignant local congress reps jumping in their water dishes, plus the usual-suspect consultants closing in with crocodile-tear proposals for more studies and more meetings and more surveys, the truth is that there are no entities that can deliver what the United Express service did.

So, we’ll start with this blunt bit of truth… it is very unlikely that most of these airports will see replacement service anywhere near the quality and connectivity of what SkyWest/UAX offered. From the service perspective, it is mostly downhill from here… at the local airport, that is. Not necessarily for the local consumer, who at many of these affected communities has been using other air access options, anyway.

This is an opportunity for these communities to re-think the future, instead of being misled into the fantasy that air service consumers won’t use should be the new goal.

Blame The Pilot Shortage – But It’s “The Why” This Was A “Shortage” Target. As with just about everything else unpleasant that takes place in aviation today, it’s all the fault of the pilot shortage. See, according to the Regional Airline Association and others, if we had more pilots, these service deletions would not have taken place.

That is sheer misleading nonsense. Let’s remember that these EAS markets are cost-plus for the operator. But in a shortage, the highest and best use of resources is the #1 consideration in business planning. That’s where EAS flight applications got into the red-pencil crosshairs… those scarce pilot resources were flying a whole lot of sailboat fuel, instead of passengers. So, even if there were pilots banging on the airline’s door, it doesn’t change the fact that much of this EAS flying is a national waste embarrassment.

Trying To Fix A Laptop Computer With A Vacuum Tube. Amid the gnashing of teeth at various city halls, not to mention some congress people running around denouncing SkyWest’s decision, there are some hard facts that illuminate not only SkyWest’s decision, but the need to address the entire approach to small community air service, including EAS and the Small Community Air Service Development grant program.

These government schemes are vainly trying to engender an air transportation system that’s based on obsolete assumptions, lack of understanding of the shifts in air service as a communication channel, and on near-zero recognition of consumer trends. Should be embarrassing to the DOT.

The Message Is Clear – But Will The DOT Get It? A couple of raw statistics… of the 29 markets cut…

21 had less than a 40% load factor for the full-year ending 11/21

Of those, ten were under 30% load factors… a few, well under.

Several of these EAS points are within an hour of another, better-served airport.

Poster children for the latter waste point are Pueblo and Muskegon. Both have access within an hour or less of alternative gateways with dozens of flights, including service via Southwest, all of which make the local EAS flights non-competitive. Except to politicians, there is no viability for such flights.

The Chosen Replacements Won’t Replace… Let’s go back 23 years. At the Boyd Group International Aviation Summit, we pointed out that the only way that EAS service had even a snowball’s chance in Miami of being consumer-viable, it had to have the following characteristics.

A minimum of two departures per day…

With service to a major airline’s connecting hub-site…

On flights clearly branded as those of the hub-site carrier’s system.

As it turns out, all three of these criteria were in place at each of the 29 EAS markets that were dropped. All were to at least one United hubsite. All were branded as United Express, delivering the connectivity of the UAL system. Plus, the service had the enormous service factors attendant to United – the Mileage Plus frequent flyer program, and exposure in CRS systems across the world, among others.

It can’t get any better.

Yet, it still didn’t work… proven by the load factors attained. It’s a market realities issue. No wonder the decision was made that pilot resources could be used more productively elsewhere. So, the fact remains that even if pilots were available, it would be a colossal waste of these skills flying near-empty airplanes that consumers won’t use.

A Message To Move On, Not Backward. Already there are the expected declarations from some communities that “we’ll find another airline!”

To speak the truth, in most cases, functionally and service-qualitatively, no you won’t. There will not be a replacement that will provide the connectivity and the service features that was experienced with SkyWest/UAX.

Optimizing The Situation. While this won’t set well with some airports and communities, it remains the truth: the EAS program, as currently structured is a giant mess. As the CEO of United has stated, that money could be used better to train pilots… or other things. BGI and Swelbar-Zhong have urged that the SCASD program be shifted into one that supports economic growth initiatives at small airports, instead of embarrassing goals such as alleviating “higher than average airfares” – a metric that is beyond dimbulb and simply non-existent.

The SkyWest/UAX EAS decision comes on the heels of another – at least – 21 short haul hub feed routes given the pink slip by United and American in the last three months. Get the trend here?

What else is needed to see what’s coming? It sure isn’t another leakage study to find “more airlines.” In this case, it’s not a simple matter of hiring more pilots. It’s about the need to re-think air service realities and air service capabilities.

Get Some Future Perspectives. If you haven’t reviewed it, BGI and Swelbar-Zhong have published an independent study of the small community air service realities. Click here to download your copy.

It’s a must for not just airports and communities, but for engineering firms and financial institutions, too. We don’t sugar coat anything, and we outline alternative paths to assuring communicative connectivity for small communities.

There are options for the future of rural air service access, but today, it has degenerated into simply paying lots of tax dollars to have just flights at the local airport, instead of developing new-concept connectivity approaches.

In this study, we’re not necessarily promulgating anything… just illuminating hard economic realities that today are too often smoke screened by eager “studies” or “civic meetings” or other expensive diversions.

Looking For Solutions & Futurist Assistance? And, if you’re interested in fresh, data-driven forecasts of emerging trends and new airport planning strategies, drop us an email – both BGI and Swelbar-Zhong are ready to deliver. We don’t run with the pack… we are well ahead of it.

And so are our clients.

Airports:USA® Ukraine Contingency Forecast:
10% – 15% Reduction In National Enplanements.

Incoming!

The effects of the Ukraine invasion are now starting to invade the USA air transportation system.

Oil prices just hit $130 a barrel. ‘Nuff said. Plan on this… air traffic volume will decline, and you can take this to your bookie: there will be major capacity pull-backs at US airline systems. Probably sooner than later. Much sooner.

This is not hyperbole, and it is not a drill. We’d strongly suggest that all sectors of US aviation begin to plan for some falling flak coming from the mess in the Ukraine. It could be severe. And it will manifest differently at every commercially-served airport in America.

In fact, just the initial effects of fuel spikes affecting domestic capacity, not to mention a potential collapse of what is left of international demand, could result in 2022 seeing as much as a 15% cut in expected airport enplanements… that’s around 130 million fewer than currently expected, and almost 25% below 2019 levels.

Airline Margins To Be Squeezed. Okay, everybody. Heads out of the clouds. Reality is on the way.

At $130 a barrel oil, the cost of go juice is going to have a rapid effect on overtime in airline route planning departments. It’s also going to be nasty for general and business aviation as well.

The jacking up of future jet-A prices is going to hit every airport the USA. No exceptions. No matter if they have commercial service or not. Time to batten down the financial hatches now to prepare for a nasty downturn.

Take a look at the levels of 50-seat jet service… rethink reliance on leisure travel generation… concession revenues are going to take a hit.

There Could Be A Winner In This Hoedown. It’s a coincidence that CommutAir just shifted over 30 ERJ-145s out of their system to JSX. The JSX model is a sound one, and there are open questions on whether this pending (and uncertain) slash in major airline flying might just be a boon to the type of product JSX offers.

The Family & The Business Budgets Just Took Some Heavy Hits. Yup, $130 a barrel oil is going to put a number of now-marginal hub feed routes into goodbye gear.

Toss in the corollary effects of overall price inflation generated by the Washington playpen, and the appalling, politically-motivated and irresponsible refusal of the inhabitants in the White House to increase domestic oil production, and only a mentally-challenged zombie just arriving from Mars could miss the implications. Our intrepid seat warmer in the DOT was asked about this, and his response was that it would be better to squeeze oil flow to encourage purchase of electric automobiles.

You can scratch out the babble about pilot shortages affecting air service. What may or may not be sitting in the cockpit isn’t going to make no nevermind when consumers are paying $4 for unleaded, the cost of groceries skyrocket, and the airlines find that hurling a 50-seat jet to markets that could barely break even a year ago is now financially lethal.

The Expected International Travel Comeback Isn’t Coming. Take a look at international air traffic. Before the Chinese Communist Party engineered/allowed a global pandemic to spread beyond Wuhan (sorry 60 Minutes, we prefer the truth), international markets were a key part of the revenue streams of the US airline system.

Trans-Pacific was already starting to decline due to geopolitical factors, but today, all major international flows – trans-Pac and trans-Atlantic – are getting zapped. Between the mess in the Ukraine facing the E.U., and the thugs in Beijing threatening to invade Taiwan, plus the increases in cost of jet fuel, these revenue streams are in real jeopardy. That will affect what airlines can plan within the domestic market.

Tokyo-London… Clear An Added Four Hours. As we outlined in a recent Aviation Unscripted video, the travel streams between Western Europe and the Far East are being choked by prohibitions of flying over Mother Russia. Japan Airlines flights between Tokyo and London are now 15 hours instead of 11 hours due to the magical mystery tour routings needed to avoid PutinLand.

What this means is that we can expect a whole lot of red pencil action in airline schedule planning departments.

As it stood before the Ukraine war, the US airport industry was already forecast to experience 100 million fewer enplanements in 2022 compared to 2019. Now, that’s looking really, really optimistic. We are conservatively estimating a Ukraine-driven contingency projection of around 790 to 810 enplanements, down from 900 million.

Plan For The Future With An Airports:USA® Forecast. This will – will – affect traffic and enplanement levels at airports across the country. We’d suggest getting a view of the future by ordering an Airports:USA® short-term enplanement forecast that will give a clearer picture of the possible range of outcomes specific to your airport.

Airports:USA® is the only source of up-to-the-minute enplanement projections for airports across the USA. The traffic, capacity, fleet applications and both historic and future trends are reviewed for each.

Based on known and expected airline strategic and fleet shifts, Boyd Group International will deliver a 12-month forecast, with insight and analyses of the specific strengths, weaknesses, and vulnerabilities as airlines adjust to the coming crisis.

Give us a call, or log onto www.AirportsUSA.com for more information. Don’t get caught blind-sided. Nobody can stop the fallout coming in the next few months, but we can help you understand and prepare.

The Ukraine Mess – Air Service Fallout Is Coming Home To USA
And It May Keep Some Travel Dollars Home, Too

Let’s cut to the chase. This isn’t ‘Vegas.

What’s happening in the Ukraine won’t stay in the Ukraine, at least as far as the effects on air transportation go.

Airlines Will Be Re-Thinking International Capacity, Again. Just when places like the U.K. and Germany and other countries were loosening or eliminating travel-choking CCP-Covid restrictions, a nasty regional war comes into play. Not pretty, and maybe not so regional.

The Darth Vader running Russia has put his nuclear forces on alert, He’s warned Finland and Sweden of military action. Even Switzerland is talking about taking sides against Russia.

Oh, yeah, time to take the kids to see Paris. Not.

Take it to the bank, trans-Atlantic travel isn’t going to rebound this summer. It’s going to decline further. Beyond that, traffic flows between Europe and the Far East will be materially flummoxed due to near-certain constrictions of routings involving overflight of Russia and nearby regions. Inter-global air service is in for a hit.

Draw the picture. Total US-generated international travel is heading for a major decline, again. We already could see that trans-Pacific travel will be a fraction of pre-pandemic levels, mainly due to the complete collapse of China-USA air travel, That will affect not only places like LAX and SFO, but also other major airports where China traffic, while not huge, was a flow factor. Think RDU and DEN in particular.

Now, this Ukraine war has just put 86 on a lot of tentative consumer travel plans across the Atlantic. Then toss in the mess that Trudeau has put Canada in, and it’s pretty certain that a lot of planned leisure trips to that country are red-penciled.

Secondary US-EU Markets In The Crosshairs. Most vulnerable: secondary US airport trans-Atlantic flights. With connectivity demand slashed at hubs like BA/LHR, and LH/FRA and AF/CDG, it will be nonstops from secondary USA airports that will likely get hit square on the cancellation bulls-eye. While this is not pleasant to forecast, we need to look at trans-Atlantic service in operation or planned at places like AUS, PIT, CVG, STL getting the temporary ax at least for the near term.

Idle Leisure Travel Dollars Represent Domestic Opportunities? All of this chaos taking place outside of the USA may well divert planned travel spend to USA destinations. People will be looking for new travel experiences… this could be a huge opportunity for places in the United States. Think Flathead Lake. Think Thousand Islands. Think Big Bend. Think Outer Banks. Think Lexington. Think Bar Harbor.

Actually, it’s up to the powers that be in places like this to go into high gear now to posture for these otherwise latent travel dollars. It’s an opportunity – big time.

One thing is certain: This is not going to be a happy summer for international carriers.

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Getting Ready For The New Air Service System

We’re Challenging The Status Quo

Let’s take a look…

Consolidation and regionalization are reducing or eliminating local flights at small community airports.

American, Delta and United cutting markets like CWA, TOL, ABI, LAN, AZO, etc. out of their various hub systems. There will be more… a lot more.

Capacity across the board still hovering at 10%-12% down compared to 2019.

Smaller jets being retired from fleets, accelerating regionalization.

Yup, tough times.

And, according the lore and most of the media coverage, it’s all due to pilot shortages and the outcome of the CCP-Covid pandemic. When these are addressed, all will be restored.

And Santa Claus will be coming down the chimney, too.

The Economic Meteor Was On The Way, Anyway. The hard reality is that the core dynamics delivering these changes were in progress before the pilot shortage. And long before the virus cover-ups in Wuhan delivered a pandemic to America. These just accelerated the effects of material and fundamental shifts in air transportation as a communication channel.

The air service that’s been pulled isn’t coming back… Santa Claus isn’t either.

Take A Look At The Future. Swelbar-Zhong Consulting and Boyd Group International have issued a new Thought Paper that, based on hard, clear data, illuminates the need for restructuring the entire approach to assuring communicative connectivity for all areas of the nation.

The Real Third Rail Issue is a paper that does not dance around the issues. Air service access is changing, yet many communities are still stuck trying to recreate the past, wallowing in nonsensical exercises like “peer airport comparisons” (just measuring passengers, not air travel dynamics) or “average fares” (there is no such thing) or “catchment studies” (catchment is driven by consumer options not geography.)

Air travel dynamics have changed. Fleets have changed. The consumer has changed. Raw economics have changed. Yet communities are running to get back to the 1980s. This Thought Paper – The Real Third Rail Issue – addresses the facts, and outlines the solutions and opportunities that are coming.

This is not a passing report. Standby… we’ll be talking in the weeks ahead in a wide range of venues, exploring solutions and new directions. Yes, it will ruffle some feathers… but facts are facts.

If you want to take a hard unvarnished look at the future, just send us an email and we’ll get it off to you.

The future belongs to those who accept that the past is over.

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The Monday Insight Is On Hiatus Recognizing The US Holiday…

But…

Be sure to clear your calendar this Thursday, February 24, for the next Boyd+Swelbar Unvarnished Video.

You really don’t want to miss this…

We’ll be taking on a number of issues that are shaping aviation and air transportation, and how the nation is generally mis-informed and mis-directed about the future of the air transportation in the USA. Big time.

The World Has Changed… So Have Communication Modalities. For just a little pre-video homework, take a look at the following illustration and give some thought to what it represents.

Give it some thought… what is the one modality that has not seen quantum leaps in efficiency, cost and consumer access?

The answer delivers a whole new perspective on air service planning and on how a lot of the shoot-in-the-dark approaches simply are promoting a modality that in many applications can no longer compete.

Let’s tag up this Thursday… Click here and bookmark it… As with our initial Boyd+Swelbar Unvarnished videos, we’ll be discussing a number of aviation third rails that question and sometimes threaten ambient thinking.

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Yes! More Combinations Coming…
But Not Where Consumers Will See It

Frontier/Spirit Merger – Not Much To See
And Not Much Consumer Fallout, Either.

The expected din from the usual suspects in the consumerist world hasn’t seemed to manifest in regard to the combination of Frontier and Spirit.

Maybe they’re too busy swooning over the syrupy stuff coming over the television about the wonders of the Olympics, sponsored by the folks who brought us the Covid virus. Maybe they really do understand that for the consumer, this is less of a merger than a large-scale codeshare – one that will deliver almost no downsides competitively.

Not likely. But we can hope.

As we covered in last week’s Touch & Go, this is a combined entity that, far from trying to consolidate, it’s adding whole fleets of new airplanes to expand. Like, another 600 or so, assuming some retirements.

It’s best summed up by our friend Bill Swelbar, who sort of takes it all with a yawn. Move along, folks. Not much to see here.

More Airline Mergers On Tap?. Like so much aviation planning today, there’s a lot of 1980s thinking that has no bearing on current air transportation realities.

One is the assumption that once two carriers merge, the rest of the industry will be pressured competitively to do the same. This is supposedly what took place in Ancient Times, a.k.a. the 1980s.

But that was then, this is now. There aren’t many players left that would see huge market advantages by combining. Alaska has been a merger target since the 1970s, but the oneworld membership changes its position. American could make a play, but they probably understand that it would start WW-III at the DOJ.

JetBlue and… whoever? Southwest and,,, whoever? Not a lot of airline players left.

But, Watch The Lift Provider Sector. One part of the air transportation infrastructure that almost certainly will see some re-structuring is the misnamed “regional airline” sector… the lessors of small lift to major airline systems.

Despite the name, they are neither “regional” nor in the business of being independent airline brands. They are suppliers. Important suppliers, but in a shrinking part of the airline industry.

Combinations in this area are likely as the airline industry needs fewer and fewer 50-seat jets. But this would have all the consumer impact of, say AirLease merging with ILFC . (To the average consumer, that’s “who?” merging with “who?”)

They are essentially in the same business, except the “regional airline” product is in declining demand. There would be zero consumer impact.

The hard fact is that the claims that “regional airlines” serve XXX percent of airports or carry XXX percent of airline passengers are simply misleading. This implies that we still have an independent geographic-focused airline industry sector that is 25 years buried. Just as with 777s and A320s they lease from outsiders, it is the major carriers that are deciding where these assets are used.

Conclusion. Frontier/Spirit is a corporate connection transaction. One that will have near zero dampening effect on the growth of the ULCC sector.

Or on consumer prices.

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China-US Traffic Collapse…
Maybe Good News For Omaha & Spokane

United has “postponed” flights from LAX, SFO, ORD and IAD to points in China. In most cases, for nine months.

In most cases, these cancellations are for the next nine months. However, the reality is that the traffic base that supported these routes are as dead as Confucius’ poodle. With the changes that have taken place in China over the past five years, it is not the same market. The 3 million Chinese visitors seen in 2017 – part of the total 8 million O&D – are not here today and won’t be anytime in the foreseeable future. Business traffic? The Chinese economy has been supported by giant Ponzi schemes.

Okay, do a quick thought on the resources these flights gobbled up – aircraft, pilot time, cabin crews, facilities. They are largely still in place, and the cascading changes that will be driven by the need to utilize them only point to the possibility of additional capacity in the USA.

One thing is certain – the high hopes for USA-China air traffic are gone. US carriers will need to adjust to this.

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Small & Rural Airports –
Time To Look Beyond Commercial Flights

In just about every media story regarding small community airports, the focus gets hijacked to the need for scheduled flights. The groupthink is that without “air service” the community is economically doomed.

The groupthink is that “commercial service” is a simple commodity. It is assumed to open the community to commercial expansion that would be impossible without those “scheduled flights” – which tend never to be defined. It’s like the dishonest internet surveys that get foisted on communities that report profound conclusions, like “74% of respondents would use the local airport” without any attempt to define what the specifics of that service are.

The SCASD Program Was Great. ‘Cept, It Hasn’t Done Diddly For Truly Small Communities. The Small Community Air Service Development Grant Program now marks its 20^th year. It was founded on a whole passel of groupthink misconceptions. One is whether an airport has “higher than average fares,” when there is no such metric. But the underlying tenet of the SCASD program is that every small airport should focus on scheduled passenger service, which in the light of airline economics, the changes in the role of air travel as a communication channel, and huge shifts in consumer preferences, is sheer malarkey.

As we’ve stated in the past, Boyd Group International SCASD applications have won over $23 million for our clients – in the first 15 years of the program. But in recent years we have found few such projects that make sense, and we don’t chase after grant program we a professionals know to be dead ends.

But that does not change the fact that our total airport system is a huge economic generator. What now needs to be done is to engender investment and business expansion at small airports… beyond lost-cause spending on trying to attract passenger flights that don’t exist and would be uneconomic in any case.

Time To Call The Game On Realities, Not Political Correctness. Log On This Thursday For A Special Boyd+Swelbar Unvarnished Video. This week, we’re dispensing with the agenda and will be taking on the issues surrounding small community airports and air service.

Plan on just 25 minutes – or maybe a bit less – of no-holds-barred discussion of how current air service development thinking is getting deeper and deeper in groupthink quicksand. Bill Swelbar and Mike Boyd will be varnishing a lot of bad policies that are actually keeping America and its airport system aimed squarely at the 1950s.

For small airports, the emerging trends in aviation and logistics point to an exciting future. But continued efforts to keep them chasing the past will lead them exactly there.

Log on to Boyd+Swelbar Unvarnished by clicking here, and click there this Thursday, too.

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On This Week’s Aviation Unscripted Video…

We’re dealing with some of the terminology that’s commonly used in aviation planning.

Within this, some of that terminology describes an air transportation system that no longer exists, and perpetrates misunderstanding of air transportation realities.

Here’s a hint: consumers’ use of air transportation does not rely on the geographic location of one airport v another.

Also, that choice of air service which the consumer may make at another airport, instead of what’s at the local airport, is a natural consumer choice. Within this, the assumption that “leakage” can be retained in all cases (or, today, actually most cases) is entirely nonsense.

Regionalization is not coming. It’s here. Take a look at Aviation Unscripted by clicking here.

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Before We Start This Week:
Got Some Ideas On Aviation Future?
Here’s Your Channel.

We again want to thank the folks who are making Boyd+Swelbar Unvarnished successful… we’re hoping to inject some new perspectives into the aviation spectrum.

The next Unvarnished video will be posted February 9th. That gives you just over a week to let us know what you’d like Bill and Mike to tackle. We are open.

Tentatively, right now we’re looking at a number of Under The Wing issues that will challenge and in some cases demolish aviation groupthink. A couple of the areas we’re considering going after on February 9….

Making SCASD An Economic Program. The SCASD program is nearing 20 years old… it is based on assumptions that are now outdated, and an air transportation structure that has evolved way beyond the confines of the original program. In fact, it’s getting really out of whack compared to what small airports need in the future.

At Boyd Group International, we’ve recognized this for the last roughly five years. After more than a decade in successful grant applications – over $23 million – we now accept very few SCASD projects – the opportunities for air service are getting more and more distant, and we don’t waste clients’ money doing applications for vapor-potential results. Plus, while it’s great for the airports involved, a lot of the grants were for communities that in no way could be described as “small” or underserved.

On the next Unvarnished, we’ll be talking about turning this program into something that reflects the new realities. It needs to be one that engenders projects that capitalize on the economic value of small airports, instead of only on the increasingly-desperate applications to find air service that in most cases won’t work. (Sorry, we’re just calling it like it is.)

There are exciting alternative uses of this money, and the US airport industry has a lot of innovation that just needs some investment dollars to implement. The focus on scheduled air service being the only #1 airport asset is flat out nonsense for small airports. It may be part of the revenue base, but there are dozens of small airports that can make hay with grants that demonstrably create jobs.

Got any ideas on the subject? Bill and Mike certainly do, and we’d be excited to hear and discuss yours? Don’t be shy… don’t hold back. Email us now. Unscripted@AviationPlanning.com.

ASD Terminology: In planning air service access, how things are categorized and described can affect how they are approached, and more importantly, how the consumer understands – or is misled – regarding the realities of air service. A couple of starters…

So, how come the word “lure” is constantly used in describing air access improvement efforts?  Like, “… the mayor has a plan to lure more airlines to town…”

It implies to the consumer that airline planners are like fish that’ll jump at shiny objects. To “lure” purports that it’s just a matter of the right incentives, the right studies, and the airline will be drawn to the community in some sort of data trance. Remember, at its core, a “lure” is intended to represent something to mislead the target. Not a positive description for professional work.

The professional goal is not to “lure” but to concretely provide business reasons… clearly and succinctly… and to recognize that in some cases, they may not be there.

Then there’s the entirely obsolete definition of “catchment area” – it assumes that traffic capture is all about geography, which is complete nonsense. It’s a key concept that needs a whole new definition, based on the consumer and consumer travel needs, not an arbitrary drive-time map.

Let’s conclude these examples with the parochial concept of “leakage” which is really about consumer air service options. Contrary to groupthink, it’s not an issue of where they live, which implies that the closest airport is the one he or she should/can/must use. It’s about the air options available at the point in time the consumer wants to travel.

In fact, it can be argued that there really isn’t any true “leakage” as it is generally defined today. (That runs over the heresy line, but join us February 9 and we’ll tackle it.)

Consumers use what is best available at the time of travel, and that may be an option the local airport simply cannot offer, due to size or proximity. Determining that set of metrics is a lot more complex than doing point-of sale studies.

It is incredible how much money is spent doing “leakage” studies that are akin to taking the temperature one day, and assuming that’s what it is every day. We’ll discuss… unvarnished.

Airport Re-Purposing. As Swelbar-Zhong has pointed out repeatedly, there is going to be a lot of small jets all dressed up with no place to go as air service regionalization continues.

How much money is being thrown at trying to stop this economic reality, instead of optimizing it. With the changes evolving in air transportation and logistics, there are new economic opportunities for small airports. And it’s important that communities fully understand this dynamic.

Log On February 9… In the meantime, chime in and let us know your views. If you haven’t logged on, our channel can be accessed by clicking here. Take a look, and if you have any suggestions or input, email us at Unvarnished@Aviation.com.

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Aviation Reporting: Check The Sources

There are a lot of dynamics bubbling up in aviation. Unfortunately, one of them doesn’t appear to be informed reporting.

Just came across an article about Boeing concluding the following:

“… Boeing doesn’t need to invest in a new model right away to compete with the A320 for short-haul flights, though it still needs an alternative for medium haul…”

Say, what?

Okay, somebody needs to rush off and tell those airlines running A320s on transcon and international routes that these are just “short haul” airplanes, and they’re not even “medium haul” – whatever that is. And while you’re at it, email Boeing that the 737 Max is not a viable A320 competitor, either.  It was in the media, and on the internet, so it must be accurate.

This type of amateur babble is usually found on those Walter Mitty-infested internet aviation hobby boards.

But this wasn’t from one of those sources. It was from the Wall Street Journal, no less, which postures itself as expert in the subject matter, not to be questioned. It’s clear they need to be.

The Journal just also just published its ranking of best-to-worst airlines. Because it’s from a source that apparently can’t tell an A320 from a kitchen blender, it certainly should give one pause regarding the findings.

Caveat reader.

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And More From The Global Fleet Picture…
Anybody Noticed? It’s A Manufacturer Duopoly.

This is a first, probably.

Airbus just cancelled an order from Qatar Airways for 50 aircraft, worth over $6 billion dollars.

This is not transposed… the seller, Airbus, told the customer, Qatar Airways, to take a hike. Don’t want your business. Go someplace else. Smoke ’em if you got ’em. Buy your airliners someplace else.

The background of this is due to charges by Qatar that many of the A350s in its fleet have safety defects. It’s an allegation that just about every source – other than Qatar – has dismissed as bogus. Apparently, Airbus doesn’t need the hassle.

Want A Jet Airliner. Simple. Just Two Places To Call.  On the surface, this is a business spat, and Airbus can clearly prove other A350 operators and international safety organizations are on their side.

But this isn’t the real story. It seems that IATA has looked at this Airbus cancellation and is “concerned” that there aren’t a lot of alternative airliner manufacturers out there. It’s Airbus and Boeing. Period.

The head of IATA has urged these manufacturers to behave responsibly and not abuse their market power. Clearly, if Qatar now needs narrow-body airliners, it doesn’t take much more than a GED diploma to figure out that Boeing is the only game in town. So, across the negotiating table, Qatar doesn’t have much juice. Plus, finding a compatible fleet of 50 used A320neos or 737 Max airliners is not in the cards.

Wait! The Russians Are Coming, The Russians Are Coming. The Chinese, Too!  Get ready. It’s a leadpipe cinch that in the next several weeks, we’ll be hearing from a number of “expert” sources – maybe even in the Wall Street Journal – that this is the opening for China and Russia to jump into the global airliner market.

The only fly in that argument is that neither Russia nor China have any airliners worth buying. For example, China’s 75-seat or so ARJ-21 has been described by Richard Abolafia of the Teal Group as being something like “breathtakingly obsolete.” The rest of the sorry product offerings from these two nations – the MC-21, the C919, CR929 et al, aren’t far behind.

See, the machines the Russians and China’s CCP are peddling are just me-too designs and are performance dogs. Bow-wows. Flying obstacles. They’ve been on the market for years, and the case of the A320-like C919, the majority of the eager buyers are CCP-controlled financial institutions, not airlines. And none from outside of the Middle Kingdom. There’s no mystery why. (Oh, yeah. There’s an Indonesian airline that’s getting ARJ-21 lead sleds. But in the flashlight of truth, that airline is controlled by a Chinese entity.)

Consider The Owner of The Manufacturer – Any Airline Want To Become A Moral Pariah? Plus, imagine the PR mess for a US airline announcing an order for, say, C919s, direct from the government that operates concentration camps, engages in cultural genocide, and created, covered up and let spread a global pandemic. A real booking magnet, right?

Take 8 Minutes & Get The Lowdown. We’ve done an Aviation Unscripted video covering how no matter what the backlog might be at Airbus and Boeing, airliners from China and Russia won’t get any traction outside of their own captive airlines.

Click here and take a gander. The Airbus/Boeing duopoly isn’t going to see material competition.

Rural/Regional Air Access:

Just One Example of 1950s Planning Dogma

The USA really needs a complete thought overhaul when it comes to the role of air transportation as a communication channel.

What’s really amazing is that there are still lots of folks in high places declaring that commercial service right at every local airport is the equivalent of having running water – it’s a natural economic necessity.

Do The Pied Piper Act – They Aren’t Experts In Aviation, So Have At It. It’s natural the mayors, Chambers of Commerce, EDCs, ad-hock “task forces” themselves aren’t expert in air service economics, so they can be manipulated like wind-up toys with grand promises of “air service” (no need to define it or outline what it’s to accomplish) that will make the community whole. Even if the consumer base has much superior alternatives already.

One recent comment from a state official declared that air service is a far safer modality to leave small towns than other conveyances. Don’t take the Interstate – just wait for that taxpayer-subsidized 2PM Cessna Caravan that connects to nowhere. Real forward thinking. Wagon trains may be next.

There are examples of this across the nation, but generally it’s not questioned. Too politically-challenging. Here we are with the best national airport system in the world, and instead of focusing on the future opportunities it represents in regard to areas such as job creation in the new technologies coming along, attracting new industries hankerin’ to get out of big cities, not to mention the new logistics, too many communities are being convinced that all it really takes to reach the Promised Land is “local air service.” No need to define what that is, or what the goal is. Just “air service.”

Air service that in most cases has a snowball’s chance in Miami of being successful.

Actually, This Small Community ASD Emperor Is Buck Naked. Amid this righteous din, consider the following bit of heresy:

“…Small communities cannot satisfy their demand base with 2 frequencies per day. They cannot begin to retain their local traffic with multiple options available within a reasonable driving distance. Potential re-purposing some small airports will result in more economic generation than what scant air service for the sake of air service produces…”

Apostasy! Anti-social behavior! Intellectual hooliganism! This illuminates the fact that when consumers have 20-30-40 or more daily departures less than an hour – or even two hours or more – away, the chase after just having “flights” at the local airport – no definition and no destinations planned – is really myopic planning.

As for the author, we can rule out Epictetus, Plato, Pope John XXIII, and Howard Stern.

Finally, it can be revealed that this can be traced to one William Swelbar. But it’s the raw truth. Get ready. More is coming.

Last week, we implemented a new video channel that has the temerity to tackle issues such as this.

Boyd+Swelbar Unvarnished. No sacred cows. No dancing around. Just straight discussion about aviation issues. This Wednesday, we’re doing it again. Log on to our channel – Boyd Swelbar – at Rumble.com. Or log on here at AviationPlanning.com, and click the link in the menu bar.

Everything In Aviation Is On The Table – And None of It Is Sacred. This week, we’ll be talking about a number of areas that, well, aren’t usually discussed. All free-form, all free-think. No telling where it’s going to go.

The 5G media fiasco? The potential for an unexpected near-explosion in personal travel, as the CCP-Omicron variant evolves away? How airport re-purposing faces some real opportunities? The issue of electric short-haul air taxi aircraft? The 100LL discussion? International access?  Pilot issues? More than can be covered in a few minutes, but enough to get some new thought patterns into play.

At Boyd+Swelbar Unvarished, we have no boundries or set agendas. Just exploring the future outside of stale, ambient thinking.

If you haven’t seen it yet, the first video can be accessed by hitting the Boyd Swelbar tab on the menu bar. (Or, click here.)

This week’s format may be a bit more refined, but the approach to key issues certainly won’t. And if there’s some areas you want us to go into, we’re all ears… just send an email to Unvarnished@AviationPlanning.com.

Join the Unvarnished Uprising this Wednesday!

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