Summer Traffic Spike – It’s Restructuring. Not Recovery To Pre-CCP-Covid.

We’ve noted in the latest Touch & Go newsletter sent to our clients & friends that the now-in-progress spike in air passenger growth may be only a bubble on the way to a new role for air transportation in the USA.

Comparing 2021 Planned Capacity To 2019… As of today, the airline industry has not yet fully adjusted the schedule patterns for July and August… plus, it is highly optimistic that September will remain at 8% more seats offered than in 2019.

Clouds On The Horizon. It is logical to accept that June will be in the @80% range of what was offered in 2019. July, too. However, it is really optimistic to project that air traffic volumes will exceed 2019 by the 4^th quarter.

First, business traffic most likely will see no rebound to the pre-CCP-Covid levels. How much it will rebound will depend on the fundamental changes in the basic foundation of business communication systems that have been experienced in the last 12 months.

Second, it is an open question regarding the drivers of the summer travel spike. It may be a bubble of demand, or it may be the indication that in the future leisure demand will be a larger percentage of revenue opportunities for the airline industry. That would indicate more vulnerability to economic shifts that affect disposable income and investment income.

Finally, air travel is entirely dependent on available dollars – both personal and business. That’s factor which apparently nobody wants to consider right now.

Planed Economic Policies Are Not Encouraging. Let’s state the facts: The economic view from 30,000 feet up isn’t real encouraging. Virtually every economic policy coming out of Washington is based on wealth reduction (taxes) or wealth suppression (social experiments that deter free and open discussion of issues and are openly aimed at reduction in commerce.)  Then there are open trendy attacks on supply of fuel – prohibiting exploration and closing pipeline projects will only make travel – and the cost of living – more expensive.

This stuff does not encourage travel spending – particularly when higher taxes will ultimately eat up discretionary spending – regardless of usual political promises to the contrary.

It is understood that these conclusions might be politically incorrect, but it’s what’s on the table and it is clear and obvious.

The next four weeks will be very interesting – if bookings remain strong for post-Labor Day travel that will determine how rapidly we will attain “full” enplanements – this being air passenger traffic that the new economy will support.

Stay tuned.

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Another Sacred Tome Questioned

There is an increasing number of political and social areas that unfortunately are being relegated to the “not to be questioned” category, for fear of being pilloried or burned at the stake of consensus thinking.

There are things we mere mortals must not question for fear of being publicly exposed as a socially dangerous heretic.

In the early 1950s, “everybody knew” that atomic power and nuclear energy would deliver incredible economic benefits… nearly free electrical power… nearly free heat in cold regions… all sorts of magic. It was the dogma.

It even extended to official and nonsensical malarkey regarding the ease avoiding the dangers in the event of nuclear attack. Folks who attended grade school in the 1950s can remember “duck and cover” exercises in the classroom. Simple. If you see a nuclear flash, kids, just duck under your desk. And, if you’re outside, just cover yourself with anything – even a newspaper – to be safe.

Not kidding. The government actually produced cutesy public service announcement films about this stuff. Atomic power was the unquestioned future, and indeed a copy of the financial section of the New York Times was sufficient to ward off being turned into a crispy critter if the Commies attacked.

‘Course, in the case of a real nuclear attack this would likely delay your journey to the Pearly Gates by at least two to three milliseconds.

Today, we still have a range of sacred dogmas that are not to be questioned. Those who do so are immediately and confidently attacked as “non-believers” or worse. The masses are tacitly instructed to do so, automatically.

Okay. We’ve now stepped over the line, and possibly stepped into a pile of accepted dogma.

Last week’s Aviation Unscripted has dared to discuss the concept of “sustainability” in regard to at least one accepted “green” approach to the future. The reality is that some of the accepted “green” alternatives are anything but – and are socially damaging.

We included this in our last Touch & Go, so if you missed it there click here to take a factual gander at one “accepted” green solution that is anything but.

If you haven’t viewed it, click here. 

Leadership means questioning the norm. That’s not what’s going on with a lot of “sustainability” assumptions.

The Magic 18 Inches of Health Protection

Never has seat 21E had the importance and health benefits it does today. It’s a middle seat, and the shamans in Washington are hyping it like they just discovered radium.

Last week, the Center For Disease Control (CDC) issued a new study, urging airlines to block middle seats to stop the potential spread of the CCP-Covid virus in airplane cabins.

Impressively, the CDC noted that this move could reduce the risk by over 50%. Wonderful  advice, particularly since there has been essentially zip evidence of CCP-Covid spread in  airplane cabins.

Naturally, however, the media took this CDC study and  ran with it like Zeus himself had just delivered it by express lightning bolt.

Nobody seemed to question the CDC’s conclusions. One major network radio outlet was furious that we dared suggest that the CDC was claiming to reduce something that’s been shown not to be a risk in the first place. Don’t want to hear that… truth doesn’t matter to certain parts of the media when it might shed light on bureaucratic political correctness.

This is just another in a long line of wanderings by the CDC. It is reprehensible in that it implies that there is a very real and present threat in airplane cabins – one that has been proven not to exist.

Sure, that 18 inches of middle seat separation is great protection – especially after passengers crawl over each other when one needs to get to the window seat and are next to each other stuffing things into the overhead.

This CDC magnum opus isn’t science. But it is consistent with a lot of the political Kabuki theater that has attached itself to the bureaucratic Washington response to the CCP-Covid pandemic like barnacles on a tramp steamship.

Back in February a year ago, we were assured by the various “experts” and pandering politicians that it was okay to take a cruise, or go to a movie, or participate in group activities… even though it was clear that the CCP-Covid was spreading rapidly in China, Europe or elsewhere. We were advised back then that wearing a mask was not needed or even  advisable.

Now the very same sources are prancing around, telling us that we should wear not one but two masks for safety. The media buys into that as obediently as they have this latest CDC dictum.

Nobody in the media asks what the specs for the “masks” need to be. Two N95s? Two plastic hoods? Two paper masks imported from factories run by  the same criminal government  who started this pandemic?  Two soiled  hankies?

Yup, all of the above are equally fine. It’s “science,” don’t ya know. Not to be questioned.

If looked at honestly and without the pandering political correctness much of the media worships, this stuff fails to meet the standards of a half-naked witch doctor in some far-off jungle.

See, this is more about proving obedience to the “authorities” than health. Sort of like a religious requirement to  cover one’s face to show subservience.

The latest CDC “study” is more of the same.

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The “Infrastructure” Bill:

Airport & Aviation In The Long-Term Crosshairs

France has just passed a law prohibiting air service between any two points where rail service is less than 2.5 hours. Germany is on the same path.

See, it’s all about reducing carbon emissions… regardless of other issues, or even the economic fallout that may result. Or even if it will make any real difference. It’s part of the sacred environmental scripture… air travel is evil. Choo-choo trains love the environment and will protect the polar bears and snake-darters and endangered lizard species in the Amazon rain forest.

Back home, there are clowns inside the Marble Playpen in Washington that are likely looking at trying to do the same in the USA… environmental jihadists who need no facts or truth to spoil their dogma.

Only problem is that the USA does not have any such rail system.

Yet.

But they’re fixin’ to do something about that little problem.

We touched on this last week. But it’s important that every sector of the aviation industry be fully aware that this “infrastructure” bill leaves airports out in the cold. And could be the start on the path of bureaucrats dictating how we must travel in the future.

Now, to be clear, this legislation has about as much to do with infrastructure as Karl Marx had with the Vatican Council. But it is obvious that airports and aviation are not at the table in this pork-fest.

In the current Aviation Unscripted video, we discuss how the bill will slobber tax money all over building trendy new “high-speed” passenger rail across the nation. It’s trendy. It’s environmentally superior. (A lie, but truth isn’t a factor in the dogma.)

This is more than just constructing rail beds. It’s part of a long-term plan to hamstring commerce based on crackpot but politically-accepted transportation planning.

Click here. It is critical that everyone in aviation be able to discuss this matter factually.

It does affect the future of our airport system – and the national economy.

Traffic Forecast – Continued Strength
But 2019 Passenger Levels A Long Way Off

The latest Airports:USA® long-term forecast indicates just under 620 million enplanements for 2021.

Based on known and expected airline capacity and fleet trends, the latest Airports:USA® forecasts indicate 2021 on track for just under 620 million enplanements.

This tracks with current rates of screening reported by the TSA, which has been in the 1 million to 1.5 million level each day.

Currently, the average passenger journey generates 1.4 enplanements, which is the result of connecting itineraries. This then would indicate that the 620 million enplanement figure is on target.

The challenge is that this figure is well short of the 960 million experienced in 2019, and even further short of what was expected, pre-CCP Covid, for 2021. Based on the forecasts and traffic trends expected, year 2021 was projected by Airports:USA to be approximately 1.15 billion enplanements.

That means we are looking at a very different air transportation picture, and one that represents a much-reduced set of revenue streams for all sectors of the aviation industry. The planning that was in place in March of 2020 has in many aspects been made obsolete.

Obviously, the picture is mixed. Some regions are in line for very strong enplanement growth, based on the airline industry adjusting to the new consumer and business base.
What needs to be grasped is that there is no “rebound” – the reality is that we are experiencing traffic adjusting to the fact that air transportation as a communication modality is changing, both in regard to leisure and business applications.

How this will manifest is based on very different consumer and economic drivers than the ones in place in 2019. Understanding these emerging dynamics will be critical to revising airport Master Plans and revenue projections.

Airports:USA® is the only independent source of traffic and trend forecasts for the industry. Updated constantly, it provides clients with the insights and perspectives that illuminate how air transportation will evolve in the future.

Log on to www.AirportsUSA.com and then give us a call and we can set up a quick demo of how we can give you a clear planning tool for the future.
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In This Week’s Aviation Unscripted Video
Another Pandemic – An Economic Pandemic – May Be Coming

Not to be a Kassandra, but we may be in for another set of economic torpedoes later this year… maybe sooner.

Be sure to join us this Thursday, April 8, for the latest Aviation Unscripted video, published on that channel on Rumble.com. We have some very sobering insight regarding some possibly near-term shenanigans on the part of the un-elected hoodlum system running China.

Understanding the events and geo-political issues that are unfolding in other areas of the globe is essential to contingency planning. This is one contingency that might land in our laps and put air traffic and the economy back on the skids.

The CCP-Covid pandemic was a health-related scourge that was inflicted first on the Chinese people and shortly thereafter on the entire world.

Unfortunately, the mobsters running China may be in line to do a repeat, but this time it will be an economic pandemic.

Political trends in China are very dangerous. Various factions are going to the mattresses in power struggles regarding the current leader, Xi Jinping. It is just like the mafia on a huge scale… they are all members, but the infighting between “families” portends danger for the entire globe.

Dictators in trouble tend to take actions that are aimed at rallying the citizens and neutralizing opposition from political enemies. In this case, what Xi Jinping may pursue will do to the global economy what his incompetent handling of the Covid virus did to global health.

To access the Aviation Unscripted video channel, click here… and be sure to log on this Thursday and get the facts. Things could change very quickly in the months ahead.

Here’s one hint. Taiwan.

Recovery In The US Airline Industry – Selectively

Last week,based on data from our friends at Cirium, U.S. air carriers slashed another almost 30% out of the already-filed April schedules… May has just started to get the knife.

Nevertheless, traffic is growing slowly, but based on entirely different air travel dynamics. US carriers are moving toward being cash-positive. But the fact remains that the air transportation system will be smaller. The fact also remains that international traffic is going to continue to to be constricted, which will drive additional changes in airline fleets and long-term strategies.

The open question is fleet decisions. We are seeing indications that network carriers are moving to the middle… smaller narrow-body units. One indication was United bringing in a used 737-700, and American/Envoy leasing in some used E170s.

Meanwhile, a number of airports across the country are getting pleasant surprises, with major carriers unilaterally adding additional hub-spokes as well as some probably-experimental point-to-point flying.

ULCCs – the “parallel” air transportation system is going to larger units of single-aisle capacity. Frontier is retiring A319s and adding A321s, including  at last look a number of A321XLR units.

The Airports:USA forecast is still indicating year 2019 traffic levels to return by 2024 nationally. Within that, as we’ve outlined in recent Insights, there will be at least two dozen US airports that will exceed 2019 enplanements by the end of this year.

More data in this week’s Touch & Go newsletter for our clients and friends.

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In This Week’s Aviation Unscripted…

“Try new approaches. If they don’t work,  fail fast and move on…”

That was the message from United Airlines at the 25th International Aviation Forecast Summit last October. It’s the absolute right  recipe to get through these uncharted times.

In the new air transportation systems and changes in consumer patterns, airlines have to move fast and flexibly in planning the future. They are doing just that, which means that there are no hard and fast rules. Things change overnight as carriers strategize out of the damage done by the CCP pandemic.

Traditionally, airport enplanement forecasts were static document updated every year or so. The air transportation industry was stable – no across-the-industry disruptions.

That’s no longer the case. As airports have found, air service trends are changing daily. Capacity levels, schedule patterns, fleet applications, and even new service entry can come as a surprise.

This means that traffic forecasting needs to be a live, constantly updated document. One airline expansion or deleting can change everything.

We cover this in the latest Unscripted… it’s a short view, but has some points important to maximizing the future.

Log on and join your colleagues. We are excited regarding the viewership on Rumble and other access points. We appreciate the support!

March 22 Insight To Be Posted Shortly!

The Traffic Picture – U.S. Positive. International Not So

The Main Concern – Changing Policies From The Economic Hobbyists In Washington

We can start with this: the U.S. airline industry is in better shape than any other in the world. One reason is that, aside from China, it is the only one that’s based on a huge domestic demand.

A recovery is starting to show… the capacity knife was used a lot less on the originally-filed schedules for March… as it stands, it appears that this may be the case with April and beyond.

The latest Airports:USA® short term forecast:

If the trend holds, if the economy holds, if new taxes are not imposed, if the increasing constriction on petro-production on the part of the inhabitants in Washington doesn’t jack the price of jet-A up, the traffic recovery will be quicker than estimated three months.  A lot of ifs.

The Welcome Signs Are Coming Up. A number of states have made the decision to completely or almost completely open up. The requirements to cover one’s nose and mouth – regardless with what (N95 or a used hankie are both regulatory-satisfactory), and regardless of where one is, or how effective it may be – are being lifted in several states.

This removes the barrier and uncertainty of traveling to major places such as Texas and Florida. Other states are still in a state of CCP-Covid confusion. Nevertheless, the picture is clearing.

That’s in the United States. Not so in the E.U. or the U.K. Latest news is that Italy may shut down, and it appears that guy with the run-away hairdo who’s running Merry Olde England is clueless. Canada is still constricted. Same with other parts of the globe.

A New U.S. Air Transportation System. New Airline Strategies. Amid all this, the restructuring of the U.S. air transportation system will continue. The main apparent trends are:

• Expansion of Leisure Destinations… Florida is the main recipient, but any flows that can be identified as having potential leisure stimulation are in play. Montana is another opportunity. The goal is to plumb into some of the money not spent over the last year.
• Major City – Secondary City O&D Market Spokes. Big markets such as Los Angeles can offer potential of stimulating day-of-week or low frequency service to mid-size airports that in pre-CCP-Covid days weren’t really opportunities. In regard to Los Angeles – and California in general – it will all depend on some regulatory consistency coming into the picture.
• Expansion of Hub Flows. American in particular is bulking up on accessing secondary airport flows, particularly at CLT. Great news for some regions… how fleet changes will affect this in the long term is uncertain.

The U.S. airline industry went into full metal jacket mode almost immediately upon the arrival of this gift from the CCP in Wuhan. It’s clear that every airline now has an aggressive and internally-generated strategy to deal with the effects of the pandemic and the sometimes herkie-jerk responses on the part of some state governors.

Meantime, Back In The Old Countries… The situation in the rest of the world is not encouraging. As noted above, Europe is completely in planning chaos. Australia is still restricted in regard to international access.

Asia is not only affected by the CCP virus, but by widespread and very uncertain political issues, mostly driven by the 21^st century Nazis running China. (The chief Don of this criminal enterprise has instructed his army to prepare for war. It may be more than the usual doggerel, based on infighting between factions in China. Think Kinmen or even Taiwan as “points of interest” in the next 12 months.)

The point is this… the main reason for the plunge in domestic air traffic in the USA was first fear of the disease, and then the uncertainty of whether entire cities might be shut down. Both of those factors are receding. Domestic traffic levels will rebound faster than recently forecasted.

But the emerging national and global air transportation systems are still structured for the world of 2019. That’s dead… the roles and utility of air travel have been shifted. Leisure, business and international travel patterns have changed and that means airlines are facing new fleet imperatives.

As noted last week, the era of the “regional jet” – defined as 70-seats and below – is over. The next big trend will be in the single aisle category, with A320neo, 737 MAX and A220 variants opening secondary airports to a much wider set of new market opportunities.

Danger Signs… Torpedoes Spotted. The only uncertainty is how the economic plans being ginned up by the inhabitants of the Marble Play Pen will slow all this down.

The indicators are not positive. Standby.

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In The Latest Aviation Unscripted Video…

The Realities of Establishing Air Service At Small Communities…
Time To Stop The Games

Getting scheduled flights into small unserved airports has been one of the most misunderstood – and abused – challenges in the realm of air service development schemes.

The problem is that there is the belief that unless a community has scheduled flights at the local airport, the economic future for that community is dead.  In most cases that is pure hogwash, and in any case often completely impossible.

What these ASD programs usually ignore is the consumer… civic hubris and another jive-time “Market Study” won’t replace superior air service  options.

We grab this third rail in the current Unscripted video,,, click here to join us as we explore reality.

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