Rural America & Small Communities:

“De-Isolation” Is The Future… Air Service Planning Needs To Adjust

News Flash: Here’s some heresy…

Rural America is now, as we speak, getting “de-isolated” from the rest of the world.

More heresy: in ten years, small communities in all areas of the country will be “connected” like never before. Businesses will find advantages of building facilities and establishing offices in places that have been written off as being too far into the boondocks to be of any factor in the global economy.

Quality of life will be a draw, and new modes of communication will make these moves inevitable. Write it down… it’s already in progress.

That’s the good news. There is no bad news.

Except that most of the current assumptions regarding rural “air service development” are now completely out to lunch in this new environment.  The new connectivity will be driven by combinations of communication channels, and air transportation will be in a whole different role than that traditionally assumed. Community and regional planning needs to adjust accordingly.

Adjusting Air Service Planning To The Global Realities. On August 25, at the International Aviation Forecast Summit, there will be a special pre-event Workshop that will shake up and threaten ambient thinking in regard to air service planning.

The Workshop – Opening The Globe To Rural America – won’t be yet another Walter Mitty session talking about “air service development.” Those kinds of events talk about vague concepts such as “finding airlines” when the potential carriers (or lack of same) are as immediately obvious as a blemish on prom night. Or throw-away concepts to “lure more service” with incentive programs to unnamed and unknown carriers, without any recognition that in many cases, the airline system has passed them by years ago.

At this Workshop, several sacred cows will get tossed on the barbie of hard reality. We’ll be covering the changes in air transportation driven by the new channels of global communication, and how airport and air service planning must adjust to them.

Optimizing & Recognizing The Power of New Communication Channels. Here’s the bottom line – the economic future of every region of America will be based on the flow of communication to and from the rest of the global economy.

Air service is only one part of it – an important part, but changes in raw economics and the emergence of competing communication modes have shifted its role and applications.

It’s Whether They Can “Get Here”- And Not Just Physically,  So, the future for small communities and rural America will be based on how openly, conveniently, and cost-effectively they can interact and communicate within the global economy.

Analog Air Service Planning In A Digital World. As the Workshop will illuminate, the perception of “air service” in too many cases is still based on the assumption that the communication system of the 1970s is still in place… like, back when IBM Selectrics were the ultimate in office equipment, broadsheet newspapers delivered the news in the morning, and payphones were the main communication tool when one was away from the home or office.

And, also this was back when Beech-99s and Cessna 402s and Metro-IIIs piled the rural skies, connecting places like Abilene with Austin, Bangor with Boston, and Albany with Buffalo.

That communication network, including the air transportation system that existed back then, is as dead as the dodo, just like payphones and self-correcting typewriters.

In its place is a system of contact and exchange of information that’s almost instantaneous between just about any two points – or set of points – in the world. In 1980, a day business trip from Hartford to New York to meet people and do business, made sense.

Today, it’s too time-consuming. Too inefficient in regard to alternative communication options.

Inter-Modal & Inter-Channel Are The New Realities. Air as a mode of communication has also evolved within the new realities.

A lot of traditional air service concepts – which some communities are still chasing – is like mailing a letter compared to an email.

Example: it’s non-competitive from a consumer perspective trying to wedge a trip from Muskegon to Los Angeles into a local schedule of just two daily flights, when an easy 50- 60-minute drive to Grand Rapids delivers a range of faster, more numerous and more time-efficient options. Yet millions are spent every year at a lot of small communities trying to convince consumers otherwise… and it’s not a compelling argument. Regionalization – not futile attempts at balkanization – will be the strength of the US air transportation system.

This dynamic is the reason that the role of air as a communication channel has fundamentally changed. It’s also part of the fallout of new channels that are actually opening America’s rural regions to the globe.

Electronic Proximity Levels The Business Playing Field. Even without scheduled flights at the local airport, a company in Worland, Wyoming today can conduct a meeting with potential customers in Delhi, face to electronic face, with channels such as Skype and Zoom.  This adjusts for the economic fact that connective air service at the local airport is a thing of the past.

For the metal-fabrication company in Lima, Ohio, the need to travel to Lima, Peru to discuss a contract or sales call is now replaced by a high-def screen, and a quick exchange of e-mailed documents. Getting on an airplane is less and less required to get business done.

This does not imply that air transportation will go away. It just has a different set of roles within the regional, national, and global communication systems.

Communities that recognize these changes and plan their air access programs accordingly will prosper.

Clear Your Calendar For A Clear Look At The New Future. The core focus of this Workshop will be on how air transportation has and will evolve as part of this communication system, and how simply chasing after “commercial service” or “scheduled flights” at the local airport, outside of the context of the new communication systems is like blindfolded kids swinging at a pinata.  Fun, but it accomplishes nothing in the real world.

A wider and more comprehensive approach to the future is needed, and more “leakage analyses” or “true market studies” are the equivalent of expensive intellectual pinata programs that often only lead the community away from developing global air access solutions.

Join Us At The Only True Aviation Forecast Event. This Workshop is one of four planned for the afternoon of August 25, as part of the 24^th annual International Aviation Forecast Summit, being held at the Wynn/Encore Resort in Las Vegas. It’s August 25-27th.

The complete line up of Workshops will be announced shortly, and they’re just the start of the only true aviation forecast event in North America.

No pre-set “panels. Instead, there will be data and trend projections important to all sectors of the industry. Plus, exploration sessions with the industry executives who will be shaping the future.

For more information and to register, click here.

At the IAFS, there are no comfort zones – we take on ambient thinking, and attendees get the competitive edge in planning for the future.

The NextGen Fiasco Continues.

Crowding Skies – Another Myth

One of the throw-away lines in a lot of aviation media stories is how the FAA’s air traffic control system is struggling to cope with increasingly crowded skies.

It’s actually malarkey… take a look at the US airline system for the full year 2018 v 2007…

The skies have over 1.2 million fewer departures in the skies than a decade ago. More seats, due to changes in fleet mix – but a lot fewer airplanes.

Yes, this is slowly rebounding, but the fact is that today airlines are adding minutes to their schedules to accommodate the inefficiencies of the ATC system… and still, an arrival score of 85% within 15 minutes of schedule is considered an achievement.

But NextGen, a carrot-on-a-stick program consuming billions, is not to be questioned.

Even though it is years late and mired in unfocused bureaucracy.

Just do a check of the “progress” and the PR-jive at the FAA over the last 25 years… Lord knows the usual suspects in the aviation media aren’t doing it.

International Access… It’s Just Starting

New-Generation Single-Aisle Airliners Will Open Whole New Markets

With new fleets, new mission capabilities of next-generation airliners, and massive increases in international business flows, we’ve identified the top dozen US markets in line for new service across the pond.

These are airports our research indicates to be in line for EU/UK nonstops in the next 36 months. Each one has a different set of projected criteria. The demand drivers for Albany are different from those at Louisville, as are material differences between Memphis and Columbus.

But they all have key dynamics that point to high value for feed over EU airline hubs – particularly BA at LHR.

The chart does not include airports already in the true international play – such as Indianapolis, Nashville and Pittsburgh.

The key to identifying new trends is in first questioning the foundations of traditional thinking, and then exploring the shifts that are taking place in technology, aviation economics, global business flows, and emerging logistical shifts.

At the 2016 International Aviation Forecast Summit we had a session that outlined the future dynamics of international air service, and pointed out that it will be internal, non-hubsite US airports that will be in the crosshairs of market planning for carriers in the EU and UK. We noted how points such as Indianapolis, Nashville, Austin and New Orleans were targets due to the feed they can generate over an EU carrier’s hub – particularly British Airways at Heathrow.

At the 2018 IAFS™, we outlined how new generation airliners will open international service to commercial points (not just large population centers) on the East Coast. Two months later, one of those potential examples – Charleston – announced BA flights to London.

Traditional Demand Drivers Are Out. The key point is to understand that the new criteria for this expansion no longer gravitates around local population, but instead a range of economic dynamics. This includes the composition of the regional industrial base, the accessibility to a wide feed area (ground hubbing) and the nature of international investment accessible.

The IAFS™ – Challenging The Future… Instead of Discussing The Past. This is just an example of the range of futurist thinking presented at the International Aviation Forecast Summit. We go beyond pre-defined “subject panels” and get right into issues that define the evolution of aviation in the years ahead.

Plus, our distinguished presenters – CEOs and senior executives – join us to discuss their independent view of the future of aviation.

Join Us, August 25-27 In Las Vegas. This year, we’re at the fabulous Wynn Encore resort, with special rates for Summit attendees. And Early Registration rates are also in effect.

So, click here for more information and to register.

Expanded international access is just one of the many emerging trends that the IAFS™ will be discussing. We look forward to seeing you and having your input at this #1 industry event.

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Update: 2019 Small Community Air Service Grant Program

The Government Accountability Office (GAO) last week issued a report on the status and progress of the SCASD program.

This may be the reason that there was no 2018 docket, and no indication of a timeline for the 2019 SCASD docket, either.

In the report, the GAO concluded that the DOT’s stated criteria for grant issuance, and that actually used in the decision process, were fundamentally inconsistent. In an analysis of grants between 2010 and 2014, the findings were that the DOT needs to be far more clear on how they are making determinations.

The DOT apparently promised to provide revised and clearer guidelines, but as yet has not provided them. It’s likely that these will be inherent in the 2019 docket, when it is issued – or whenever it is issued.

Get Ready… Be that as it may, we might expect the DOT to issue the 2019 docket at anytime, along with more clear discussions of how they make grant award determinations.

If your community is contemplating making an application, give us a call and we can explore the possibilities. The airline industry has completely changed since the SCASD program was started in 2002, and the potential applications for a successful grant have shifted, too.

Our Track Record – Unrivaled. Airports across the USA today are enjoying air service facilitated by our SCASD grant strategies. Here again, no other consulting firm can even come close to our track record.

No room to list them all from 2002 to today, but here are just a few examples among the airports we’ve assisted in winning more than $25 million since the program began…

• Sarasota-Bradenton, FL successfully recruited low-fare service from AirTran, facilitated by a $1.5 million grant – the largest successful grant in the program’s history. The result was a nearly 20% increase in enplanements.
• Charleston, WV today has nonstop service to Houston, meeting the needs of the petro-chemical industry in West Virginia, as well as opening an additional western gateway for the region.
• Santa Fe, now has very successful service to the AA hub at PHX, thanks to an effective grant application from BGI.
• Bozeman has new access to American’s global hub at DFW, incubated by a BGI-crafted SCASD application. .
• Spokane gained nonstops on Delta to LAX, opening Southern California to Eastern Washington.
• Richmond was awarded a grant that allowed the airport to recruit United service to Denver.
• Traverse City today has new service to DFW, which is a major boost to the region’s summer tourist industry.
• Springfield-Branson Regional topped the 1 million passenger mark in 2017, partially due to new service to Charlotte, supported by a successful Boyd Group International SCASD application.
• Bangor has successful United service to ORD, which was facilitated by a BGI SCASD grant application. The additional fallout is that United has found the BGR market to be so successful that they’ve added two daily flights to New York/Newark.

We look forward to adding your airport and community to this growing list in 2019!

A Lot of Media Standards Have Joined The MAX – Grounded

“Boeing Charging Extra For Safety Equipment!”

This was the din last week across the media landscape…

It seems that nasty old Boeing is charging airlines extra for what has been implied to be necessary and basic safety equipment. Things that, according to some stories, supposedly could have avoided the Ethiopian crash.

Rarely has me-too, wildebeests-in-a-panic journalism done such a deep dive into the professional cesspool.

We’ve talked to several news teams over the past week. Most are completely focused on facts and getting out reliable information.

But there were also a number oh-so-righteous talking heads – in the US and internationally – that have effectively brought out the journalism noose to lynch – right now! – these evil people at Boeing.

Naturally, they have no idea what they’re talking about, before lighting up the torches, ready to urge the great unwashed out there in TV Land to march on Renton.

“Why, that should be standard equipment!” one UK interviewer shrieked, assuming that a 737 has a basic window sticker like a Jaguar in a showroom. And not having any idea what “that equipment” was in the first place, standard or otherwise.

‘Course, they don’t have a clue about the subject matter. But it has made great press, and in a lot of sectors it’s been swallowed whole like smelly fish at a seal convention.

That 737 Was Equipped Exactly As Ethiopian Wanted It. What these amateur folks – some even at a couple of big media outlets who should know better – have ignored, is that airliners are spec’d out by the buyer, who adds exactly the features and capabilities it desires, including cockpit and navigation equipment. And each part of this has a price – there is no “standard” 737 cockpit, per se.

Each fleet leaves the factory with exactly what the airline wants. And it leaves as deemed safe to fly by the operator and the FAA, and, presumably whatever regulatory body might exist in the airline’s home country,

Ethiopian’s 737s are no exception. The stuff in the cockpit is what they wanted to include. The airliner in question had whatever features that were deemed safe and necessary by Ethiopian Airlines.

So, if these oh-so-righteous lynch mob journalists are so eager to find an evil demon in this, they might have better (although just as amateur and misleading) have printed:

“Ethiopian failed to equip their cockpits with adequate safety equipment!”

But It Is In The Cockpit, Not Seattle, Where The Proximate Causes Are...  A lot of the coverage of this tragedy has wandered off into the weeds… focusing on issues such as Boeing and the FAA getting too cozy, and/or the 737 MAX not being certified properly.

At the three US MAX operators, subsequent to initial problems and to the Lion Air crash, actions were taken with the result that the 737 MAX was deemed to be safe.

The media doesn’t get it… if the US could make this so, there is no reason that other carriers could accomplish the same. That points in a whole different direction than investigating the traditional certification process of US airliners. A much more compelling direction.

So, aside from the clear knowledge that the 737 MAX was safe as operated in the US, we also know that there are severe open questions regarding the operators of the two airlines involved in these accidents.

Whether or not Boeing and the FAA are having cocktails together, and having the FBI investigate the certification process, have zero bearing on the events that took place at Lion Air and at Ethiopian. They are massive distractions.

But that doesn’t make much exciting press, apparently.

If reported clearly and directly, without political intervention, the black boxes may likely be telling a very different story.

The 737 MAX Situation –

Laying Bare Another Global Safety Issue

Probably by the end of this week, the situation with the 737 MAX will be clarified, and barring any political shenanigans, it’s in Boeing’s court to revise whatever systems need to be addressed so that the airliners can return to the skies.

However, this entire event has illuminated another potential global safety issue that affects the air transportation system outside of the United States…

Grabbing A Politically-Incorrect – But Accurate – Third Rail…

Although the usual-suspect cognoscenti sneered at it, President Trump’s comment/observation that we may be building airplanes that pilots don’t know how to fly is accurate.

Not for US airlines, certainly, as forcefully put into the forum of discussion by the labor organizations representing pilots and technicians. We are safe, with the standards and the quality of the people at America’s airlines.

But when carriers like Ethiopian are finding it necessary to staff cockpits of sophisticated and technologically-demanding airliners with pilots holding only 200 hours of flight time, the President’s observation is on the money.

It begs the question whether the same levels of relative experience are present in other areas of operations.  Like, maintenance, where it’s no longer a matter of just turning wrenches, and a lot more training is needed to support fleets.

This means one of two things – either airliners need to be designed to need less experience in the cockpit and in the maintenance hangar (which is an absurd direction), or the airlines buying these machines need to assure that they have the expertise to operate them.

Carriers from any part of the globe wanting  new airplanes can arrange the financing or lease deal, take delivery, and fly the planes home from the factory… but whether they have the management expertise, maintenance & training support and pilot resources to operate them, well, Boeing or Airbus can’t control that.

The revelation that Ethiopian is putting amazingly low-time pilots in the right seat would point to the second conclusion – it’s the operators that are the weak link in the safety chain.

The question not being pursued is that this tragedy has illuminated another potential safety issue… the planned growth of national carriers at smaller nations also raises questions regarding the qualification levels that may be in place in those regions.

There is the appearance of a safety hole – one that up until now hasn’t been pursued.

Moving On In The MAX Arena…

Potential 737 Order Cancellations.  Aside from the 202 737s on order at Lion Air, there are not likely to be any long-term effects on the 737 backlog. Not real pleasant for Boeing – at current production rates, this equates to the equivalent of almost four months of production.

But the Lion Air order has been in question since the crash of that carrier’s MAX airliner last fall. Lion Air also has over 200 A-320 platform units on order.

Long-Term Affects on US Air Service. As it stands today, there are no long-term downsides apparent for US airports due to this situation. This is based on the assumption that there will be resolution within four to six weeks and then 737 deliveries restart.

However, in the (hopefully) unlikely event that 737 deliveries are delayed for several months, there would be some restructuring of air service patterns.

But don’t make book on this potentiality.

There Are No Other Airframe Manufacturer Options. Some speculation has been made that China’s near-immediate grounding of 737 MAXs was part of a plan to get more orders for its indigenous C919 narrow-body airliner.

Not likely – the C919 has years to go before it’s ready for global prime time. It’s years from being in full production, let alone being honed to meet performance specs to match 737s and A-320 platforms. The chance of an airline in the US or the EU switching to a C919 order makes lottery odds look like a sure-thing.

Point: For new airliners, Airbus and Boeing are the only games in town, and Airbus doesn’t have the production capacity to take on a majority of the current Boeing demand. Embraer’s commercial airliner program has been acquired by Boeing. The huge potential for Bombardier to break into the narrow-body market ended with the Airbus acquisition of the CSeries program.

Also – missed by a lot of veneer “experts” – it’s a real challenge for a Boeing operator to just shift into Airbus operation… and costly.

Again, it’s likely that the smoke will clear by the end of the week – certainly the next 2 weeks.

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The Air Traffic Control Mirage

August, 1994.

Congressional hearings were held regarding the challenges facing the nation’s air traffic control system.

They were prompted by a study issued by what are now Boyd Group International and the ATH Group – Free Flight – which outlined how such a system could be implemented safely, using existing technology, materially increasing air transportation efficiency.

The FAA was there in full force to defend its stellar record of botched ATC upgrade programs, replete with impressive video demonstrations of their great progress and planning – not to mention the expectation that a new ATC system would be in place by year 2000.

Right. That was a quarter of a century ago.

Today the FAA is saying several more years before the system will be completely ready.

Wow Them With Technology… Skip The Track Record. The amazing part of this is that the FAA still has credibility in regard to ATC modernization.

They have friends in the media. A couple times a year, there’s usually a big article in some paper or outlet, about how the FAA’s NextGen program is moving our air transportation system into the future. They outline all the supposed alphabet-soup whiz-bang systems, and typically rely on the public to accept that it’s going to be satellite-based, instead of radar-based.

‘Course, what that by itself actually means in regard to improving efficiency isn’t mentioned.

It’s a simple PR approach. Some journalist gets invited to the FAA’s facilities, and, voila!, walks out with all the latest glowing news about how the agency is fighting hard to deal with all burgeoning increase in flight volumes across the nation. The reporter has the true skinny, no further information or fact-checking is needed. He’s now a mouthpiece for the FAA.

And not a scintilla of any attempt to check the source, which historically is about as reliable as Baghdad Bob on a bad news day.

Here are a couple of facts to consider:

Point: NextGen is a multi-decade re-named wallow in shifting goals, changing deadlines, and more delays than the Italian railroad system. Any journalist covering the program should be ashamed if this track record is not included in the coverage. It usually is left out, and if not, it’s whitewashed with the nonsense that it’s been lack of consistent funding that’s been the cause.

This despite GAO report after GAO report pointing to failures at the FAA – and not primarily funding – as the cause. Naturally, that’s background that is usually not pursued.

Point: The rate of airline flights arriving off-schedule has not materially improved, even in light of billions spent on NextGen. Understand – they are more than just “delayed” – because airlines already plan their schedules based on the limitations of the ATC system to start with. In effect, most flights are “delayed” from the schedule they could attain if the ATC system was properly modernized.

Point: And, the usual fodder in these stories – that air traffic is growing – is a key part of the nonsense. Reporters may compare 2017 to 2018, but what they leave out  is that US airlines today are still operating 1.2 million fewer annual departures than in 2007. Figure about 3,300 fewer flights to manage each day.

That’s about 12% less, and even in light of all the money and hype around NextGen, the rate of off-schedule flights hasn’t markedly improved.

This is the real message regarding the FAA’s perpetually delayed yet always on-schedule “NextGen” program.

Sure, lots of new equipment is in use. Lots of planned upgrades coming. But no accountability for real results – improving the efficiency of the management of the sky. Sure, the FAA and its media groupies will claim that lots has been done… but don’t question them about the track record of false deadlines and non-results of the FAA over the past 30 years.

Reform? That’s Just Changing The Name on The Door. During the budget debates, there was lots of babble about privatizing – “reforming” – the air traffic control system. The unfortunate part of this was it was engineered to preserve the very non-progress seen currently. All of the “reformistas” swore allegiance to NextGen, instead of demanding results.

Going forward, we can confidently predict that this silly and expensive Kabuki Theater of non-performance will continue. And we can confidently predict, that as long as they are promised access to, and a b-roll session with, the Secretary of Transportation, a lot of the media will continue to be cheerleaders for the NextGen party line.

And consumers will continue to absorb billions in extra air travel expense.

Join Us At The IAFS – And Get A Clear Picture, Without Official Hype.. It’s time the airline industry took back control of their production line. Fire-and-forget departure systems (i.e., let the FAA manage it) departure systems are safe, but woefully inefficient.

To be sure, this is not consistent with accepted consensus thinking… nor with the official Washington party line. And to read some of the drivel being published about NextGen, it’s flat-out heresy. But we deal in facts, not political correctness.

We’ve covered this annually at the International Aviation Forecast Summit – and we can point out that our predictions that the FAA’s programs are not improving on-time metrics have been right on for the last ten years. Other conferences have welcomed FAA officials to come and share the official party line – which educates nobody.

If you are planning for the future, you must question the status-quo. it’s important to understand the past and the emerging trends that will shape aviation. That’s what the IAFS is all about.

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The 737 MAX Issue – In Context

With the media coverage expected in the next 24 hours regarding the fallout from the accident in Ethiopia, some context may be needed regarding expected fallout.

Plan on some strong action if the CVR and black boxes from the crash indicate any similarity with the Lion Air event of last year. It’s already started, however.

China has already grounded the 78 737-MAX aircraft operated by its national carriers, pending the outcome of the Ethiopian investigation. These aircraft represent approximately 1.6% of the total Chinese airline fleet.

China: Not A Trade-Issue Question. It has been logically posed whether the Chinese grounding might have some political motivation due to on-going trade issues with the US and the dust-up from the Huawei events of the past month.

No way. The CAAC is not playing political games here – they are focused on safety.

Political decisions are carefully contemplated in regard to long-term retaliation, push-back and other tactical considerations. Safety decisions are immediate, as was this one on the part of the Chinese government. By the way, the Chinese aviation regulations closely mirror those of US FARs. We are dealing with a very sophisticated system of oversight in China.

Keep in mind that the grounding decision made by the CAAC will have negative effects on the Chinese air transportation system, which is already stretched system-wide at an 82% load factor, according to Boyd Group International’s Airports:China forecasts. In many cities, any loss of service does not always have any regional airport alternatives. The government is well aware of this, so it’s clear that the decision is based on safety. Period.

The Potential US Air Transportation Effects – Minimal In Almost All Cases. We may have veneer stories come out regarding the huge number of 737s in US operation, and a conclusion in some parts of the media that in the event of a grounding or other regulatory action, the US air system could be flummoxed.

No way.

This event revolves only around the 737 MAX aircraft. Out of approximately 6,750 active turbojet airliners in US airline fleets, today there are only 72 MAX-8/9s in US operation – just about one percent of the total. Enough to cause some localized cancellations in the near term in the event of a temporary grounding, but not enough to materially change the US air transportation system.

Getting an exact handle on numbers of airliners actually operating (as opposed to just being listed as in the fleet) is difficult, but the Boyd Group International Global Fleet Trend & Forecast indicates the following, for all MAX variants, 7/8/9/10:

Overwater Long Haul – Some Temporary Fallout. The 737-MAX series is a very mission-flexible airliner, and there will be some noticeable fallout where route missions depend on the specific performance of the MAX aircraft – such as long-haul over water flying, which is increasingly being operated in Northeast US – trans-Atlantic routes, and West Coast – Hawaii.

In any event over the coming week, it needs to be understood that there may be no relation in regard to the Ethiopian and Lion Air events.

And most importantly, the situation will be resolved likely within days should that be the case.

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