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Federal Air Service Programs:

They’re Political Footballs, Mostly

Here’s what you won’t hear from other consultants, particularly the ones that feast on selling “air service development” programs…

It is time that federal air service programs were either brought into reality, or cancelled completely. They assume an air transportation industry that no longer exists. As it stands today, they tend to distort the free market and mislead communities away from developing true programs to access the global economy.

In the case of Essential Air Service, it has mostly degenerated into a system where a “hunter-gatherer” operator (one that is mostly in the business of taking on subsidized service, instead of having its own route system) gets paid to fly into a selected airport, simply because the obsolete belief is that just having “flights” is the same as “air service.

Result: hundreds of millions of taxpayer dollars wasted on flights that pander to political ends, not air transportation.

SCASD is built on the assumption that without air service at the local airport, small communities are cut off from the world. It also assumes that there are lots of airlines with the fleets and route systems just waiting for a grant before they enter the market. Both are bogus assumptions.

In fact, it is relatively well-served mid-size airports that have gained the benefits of the SCASD program, which is very positive. But it also shows that there must be other communication modes pursued for small rural communities. The program should be continued, but without the misleading sham that it can bring air service to “small airports.”

Fix Them. Or Cancel Them. Fact: air transportation as a modality today represents hard realities that both the EAS and SCASD programs – not to mention dozens of “air service development” programs – completely ignore.

Let’s take a look:

Reality One: The Airline System Is Not A Mystery. It’s Transparent

In 99% of cases, with the consolidated system of 2017, it isn’t necessary to inflict “market studies” on communities to identify potential carriers – or, in many instances, the non-existence of a potential carrier.

What this means is that in most cases it’s an outreach to the obvious carrier, comparing its strategies and fleets with what the community can deliver. Then should come any further analyses – if the carrier is interested, that is.

Recently, a small airport in the Midwest announced that they were seeking to “lure” carriers – apparently any carriers – to operate flights to Denver and Dallas-Ft. Worth. That certainly doesn’t take a study to identify the targets, although they were probably convinced otherwise.

For a small community, the only option to DFW is the AA system, and to Denver it’s United. End of search. The don’t need the perfunctory consultant voodoo of a “point-of-sale” analysis of “real market study” to discover this.

That’s it, because the local O&D at small and mid-size airports isn’t enough to support nonstops to places such as Denver and DFW without connect traffic, and – something apparently not disclosed to the airport – there are no other carriers in existence with the fleets, the strategy, or the network that would chase after such a route.

But, if the community is advised of these facts right up front, it would shortstop a lot of consultant study revenue.

The same is with the application of EAS and SCASD dollars – it is the responsibility of the community to clearly understand the airline business realities before chasing off to recruit air service.

More importantly, it is the fully responsibility of the DOT to know the airline business and have a reasonable expectation that the intended application has a reasonable chance of success, within the realities of the airline industry, instead of outdated assumptions of an airline system that no longer exists. That is not the case today.

Reality Two: The Goal Is Not Scheduled Service. It’s Global Access

The assumption is made, both within the foundation of EAS and SCASD programs and in many ASD adventures, that having scheduled flights at the local airport is the goal. Wrong.

What missing with this belief is the entire objective for air service in the first place: a transportation option that gets consumers to and from the rest of the globe.

For example, a couple of Cessna Caravans to Nashville might satisfy the local politicians, but it isn’t “air service” because it can transparently connect to nothing – WN doesn’t interline, and no carrier banks flights for connectivity there.

Therefore, most of the EAS program is geared to deliver “flights” and not air access. That must change. If there isn’t an entity that can provide meaningful connectivity, an EAS subsidy is a giant waste of money, and should not be awarded.

This means the criteria for EAS service needs to change from just “flights” to “access.”

Reality Three: Air Travel Is Multi-Modal. And It’s Often More Efficient Than Local Service

Today, the EAS and SCASD programs are based on the assumption that service at the local airport is always more consumer-preferred and consumer-efficient than other options, such as a 60-90 minute drive to another airport.

Flat out wrong – and an assumption that inflicts millions of wasted dollars on the taxpayer.

It’s amazing to see communities convinced to do unscientific “surveys” that generally only ask the question “Would you use the local airport” and then trumpet the results as proof that United or American or Delta, or one of those mythical “other airlines,” should come to town.

Of course there’s nothing in the survey regarding things like schedules, airline brands, type of service v other options, etc., making the whole survey useless.

It’s also a de facto disservice to small communities not to fully disclose what the competitive options are compared to any proposed local service, before doing an “air service development” project. In fact, this should be a prime new criterion for the award of any EAS or SCASD dollars.

In our Air Service Access Workshop presented at the 22^nd International Aviation Forecast Summit, we used Topeka as an example. A SCASD grant was used to support the implementation of two United flights to that carrier’s global connecting hub at ORD.

Unfortunately, the superior air service options open to consumers at MCI effectively rendered the FOE-ORD program DOA. To virtually any destination, the 60-75 minute drive still represented more time-effective transportation than consumers trying to shoehorn their travel to fit the two connecting flights over Chicago.

Apparently, this reality was overshadowed by the obsolete notion that local air service is always preferable. Message to the DOT and to ASD providers: that’s yesterday’s thinking.

Where From Here – Essential Air Service

In the Lower 48, the DOT must immediately re-structure the EAS program to assure that it delivers connectivity, not just scheduled flights. (Alaska is an entirely different situation and should be taken separately from the current EAS program.)

Twenty years ago, at an early BGI Aviation Summit, the point was made that EAS should be for flights to a connecting carrier’s hubsite, on the brand of that carrier.

Today, the only EAS markets that are even vaguely successful are those that meet that very set of criteria.

However, there are clouds even in these cases.

Typically, where there is AA or UA-branded EAS service, it is made possible only by the fact that the operator has some 50-seaters that are excess to their fleet needs and which will be coming off lease. When that happens, these airports are back to the pool of independent, mostly turboprop “hunter-gatherer” operators who are in the business of simply taking on subsidy flying.

What we are ultimately facing is that the EAS program is becoming a financial millstone on the DOT, fully unable to deliver core air service access.

Rural areas need to get prepared now for what is already a reality in many places: other modes of transportation will need to be relied upon. Air transportation does not work, anymore.

For places where EAS money is being wasted due to other and better regional options that consumers are now actually using, such as Muskegon and Pueblo, the hit of losing EAS funding won’t be a hit at all. It’s already been experienced. Consumers are happily driving to  Grand Rapids from MKG and to COS from Pueblo.

But for communities that are truly isolated, such as regions of Wyoming, Montana, Kansas and Colorado, there is a bullet that needs to get chomped on very soon: The air service cavalry is not coming. That means reliance on ground transportation will be the future norm.

Where From Here – Small Community Air Service Grant Program

There have been demonstrable successes with the SCASD program, and Boyd Group International is proud to have assisted clients in gaining over $24 million since the program’s inception in 2002.

However, the SCASD program has never been funded properly, and it is still based on the fundamentally-flawed assumption that every small airport should have scheduled flights. Furthermore, the basic qualifications for submitting a grant are out of date, based on airport passenger rankings of 20 years ago.

Let’s cut to the chase. The ability of a $500K to $1.5 million grant attracting viable air service into a small rural community that has very low population is zero. Zero.

To begin with, there are no airliners that can make it work, anymore. Secondly, as noted with the EAS program, as well as the SCASD experience in places like Topeka demonstrate that the potential for meaningful improvement at rural airports is overshadowed by the realities of the economics of airline operations.

But where the SCASD program has shown success has been at mid-size, relatively well-served airports that have been allowed into the program. Spokane has flights to Los Angeles today because of the SCASD program. Charleston, WV received nonstops to Houston, etc. Here, SCASD has been a success, albeit not for small rural airports.

Therefore the SCASD program should be widened to be one that can be applied for by a wider range of communities. We’ll be blunt: No SCASD grant is going to bring viable scheduled service to Sand Point. But it has opened Bangor to access to United’s hub at Chicago.

That is he lesson from almost two decades of the SCASD program. As a vehicle to get more service to small rural airports, it’s largely been a dud. But for a bit larger, currently-served airports within a shrinking airline system, it’s done well.

Direction: Forget the intention of bringing service to small airports where nobody can use it and where economically-viable connectivity is not possible.

In effect, with past grant awards at places such as BGR, GEG, and CRW, SCASD awards have been consistent with the #1 trend in air service access: regionalization.

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 The New DOT Regime.

Initial Indications Are Uncertain

Major rethinking is imperative at the DOT. New policies. A trashing of the inept NextGen program and replacing it with an accountable and workable program. EAS and SCASD programs in need of restructuring. And more.

The  selectee for DOT Secretary has been there before in a secondary position.

This could be positive – as she knows where the operational skeletons are buried. Or, it could mean more of the status quo.

A challenge that must be immediately dealt with is the rising din in regard to “reforming” the air traffic control system. That in itself is an open issue, but none of the people  – zero, zip, nada, meiyou – who are calling for privatization have ever noted the incompetence of the current system or tumbled to proven the fact – fact – that NextGen is an on-going failure.

The new DOT secretary has said she’s open minded on ATC options. Not necessarily a good sign – we need a very closed mind – one that has a clear leadership direction and solid plans for rebuilding ATC. The committee-let’s-all-discuss approach is the reason NextGen is a failure in delivering demonstrable results in air transportation efficiency.

At this point, we could have a very innovative four years ahead, or just more of the same. The new Secretary needs to come into the job in full metal-jacket mode and take no prisoners.

The DOT at the top has been a repository for political hacks with zero expertise. The current ex-city mayor, for example. Rodney Slater, who was clueless. And how ’bout LaHood? Heck, a freshman at Embry-Riddle would have been much more effective.

This appointee has been there before. We have hopes, given the tone of the rest of this incoming administration, that the past won’t be continued.

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2017 Enplanements –

3.5% – 4.0% Growth, But…

It’s With A New & Emerging Airline Structure

As we will cover at the 22^nd Annual International Aviation Forecast Summit in August, the structure and flows of passenger traffic across the US will represent major shifts in enplanement levels at airports across the nation. Further, the use of airliners will divide between air access, and impulse traffic.

The first represents connectivity to the global economy. The second represent use of aircraft to provide a product that competes with other spend options for consumers’ discretionary dollars.

The Emergence of Impulse-Traffic Airlines. There are now three basic airline business models in place…

The first is the traditional network carriers, where traffic is generally based on air transportation needs. The next is the emergence of ULCCs – Frontier, Spirit, and, increasingly, Allegiant – which tend to create net-new impulse traffic based on low fares and very high cabin density. To be sure, there are fuzzy areas of overlap in the passenger bases of these two airline genres, but the focus of the latter category is mainly to divert discretionary dollars into travel that might otherwise not be taken in the absence of a very low fare.

It’s unclear how these two airline business models will co-exist, particularly as AA, DL and UA attempt to provide a bare-bones “basic economy” fare bucket that delivers a product that mimics that offered by the ULCCs.

The third airline genre are the small-aircraft hunter-gatherer category – the ones with no real route system of their own, but are in the business of flying where a subsidy is available to support flights. This is a valid business model, but in most cases it is not one that’s really focused on air connectivity, but instead simply having flights at a local airport. Flights that in most cases, not many consumers use, such as EAS points.

There’s Air Travel, And Then There’s Air Access. The clear emerging picture is that passenger traffic volume is no longer necessarily indicative of air service access. We’ve used in the past the example of Youngstown. It has well over 100,000 passengers, but it has zero air service access from the rest of the world. It only has impulse leisure service to points in Florida.

Youngstown’s airport gateways are at PIT and CAK, and that won’t change. With shrinking fleets of small jets, American, Delta or United aren’t coming YNG, and shifts in the composition of small carriers-of-opportunity (who are in the business of meeting the expectations of subsidized markets) are not likely to ever deliver fully-connective air service.

This, plus the continued re-fleeting of the First Universe carriers, will continue to result in the majority of enplanement growth in 2017 gravitating to larger airports.

This will further illuminate another major change in 2017…

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2017: Realities Overcome Obsolete “Air Service Development”

The biggest emerging trend in air service in 2017 will be the recognition of airline industry realities in regard to small community air service.

It’s Called Full Disclosure. Fact: if the truth about what the US air transportation system can and cannot do, and the truth about the economics and structure of the airline industry were clearly and honestly imparted to small airports and communities, a lot of “market studies,” and leakage analyses, not to mention the expensive trip to the speed-date event – would be cancelled tout suite.

In 2017, more and more small communities will start to recognize that “air service” is not just having scheduled flights at the local airport.

The future is assuring that the region has air access from the global economy, and by the nature of air transportation economics, that means in many cases it is not possible to support viable, consumer-useable air service at the local airport.

The Players In The Airline Industry Don’t Need A “Study” To Be Identified. Fact: any “ASD” program that doesn’t start right out by revealing the realities and structure of today’s air transportation system, is clearly and distinctly withholding key information from the client. That is not professional. It is not beneficial to the client, and in fact, any consultant should know better.

The carriers that have the systems, the networks, the fleets and the strategies that might fit with addition of service to a small community are as obvious as a blemish on prom night, right from the start. That’s go-no-go on doing an further work. Otherwise, the community is just being led into the woods. But it’s not surprising. Full disclosure is sometimes has a wide definition. We found one entity noting its corporate offices at a street address with an office suite number. It turns out that the address is the local post office and the “suite” is just a post office box.

The Examples Abound. Chasing studies before full understanding of the airline industry can be a dead-end. We’ve seen it demonstrated in service failures at Topeka, Modesto, Youngstown, Bowling Green, for starters. Lots of money spent on ASD studies, but the economic and consumer aspects were not explored. The entire necessary analyses of competitive-connectivity – which is a fundamental component of the viability of an air service route – are usually left out.

In 2017, More Communities Will Refocus On Access, Not ASD Schemes. Politically-demanded “air service” is often what consumers can’t use, and often not competitive with other air access options local consumers already have. But the hard realities that caused the failure of these doomed-from-the-start local air service attempts were clear.  The communities simply were not clearly and functionally made aware from the start that the economics, operation, and structure of the air transportation system are often galaxies away from what they may assume to be the case.

It is a consultant’s responsibility to make them aware of this before that 60-page magnum-opus study is done. The current trend of doing a “study” to “lure an airline” before fully disclosing to the client exactly what those airlines are, and whether they have the fleets and strategies to make service viable,  is the same as convincing a community to build an off-and-on ramp before telling them if there’s a highway there in the first place. In short, it’s snake oil.

Bottom line: In 2017, more and more small communities will begin to see beyond the snake-oil studies, and refocus on assuring that they have air access channels from and to the global economy. That will in some cases mean the need to re-think multi-modal access via regional airport gateways.

Topeka, noted above, is one such example. Today, the air access for the region is via MCI, where there are over 50 flights daily, and – truth be known – consumers from Topeka have better, more-time efficient air service than what can be supported at FOE.

Regardless of any pandering studies, the fact is that the consumer and the realities of air transportation economics have combined to make Kansas City Topeka’s gateway from the globe.

What this means: rural communities will start to re-think two key areas. The first is the business development potential of their local airport.

The second is to bluntly review development of air service access to their region – and it’s not always going to be at the local airport.

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Cuba Air Access – Reset Coming In 3Q

As is being already experienced, the expectation of “pent up demand” for Cuba air access was in large part travel industry hype.

It’s near certain that by the start of the third quarter of 2017, a lot of the service awarded to secondary airports in Cuba will be cut back materially or terminated completely.

For example, there is no data to show that there’s enough demand from the US to Santa Clara to support daily 737 capacity. Most Americans are clueless about the place, and Cubans can’t travel freely out of the country, and there isn’t much there except some monuments to Che Guevara’s birthplace.

As we covered in the Cuba Workshop at the 21st International Aviation Forecast Summit, having Cuba route authority represents a huge future airline asset. Cuba has enormous – actually, incredible –  potential as a destination of US leisure travelers. But the emphasis is  on the word future.

Let’s be clear and forthright, instead of politically-correct: unless the current government system that has trashed Cuba into the Fifth World moves on to the happy hunting ground, the “pent-up demand” stuff is just irresponsible blather.

No question it will change, but any of this drivel about flights right now bringing “better understanding” between the two countries is nonsense, particularly when the folks on one end of the conversation can’t – and don’t dare – speak freely.

This is the airline business, and being “politically-correct” is something that carriers cannot afford.

Cutbacks coming.

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Airport Infrastructure Investment – Vanity Projects?

The new president has claimed our airport system is Third World. He’s planning to spend lots of money on airport infrastructure.

The danger here is having better airport facilities confused with attracting better air service. There seems to be a lot of nonsense among politicians, and the monkey-hear, monkey-repeat media sectors that just building new terminals will increase local air service.

We saw this in September, when Elmira was given a $40 million state grant for new terminal and other facilities. The clear statements from the folks in Albany was that this would attract “more airlines” to the ELM market. It’ll reduce costs, see, and that will attract more flights from all those airlines out there.

American, United, and common sense didn’t get the memo. The two airlines left the market – and it had nothing to do with airport facilities.

It’s more illumination of the point made above – politicians, civic leaders often are living in a dream world when it comes to the raw economics of air transportation.

There are very real needs for more airport investment – but this is not going to reverse air transportation economics.

It will be very interesting how this process will be approached.

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EU Carrier Invasion of US Heartland.

In the past year, Boyd Group International was honored to have assisted New Orleans International in recruiting new flights to London on British Airways and Frankfurt on Condor.

Our forecast methodology focused on the different multi-modal structure of international traffic compared to domestic generation. For example, BA will be using MSY, but the service catchment area is based on much wider “road hubbing.” Example, the drive to MSY from Gulfport to get to London is actually faster than flying from the local airport and connecting at ATL.

Over the next five years, this will be the focus for new LHR flights – mostly via British Airways – at targets such as CVG, IND, MEM, SMF and several other non-hubsite large commercial centers.  There will be also interest in these airports as feed-generators for the SkyTeam hub at CDG and the Star Alliance hubs at MUC and FRA.

And we haven’t mentioned the Chinese carriers looking for US access. The traffic dynamics are entirely different from the EU, but standby for some interesting new entry in the next 36 months.

Airport alphabet groups in Washington, keep pushing for LHR pre-clearance. FRA and CDG, too.

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For More, Join Your Colleagues At The IAFS!

On August 26-29, aviation leaders will gather in Las Vegas for the 22nd Annual International Aviation Forecast Summit.

Issues such as those above are just the tip of the Summit’s scope. We don’t dance around issues – our incisive discussion format with decision-makers across the industry and across the globe delivers insight and business intelligence not found at any other event.

Register now by clicking here… SPECIAL EARLY REGISTRATION RATES NOW IN EFFECT.

The China Ni Hao/BGI McCarran Program

One Example of The China Ni Hao Approach

Probably every major airport in America will claim to have a “China ready” program.

But typically they only go part of the way – focusing on cultural training, with insufficient attention to the #1 reason to be “ready” – getting these guests through airports and other venues comfortably and with respect.

Culture Training Is Great. But There’s More. The China Ni Hao/BGI China-Welcome™ programs from China Ni Hao are focused on functional approaches to accommodating travelers from the Middle Kingdom.

Example: The McCarran International Airport

So, we’re proud of our part in making Las Vegas McCarran International the nation’s first airport that proactively and demonstrably is China-Welcome ™.

The China Ni Hao/BGI program at McCarran is engineered to assure that Chinese visitors feel comfortable and valued. The goal is to enhance communication on all levels of the airport-customer interface.

Digital Outreach & Information – In China. The McCarran program engineered by CNH starts in China.

Functionality means giving Chinese visitors the informational tools they need to make the most of their visit. Airports can be very challenging to new arrivals – particularly if they do not speak English. Take a look at just about any US international gateway airport – what Chinese signage is there is rudimentary and often laughably-translated.

McCarran is way beyond that. The Airport understands that word of mouth is one of the biggest generators of international destination decisions in China. That means making McCarran not only easy to use, but to make sure that Chinese visitors know that they can start their US itinerary more comfortably at LAS than any other US gateway.

Furthermore, now that more and more Chinese visitors are on individual itineraries, instead of guided tour programs, the need to make airports more China-friendly is becoming greater by the day.

S0, even before they leave China, McCarran International is already “in their pockets” with the most advanced, comprehensive and user-friendly WeChat app of any US gateway.

WeChat now has over 700 million users in China and is its most popular app. McCarran has developed a comprehensive WeChat mini-site designed to familiarize Chinese visitors with the airport before they even leave China and to give them a unique navigational tool once they arrive.

It is fully interactive and covers everything at the airport – directions, customs requirements, security procedures at the screening checkpoint – even a discussion of how dogs are used by the TSA to be “partners” in keeping our flights safe.

It also contains a complete directory of services, including ground transportation, concessions, and information specific to making their visit more enjoyable. All accessed via McCarran’s QR code, which is available in China, on the Hainan inbound IFE, and posters with the QR code in the Airport.

Personal Outreach: Welcome Ambassadors: McCarran International’s Chinese visitors will be greeted and assisted by the nation’s first fully-dedicated program of Huanying Ambassadors.

These Mandarin speakers, sporting easily identifiable red sweaters, will accompany Chinese visitors as they process through both arrivals and departures at McCarran.  All Mandarin speakers, they are in place to provide direction and welcome to these arriving and departing guests.

Signage and Wayfinding:  On arrival and departure, Chinese visitors will feel welcome and comfortable with the wayfinding system at McCarran.  

At key communication touchpoints, they will be proactively guided through the airport with informative signage and navigation mechanisms. This includes directions to log on to the Airport Wi-Fi and a QR code to connect directly to the airport’s WeChat app.

Today, McCarran is one of the few – possibly the only – US airport that has permanent signage to guide Chinese passengers at the security checkpoints. And the only one that has professionally-accomplished signage and wayfinding along the processing paths – inbound and outbound.

Concession Ready: McCarran has worked with its concessionaires to implement key programs such as acceptance of UnionPay cards (largest credit card in China) and development of items like menus in Chinese.

Attention to Detail: The program is built to address the anticipated needs of the Chinese traveler such as explanations on the WeChat app of the differences to expect in security processing and customs and even the availability of SIM cards for Chinese mobile phones. McCarran will monitor their Chinese passengers and add other items, as required, to ensure the system is updated to meet future requirements of these visitors.

About China Ni Hao

China Ni Hao provides a range of programs that give communities, regions, states and airports the necessary tools to attract Chinese visitors, the largest growth sector and the biggest spenders in leisure travel.

The China-Welcome™ program will give destinations a competitive edge in attracting Chinese visitors and delivering a seamless experience throughout their stay. China Ni Hao develops complete marketing programs from itinerary development to the creation of digital promotional campaigns, in China, to sell not just destinations, but specific packages, with measurable results.

More on China Ni Hao can be found by clicking here.

The Next Dimension In International Gateways

McCarran International:

America’s First Fully Functional China-Welcome Airport

On December 2, history was made – twice – at Las Vegas McCarran International.

The first milestone was the arrival of the inaugural Hainan Airlines flight from Beijing.

The second was that the passengers deplaned into America’s first fully-functional China-Welcome™ airport gateway.

This is a real milestone, and one that will be an example of how airports can engage in successful outreach for China access.

Click Here for details on how China Ni Hao and BGI deliver programs that focus on capturing more of this strong traffic at airports across America.

Supersonic Transport:

Moving From Ambient Thinking To Futurist Planning

On November 15, 2016, the expected and accepted future of intercontinental air transportation got torpedoed.

Not necessarily a surprising event, particularly for the attendees at the 21st Boyd Group International Aviation Forecast Summit last September, where Boom Technologies outlined the next step in air transportation.

Last week, the future started to arrive. Boom Technologies rolled out the full-scale model of its XB-1 supersonic demonstrator. It’s a one-third scale of its planned 45-50 seat Boom Airliner that is well under development.

The concept is a 2.2 Mach intercontinental airliner that will carry what is today front-cabin passengers across the Atlantic and Pacific in less than half the time of current airliners – and do so at fare levels commensurate with today’s business class prices.

The potential viability of the Boom concept was underscored by the range of leading aviation entities in attendance. General Electric, Honeywell, Rolls-Royce, NASA. Everyone was also honored to have the presence of some of the original engineers who actually were on the Concorde project many years ago.

Think of It Like The Front Cabin of A 777 That Flies Supersonic. Unlike the Concorde, the Boom Airliner is not envisioned to be one that will cater only to thin layers of high-roller traffic, paying an astronomical fare. Instead, the Boom Airliner simply will capture existing front-cabin traffic, at ambient premium fare levels.

No, there will not be full-flatbed seats with lush duvets for sweet dreams while crossing the ocean. No double-meal catering.

There won’t be time for these amenities – which are there only because the consumer is trapped in the 777 for eight hours. Lovely, lush, and comfortable. But there are two considerations: first, it costs the airline tens of millions to develop and deliver these amenities, and second, the time in the air allows this “entertainment.”

The Boom Airliner will not inflict the need to have seating that takes up the space of a suburban Japanese garden, and chairs that cost as much as a small tract house in rural Ohio. The need to stock several phases of gourmet food into galleys with the complexity of a McDonalds, will be an expense that also won’t be necessary.

With a just over three hours between New York and London, the service will be more like domestic first class.

The Passenger Segment Already Exists. The Boom Airliner will simply capture the current folks sitting in the front end of 777s, A-330s, and 767s. The premium customer will have two choices – ride an extra three or four hours and get a four-course meal finished off with creame brulee en crute, or be in London to do business three hours earlier.

It’s a no brainer. This airliner is going to change how premium customers fly. It will be a challenge to future airline strategies.

It also means that the intercontinental airlines that are first-to-market with this new airliner, will drain this premium traffic from competitors – regardless of frequent flyer loyalty. And by the way, that first-to-market carrier is already on the horizon: Virgin Atlantic has an option for the first ten Boom Airliners, expected to come off the assembly line starting in 2023.

The Concorde Experience Is Ancient History. And Ancient Technology. It’s understandable that a lot of folks in aviation are commenting that the Boom project is just another pipe dream. After all, they point out, the Concorde was a financial fiasco. In point of fact, this observation regarding the British-French product is entirely accurate.

Here’s fact: next year will mark the 50th anniversary of the roll-out of the Concorde. It didn’t fly for another 18 months, but the fact remains that the airplane against which  some people are measuring the Boom Airliner is approaching senior citizen status.

While Concorde was a techno-marvel for its time, it stands as an example to incredibly closed-minded and poor market planning. In fact, it’s earned a place in a great book titled World’s Greatest Planning Disasters.

The Boom aircraft is different from the Concorde: it is based on solid market vision, solid planning, and solid assumptions. And there is no government hubris involved – which was a major factor in the Concorde program. It’s all about business, not misguided national pride.

Re-Thinking Reheat. In addition, the comment also is made that there is no existing power plant adaptable to the Boom Airliner. Some of the folks parroting this nonsense couldn’t tell the difference between a jet engine and a Studebaker V-8.

One of the key advantages of the Boom Airliner is that it does encompass an existing engine core, and can attain 2.2 Mach without use of an afterburner – also referred to as “reheat” by engineers in the Mother Country. Here’s an ice-breaker conversation starter for the next boring cocktail party: when in afterburner, Concorde burned 78% more fuel, and for all that it gained just 17% more thrust.

So to compare the Boom Airliner to the Concorde is flat ridiculous. To maintain that the Concorde proved “it couldn’t be done” is akin to the folks who probably told Lindbergh not to take off, because so many others had splattered themselves trying to cross the Atlantic.

As an aside, one of BGI’s colleagues, Fred Johnson, was a trained mechanic instructor on the Concorde, when Braniff operated the aircraft in 1978-80. His take on the Concorde was that it was some of the finest examples of the best of 1960s technology.

Point: In September, at the IAFS, the world got a glimpse of the future of intercontinental air travel.

On November 15, it became official: Supersonic is the future.

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Moving From Ambient Thinking To Futurist Planning

On November 15, 2016, the expected and accepted future of intercontinental air transportation got torpedoed.

Boom Technologies rolled out the full-scale model of its XB-1 supersonic demonstrator. It’s a one-third scale of its planned 45-50 seat Boom Airliner that is well under development.

The concept is a 2.2 Mach intercontinental airliner that will carry what is today front-cabin passengers across the Atlantic and Pacific in less than half the time of current airliners – and do so at fare levels commensurate with today’s business class prices.

The potential viability of the Boom concept was underscored by the range of leading aviation entities in attendance. General Electric, Honeywell, Rolls-Royce, NASA. Everyone was also honored to have the presence of some of the original engineers who actually were on the Concorde project many years ago.

Think of It Like The Front Cabin of A 777 That Flies Supersonic. Unlike the Concorde, the Boom Airliner is not envisioned to be one that will cater only to thin layers of high-roller traffic, paying an astronomical fare. Instead, the Boom Airliner simply will capture existing front-cabin traffic, at ambient premium fare levels.

No, there will not be full-flatbed seats with lush duvets for sweet dreams while crossing the ocean. No double-meal catering.

There won’t be time for these amenities – which are there only because the consumer is trapped in the 777 for eight hours. Lovely, lush, and comfortable. But there are two considerations: first, it costs the airline tens of millions to develop and deliver these amenities, and second, the time in the air allows this “entertainment.”

The Boom Airliner will not inflict the need to have seating that takes up the space of a suburban Japanese garden, and chairs that cost as much as a small tract house in rural Ohio. The need to stock several phases of gourmet food into galleys with the complexity of a McDonalds, will be an expense that also won’t be necessary.

With a just over three hours between New York and London, the service will be more like domestic first class.

The Passenger Segment Already Exists. The Boom Airliner will simply capture the current folks sitting in the front end of 777s, A-330s, and 767s. The premium customer will have two choices – ride an extra three or four hours and get a four-course meal finished off with creame brulee en crute, or be in London to do business three hours earlier.

It’s a no brainer. This airliner is going to change how premium customers fly. It will be a challenge to future airline strategies.

It also means that the intercontinental airlines that are first-to-market with this new airliner, will drain this premium traffic from competitors – regardless of frequent flyer loyalty. And by the way, that first-to-market carrier is already on the horizon: Virgin Atlantic has an option for the first ten Boon Airliners, expected to come off the assembly line starting in 2023.

The Concorde Experience Is Ancient History. And Ancient Technology. It’s understandable that a lot of folks in aviation are commenting that the Boom project is just another pipe dream. After all, they point out, the Concorde was a financial fiasco. In point of fact, this observation regarding the British-French product is entirely accurate.

While Concorde was a techno-marvel for its time, it stands as an example to incredibly closed-minded and poor market planning. In fact, it’s earned a place in a great book titled World’s Greatest Planning Disasters.

Re-Thinking Reheat. In addition, the comment also is made that there is no existing power plant adaptable to the Boom Airliner. It’s a comment made by folks who in reality couldn’t tell the difference between a jet engine and a Studebaker V-8.

One of the key advantages of the Boom Airliner that it does encompass an existing engine core, and can attain 2.2 Mach without use of an afterburner – also referred to as “reheat” by engineers in the Mother Country. Here’s a ice-breaker conversation starter for the next boring cocktail party: when in after burner, Concorde burned 78% more fuel, and for all that it gained 17% more thrust.

Here’s some reality: Next year marks the 50th anniversary of the roll-out of the Concorde. That’s half a century ago.

To compare the Boom Airliner to the Concorde is flat ridiculous. To maintain that the Concorde proved “it couldn’t be done” is akin to the folks who probably told Lindbergh not to take off, because so many others had splattered themselves trying to cross the Atlantic.

As an aside, one of BGI’s colleagues, Fred Johnson, was a trained mechanic instructor on the Concorde, when Braniff operated the aircraft in 1978-80. His take on the Concorde was that it was some of the finest examples of the best of 1960s technology.

Point: In September, at the IAFS, the world got a glimpse of the future of intercontinental air travel. On November 15, it became official: Supersonic is the future.

 

THE MONDAY FLASH – INSIGHTS & PERSPECTIVES

October 31, 2016

Congratulations To Ontario!

Tomorrow ONT enters a whole new phase as a gateway to Southern California, independent from Los Angeles World Airports.

At a time when the entire global air transportations system is dealing with new traffic flows, the future for Ontario is exciting… to say the least.

Our congratulations to Kelly Fredericks and his team!

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Coming – Re-thinking Cabin Safety Instruction

The American Airlines incident at ORD, where (apparently) a catastrophic engine failure caused an aborted take-off, is likely to change the approach to in-cabin safety announcements.

Take a look at the pictures – passengers were taking their carry-on luggage with them – stopping to take it out of the overhead, through the cabin, and down the emergency slide… some clowns in the cabin of the burning aircraft were actually taking phone-videos.

All while the right wing was engulfed in flames and half of the emergency exits were blocked.

It’s clear that passengers are not taking these instructions seriously – regardless of comedic approaches to getting the information across. The subject matter is dry and airlines have correctly attempted to get passenger attention with innovative approaches to demonstrating safety.

But in light of the Chicago incident – it’s clear that even on AA – which at least historically has pretty much kept the videos more straight forward – passengers just don’t get it.

Point: it’s likely that any safety videos in the future will be given a lot more pre-installed scrutiny in regard to effectiveness to the message across.

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Second Quarter 2016 Data:

What The Numbers Really Illuminate

The challenge with any sets of data is not reading the numbers, but ascertaining their value in determining current and future trends.

That’s the foundation of Aviation DataMiner™ – and what sets this business intelligence platform apart from other sources. The 2^nd quarter 2016 DOT data is out, and, as usual, the media is abuzz making vapor-brained comparisons between numbers they don’t understand in the first place.

There are the perfunctory stories – put out by reporters who are clueless about what they’re writing about – that compare one airport’s fares against the “national average” – which is about as meaningful as comparing the performance of the Chicago Cubs to the Chicago Bears.

Using The Data, Not Just Parroting Them. At BGI, we help our clients see the future, not read tables of numbers from the DOT.

Here are the key metrics to monitor in this data. (The first requirement, however, is to have a professional knowledge of the data and the system that delivers it.)

• Airline Trends: It’s more than raw ASM/ASK production – it’s where it takes place, and the number of flights that are generating it. Plus, this is not a product-cohesive industry – if Spirit has a 20% increase in departure production, and United has -5% decrease, the average is not a valid metric.
• Fleet Trends: In the 2^nd quarter, the continued move toward larger units of capacity was demonstrated. For those playing the ASD home game, without any understanding the airline strategies, they miss the fundamental issues of fleet changes by airline brand. For just one example, we’ve seen both United and American start to re-plan for a world without 37-seat turboprops… this needs to be a message in regard to future air access planning.
• Airline Corporate Strategies: Understanding what airlines are announcing from the front office can help determine the value of reported data. For example, the attendees at the 21^st International Aviation Forecast Summit this year got insights on the very difference fleet planning strategies at Frontier v Spirit.
• Capacity Trends: To start with, the US air transportation system is not growing… like, not at all. The number of departures in the 1Q of 2016 was up just 1% – which is statistical noise.

 

The message is which airlines added departures – regardless of the fact that the industry as a whole added just 1%. Seats were up about 3.5%, but that’s not to accommodate more demand, but simply due to the increasing size of the average aircraft in major brand fleets. And, again, it’s who is shifting capacity that tells the story.

 

• Revenue Trends: The take-away here for airport planners is that in a shrinking airline industry, with larger average aircraft, the name of the game will be revenue-quality, and not just traffic volume. Furthermore, we’ve seen both United and American start to re-plan for a world without 37-seat turboprops… this needs to be a message in regard to future air access.

These are important factors – ones not even vaguely addressed in stock ASD “studies” and “consumer surveys” that are semi-ethically foisted on airports containing veneer gotcha questions (“will you use the local airport if we have flights to Newark?”) – without any further discussion of what that service will be.)

For aviation planning professionals, we’d recommend a review of Aviation DataMiner™ as your source of industry business intelligence. The range of reports and the flexibility of DataMiner™ delivers strategic planning – not just tables. Click here for more information & a free trial subscription.

_______________________

October 24, 2016

Touch ‘N Go – Air Access Update

Congratulations to New Orleans on recruiting British Airways flights to London, starting next March. BGI is proud to have worked with MSY in these efforts.

This international service joins Condor, which will be operating to Germany from New Orleans this summer, another project in which Boyd Group International was involved. Our advanced forecast and strategic planning expertise, such as the concept of illuminating the “road-hubbing” dynamic  that nonstop international service generates, was a core reason for these successes.

Our client Ithaca will be seeing larger American Airlines aircraft this spring, as the carrier concentrates Southern Tier service into that airport. We are honored to have worked with ITH in its strategic air service planning.

These events join our successful efforts that have led to air service access improvements in the past few months, including implementation of highly-successful AA service between DFW and Bozeman, and a SCASD grant that’s made access to AA/Phoenix possible from Santa Fe.

And as we noted last week, working with entities in Colorado Springs helped attract Frontier back into town, now with flights to Orlando, Phoenix and Las Vegas.

This is what sets Boyd Group International apart from other consultants. We are experts on airline strategies, and we have the respect of airline industry leaders.  Plus, we have better data – including the only airport traffic and trend forecasts accomplished in the private sector.

If your community is focused on results, not endless “studies,” give BGI a call to discuss your air access issues. As our clients will tell you, we will give you the facts as-is and where is.

__________

The Administration’s New “Competition” Directives

Just a little bait-and-switch…. But at least this time the switch had some value.

Last week, we all waited to hear about the carefully media-packaged directives that would be coming out from the depths of the Obama Administration to enhance airline competition for consumers.

What finally oozed out, in a shower of high-sounding, empty-suit press releases, was basically a requirement for airlines to refund bag fees when they screw up, for airlines to report on-time data for all of their branded flights, and some gobbledy-gook about making total cost of air travel transparent.

Nothing about competition, but at least it was generally positive.

As for the bag fee refunds, it should be embarrassing to the airline industry that the DOT filled this regulatory gap.  To take money in exchange for handling a passenger’s Samsonite would imply a commitment and a de facto contract to do what is expected when a bag is checked – to get it to the customer at the other end of the flight. If that fails, the airline should refund the dough.

Whether or not some airlines may have already been doing this is not the issue. The DOT saw a chance to regulate, and they jumped at it.

Data Not Understood. The biggie, however, that has the lightweight media all in a dither, is the requirement for airlines to report “on-time” performance for all of their flights, not just the ones operated under the brand-name operator’s certificate.  Because of the DOT’s 19^th century reporting system, they still think “certificated carrier” is the same as “airline.”  (So does most of the media as well as the academics that churn out “quality” reports every year.)

The media saw the term “regional airlines” in the directive and proceeded to charge off into the weeds, with lush stories about how this will reveal the sorry state of schedule performance in “regional” markets. That’s because, as we all know, that these “regional airlines” just fly to “regional” markets.

Silly Headlines…We’ve been regaled with misleading headlines, like “Airline On-Time About To Get Worse” – clearly demonstrating that knowledge of the subject matter is  not a job requirement. Since these reporters are clueless of how and where these “regional airline” assets are used, to make such as statement again cautions us to be suspect of much of the veneer stuff that gets onto the wire. The fact is that they have no idea regarding what the actual numbers might be, but they see “regional” and assume that it’s all small airports, and all substandard performance.

Point: the on-time performance of the industry won’t change. It’s just that more of it will be reported. But to read these dimbulb headlines, one would think that we’re about to see more and more delayed flights because of new disclosure requirement.

It’s another reason that much of what’s regurgitated by the media is about as reliable as the information from a third-rate used car lot. What these writers – many from big-name news sources – don’t know is that these “regional airlines” are neither regional nor airlines, and they provide lift that is used in markets such as Denver-Phoenix, Chicago-Atlanta, and Denver-DFW. Real “regional” cities.

But nonetheless, knowledge of the subject matter isn’t much of a requirement, anymore.

By the way, subscribers to Aviation DataMiner™ have always had more accurate on-time data, because we re-map the information to reflect where “regionals” are flying for majors. Unfortunately, much of the “regional airline” data doesn’t exist, because operators of 50-seat and smaller airliners up until now have not reported any such data. The academics that slush out airline reports and the see-it-and-regurgitate-it media don’t bother with this bit of information.

As for the gobbledy-gook from the DOT about full transparency of the cost of travel, the fat is in the fire for the airline industry. Regardless of any philosophical concepts about “re-regulation” it is clear that the DOT is going to do something in this area unless the industry jumps to it first. Consumers don’t always have a clear idea of the cost of a flight, and even if it’s just 1% of customers, it’s an opportunity for the feds to get involved.

And that’s usually not good for anybody.

Welcome to…

Boyd Group International is developing the premier source of forecast and trend projections regarding China-US aviation. We’ll be taking independent reviews of all aspects of the China market, and developing new analyses and forecasts

China-US Visitor Forecast 2016 – 2025, Click here

Bringing China To Your Community…

… And Your Community To China!

Communities and their airports and commercial stakeholders can join together to become centroids of Chinese visitation in the USA. We can show you how.

China-Welcome™ On-Site Seminars

These include discussions of cultural differences and cultural expectations, but we go much further. We tailor the program specifically to your community, and outline how stake holders can accommodate the expectations of Chinese visitors.

How your community can take proactive advantage in making itself more China-Welcome™ than other points.

We cover the issues of what is needed to handle movements of Chinese travelers, things such as availability of motorcoach parking, adjusting tour venues to the behavior and attributes of these consumers. Little things, such as having venue-specific souvenirs they can take back – and ones not “Made In China,” either. (Finding such items can be a lot harder than one might think!)

At the end of the seminar, the community will have a much better idea of the opportunity, and how to better prepare and be China-Welcome™

China Welcome-&-Ready™ Audits

Making the entire experience at your community and airport China-Welcome™ is a lot less complex and expensive than you might think.

Our team will visit your airport & community, and do a complete audit of:

The travel “touch points” – where Chinese visitors would expect/need guidance within their flow to and through your community.

From arrival at the airport, to transfer through the community, to venue and hotel accommodations, we can show where cost-effective communication systems can be implemented.

Key venues/attraction communication. Having basic materials – menus, travel information, emergency information, and just pure welcome documents – ready and at their easy access.

China-Welcome™ accommodation at hotels and hospitality points – the culturally-expected Chinese touches.

Chinese-Language Announcements & Way-finding – Efficient, targeted systems of PA terminal, gate, and baggage claim announcements, geared to specific needs of Chinese visitors and to the airport.

International & China Air-Connectivity Analyses

With the increasing number of new nonstop flights from more Chinese cities to the USA, developing seamless connectivity from the gateway portal airport to your airport will be essential in attracting this new travel segment.

Boyd Group International is the leader in forecasting and research of the burgeoning China-US marketplace, and we’ll prepare an analysis of the connectivity-efficiency your local airport experiences with key points in China.

This is critical for two reasons. The first is that this is an essential part of targeted marketing for Chinese consumers – understanding that they can get to your community easily and seamlessly in regard to flight connections. The second reason is that this audit will reveal where strategic and tactical activities are needed, such as working with incumbent network carriers in regard to flight connectivity, and – most importantly – working with the connecting hub airport to assure that signage and assistance is in place to guide Chinese travelers.

The final report will be a complete China-Connectivity Blueprint for your airport to move ahead of other competing communities. We would note that this program will examine and analyze all international connectivity, and include recommendations for these options as well.

Showcasing Your Community – And Your Airport – In China

Today, over 50% of all international Chinese travel is initiated on smartphones. That means China NiHao can put your community right in the pockets of Chinese consumers, with a range of modalities, from a scalable WeChat page to inclusion in systems such as Baidu, to locally-hosted and maintained websites in China.

For example, a relatively simple WeChat page for your community can deliver jus about everything the consumer needs to know about your destination. In effect, it’s like having local Chinese signage in your region, except it’s right on the visitor’s smartphone – before he or she even arrives at you airport.

The Boyd Group International team has a wide range of digital-channel modalities that will make your community a preferred destination among Chinese visitors.

Contact Us Today,
And Start Getting China-Welcome™!

Boyd Group International is now delivering programs to airports and communities in developing programs that can deliver enormous new economic impact, and developing cost-effective programs to accommodate these travelers when they arrive.

Click here to request more information, and to get your share of this new traffic demand.