More On Boeing…

Watching Global Effects At Three US Airports

The global economy, as we’ve pointed out in our Airports:USA forecast program, is a major underpinning of domestic air travel demand throughout the USA, and not just at major international gateway airports.

New On The Watch List: Three airports are now on Airports:USA forecast watch.

Seattle, Wichita and Charleston. Potential volatility.

All three are now being affected by what’s happening across conference tables (and virtual conference tables) in places like Dublin and Beijing.

In the Middle Kingdom – As we covered last week, Boeing is negotiating with the authorities in Beijing for a Get Out of Jail card that will free up delivery of around 180 737 Max orders on file for Chinese airlines. No guarantees, especially since China’s economy is flying like a lead balloon and its air transportation volume reflects it. The last thing that country’s airports need is more airliners. So, they may not be real incentivized to do any favors.

This Boeing backlog is especially challenged as more and more of the globe is recognizing that while China is a big market, it is also controlled by a government that’s falling from international favor due to things like genocide, forced labor, ghastly social services and little things like threatening to invade democratic Taiwan. International factories are starting to move out, and local ones are getting zapped by the CCP’s own Wuhan virus.

Not to mention that the real estate collapse is now threatening huge projects elsewhere in the world. The Chinese people are saddled with some real hoodlum losers running the place. In this context, Boeing is in a tough position.

On the other side of the world, now it comes out that Ryan Air has walked away from negotiations for 100 or more new Max 10 airliners, complaining that the price was increased “double digits” by Boeing.

For the folks watching the global economy home game, these two situations will have an effect on the the USA, as Boeing is a key exporter, and driver of a lot of jobs across the USA.

Three Big Centroids In The Crosshairs. The most obvious is the Seattle area, a key Boeing production region, but which due to civil events over the past year or so, isn’t on the top of any sane company’s expansion program, anyway.

The other two are Wichita and Charleston – the 787 factory at the latter location is reported down to just two airplanes a month. Wichita is the location that supplies the fuselages and other major components for the @180 737s not being delivered yet to China, not to mention the 100 or so Michael O’Leary wants to buy but won’t – at least for the foreseeable future.

Point: as Boeing goes, so does the economy of production supply regions like these three. The open forecast question is how much this situation will affect growth prospects. A lot of the damage has already been absorbed.

The open issue is whether it could go deeper. These three airports are on the Airports:USA watch list.

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FROM ALL OF US AT BOYD GROUP INTERNATIONAL, WE WISH YOU A HEALTHY AND PROSPEROUS WEEK AHEAD!

China’s Air Traffic Hits A Brick Wall…
Is The USA In Similar Danger?

Let’s cut to the bottom line.

At BGI we monitor major trends in global aviation. One of these has been the economic hoedown in China, none of which is particularly comforting.

It is not comforting, either, that so much of the American economy is affected by events in a country run by the likes of the CCP, an organization that’s effectively the demon spawn of what was dreamed up in Nazi Germany. But it is what it is.

In the last week, some interesting data was published on the native language website of the Civil Aviation Administration of China, called the CAAC. It’s not on the English version, which is the reason many other consultants and analysts are still clueless. We found some interesting data that only a couple of other sources have even noticed.

China commercial air transportation is now officially in a freefall. It’s headed down like a lawn dart at a suburban barbecue party. Take a look… domestic traffic in millions:

Between July and August, domestic passenger volume fell by over 54%.

In one month.

Air travel spend is just one bellwether within any nation’s economic health. And, yes, China is pretty much unique. Between collapsing real estate scams that make selling Florida swampland in the 1920s look like charity programs, to power blackouts across the mis-governed nation, to a resurgence in the Wuhan/CCP Covid epidemic, to the closed factories and constricted ports, the economy of China is officially heading for the full upright and locked position.

But make no mistake, this will affect the global economy as well, including the U.S. and the dynamics that underpin commercial air traffic in the USA.

Boeing: 170+ Orders With No Place To Go. As we’ve pointed out, this only puts a bigger spotlight on Boeing’s China backlog, on which a lot of U.S. jobs depend. Essentially, it’s sort of like a grocery list for a supermarket that’s just been bulldozed. Boeing was already geopolitically cut off from the Chinese market months ago. Now, with the latest self-inflicted financial quicksand coming from Beijing, the last thing China needs is more airliners, whether from Boeing, Airbus or the domestic lead-sled C919s being huckstered by Comac.

Less Goods To Sell Over The Holidays… But let’s take this home to the local U.S. airport. This financial Gong Show in China will affect the American economy. There will be less on the shelves for sale this holiday season, which means financial hit to the retail industry. That will percolate down to falling retail sales, lower earnings for the retail sector, less local taxes, and a shower of other issues.

That Dollar Is Buying Less And Less – Including Air Travel. Then we have inflation. We pointed this out in last week’s Touch & Go newsletter… a year ago, inflation was less than 1.3 percent. Today, it’s heading for 6% and up. Heck, it’s so obvious that the clown running Twitter took time out from censoring free speech to announce that we’re heading for hyper-inflation.

We Really Want To Have Better News, But… adding all of these indicators together, it’s pretty clear that the demand for air transportation cannot but be affected. That means factoring these issues into the Airports:USA® forecast. The troubling aspect is that it would appear that some of the capacity to leisure destinations added in the past year may be in the crosshairs. Any reduction in discretionary dollars due to higher prices of other goods and services will hit air travel first.

Do not underestimate this. Not being able to see grandma in person can be addressed by a virtual meeting, as is the case with a lot of business travel. But experiencing the Vegas strip or the Keys can’t be done virtually… when it’s a matter of either that or filling the tank or putting dinner on the table, the choice is pretty clear.

Clear Time This Thursday, October 28. On the next Aviation Unscripted video, we’ll be revealing the revised Airports:USA® forecasts, which will address how these clouds might rain on the air transportation parade. We’ll be projecting trends and data that will assist in anticipating what may come down in the months ahead.

In the meantime, check out the current Aviation Unscripted video… it is a good lead-in as it discusses how a BGI Runway To The Future program can put an airport in the offensive position as these expected changes start to appear in the months ahead. Click here to take a look.

Connectivity –The Real Challenge For Rural America

Let’s grab a third rail – a sacred belief – a mantra not to be questioned.

There’s a new air service structure in the USA – and it needs to be fully recognized.

Now, that statement threatens to break the rice bowl of a whole herd of consulting firms, which are working hard to “lure” airlines – heck, a duck with a chair on its back, anything – to bring “flights” to local small community airports around the country.

Here’s a hint: virtually every mode and channel of communication has changed in the past 20 years. No single one has been more transformed than air transportation.

Then toss in the economic, commercial and consumer changes seen as a result of the CCP-pandemic, and it’s more than obvious that the world is moving into a different communication structure. Air transportation has been transformed structurally by these changes.

The opportunity is in developing new approaches to working air transportation mode into the new milieu of faster and more effective communication channels.

Point: these changes actually put small and rural communities on a far more level economic-development playing field than ever before.

Heresy? Yes. But at Boyd Group International, we’re going to be doubling-down on outlining these new opportunities.

So, please log on to Aviation Unscripted this Thursday for a video that will challenge ambient assumptions about rural communication and outline new approaches that represent solutions for the future, not band-aids over past problems.

Our channel is at www.Rumble.com and can be accessed directly by clicking here.

Mark your calendar and join us this Thursday!

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Boeing – And U.S. Economy –
Getting Hit By China Economic Collapse

Sorry, we cannot get away from things happening in China.

Decisions made in Beijing will affect to varying degrees Bangor, Bozeman and Baltimore. The latest is the locked door that China has established against Boeing, which has a direct and indirect effect on businesses across the USA.

It’s amazing that the nation’s #1 single export producer has been left adrift by the people inside the Beltway.

China has not accepted or ordered a single 737 Max since 2019, when the aircraft was grounded. The rest of the world, mostly, has now approved the airliner and, although there have been some cancellations, new orders are being registered.

Except in the world’s #3 airliner market. China.

We covered this in an Aviation Unscripted video a few weeks ago. The 737 Max airliners that were grounded over two years ago by the CAAC are still parked. The more than 100 units on order are in never-never land. These were a key component of an agreement by Beijing during the Trump administration to purchase more goods from the U.S. to offset the trade balance.

Could Be That Boeing Is A Dirty Word In The Biden Clique. Recent discussions between the U.S. trade ambassador and the Chinese counterpart may as well have been an exchange of recipes instead of any hard stance on the part of the USA. If Boeing is looking for support from the Biden group, they may be disappointed. Politically, the people inside the White House may be cowering away from doing anything Boeing-related due to recent accusations against the company in regard to the Max debacle. Image, probably, even at the expense of jobs and the economy.

Even More Fun: A Chinese Travel Collapse. Aside from the geopolitical issues, there’s more bad news for Boeing’s fortunes – economic chaos in China.

Today, China needs more airliners like Egypt needs locusts. Air travel volume has plunged 24% in the past quarter. While the hoodlums in Beijing are planning an invasion of democratic Taiwan, the mainland Chinese economy is coming rapidly down.

Boeing and the suppliers on which it depends need to go back to the forecast drawing boards. The company recently forecast a need for 8,600 airliners in China over the next 20 years, with reliance on a rapid recovery from the CCP’s Covid pandemic.

Given the collapse of the housing Ponzi-bubble – which is gaining momentum – plus the inability of China to produce sufficient power to its factories (due to bad infrastructure, not “new demand”) it is very hard to understand Boeing’s long-term logic. And as for a rapid recovery from the CCP-Covid mess, today China appears to be going in the opposite direction. Big time.

The bottom line is that Boeing – and the suppliers that depend on that company – need to clearly tumble to the fact that the China market is closed to them. The U.S. will continue buying massive stuff from that country, but the criminals running the government can pick and choose import winners with impunity.

The American economy is the loser.

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And, In Regard To China & Airliners

This week’s Aviation Uncensored video addresses the issue of whether Chinese airliners can threaten Boeing and Airbus.

Actually, what the Chinese government is producing is an embarrassment to China… the C919, the CR929 and the ARJ-21 are nothing more than attempts to be just like existing airliners from the West.

Actually, they are a lot less in all regards.  There is no way these sleds are a threat to anybody except the Chinese economy itself.  When/if the China economy rebounds, reliance on these platforms will keep the Chinese air transportation industry years behind the rest of the world.

Log on here, or go to the home page to take a look.

DOT United Fine –
A Wake-Up Call For The Airline Industry

The lines are drawn, at least at the DOT.

It would be best that the U.S. airline industry fully get the message… they’re an easy target for politicians to use to appear as consumer commandos, coming to the aid of abused and beleaguered passengers across the nation.

It’s started. Airlines need to re-think all of their customer service “rules” to eliminate consumer confusion, and any even vague image of making passengers tow the line. Get real, they are there, and get real, the new DOT is fixin’ to make a media circus, wherever they can.

Find Something – Anything – And Do The Press Release. The DOT has fined United Airlines almost two million dollars for violating the sacred “tarmac rule” – digging back as far as five years to find 25 incidents where the airline supposedly trapped passengers against their will inside airplane cabins for more than three hours.

Now, the DOT will not make clear that the majority of these ghastly attacks on humankind were the unavoidable results of weather – such as when a snowstorm caused safety diversions from Chicago to alternative airports such as Madison.

In such cases, the DOT still will tell the great unwashed consumers that in such cases the airline must – must – allow passengers off flights if the delay is over 3 hours and provide snacks at some point in the delay.

Reality and any basic knowledge of airline safety need not apply. That would interfere with a great opportunity for political grandstanding.

Write The Story, But Don’t Question The DOT. Not one media story on this – not one – bothered to outline that in such cases, it is safety that takes priority, and when 20 airplanes or more have no alternative but to descend on a secondary airport when a major hubsite like ORD gets weathered in, it can be impossible to get passengers off planes safely in the three-hour period.

There often aren’t gates to deplane passengers, which could be literally several hundred passengers or more.

There isn’t ground equipment to bus folks off the flights. There aren’t terminal facilities to accommodate the throngs of diverted passengers. Sometimes, there are sterile area and security issues, and no TSA on duty. The concession services at diversion airports are not in existence to provide DOT-mandated “snacks.” In some cases, the airline might not even have customer service employees at the airport involved.

These are not screw-ups. They are part of the realities of air transportation. The bottom line is that due to the intrinsic nature of airline service, these incidents will occur. They are not, as the DOT and a lot of media lightweights will represent, avoidable in all cases.

Grandstand First. Facts, Later – Or Not At All. The political appointees at the top of the DOT don’t care… they’re all about making sure they’re playing the willing media to prove they’re not going to let airlines abuse passengers. Even when they have to concoct things.

Message To Airlines: Shift Your Posture.  Now, to be clear, there have been incidents where airline performance in the event of diversions has been truly shameful. That is not the norm. But this United fine signals a situation where the U.S. airline industry had better re-think all of their rules and policies concerning customer service.

It’s going to be open season on airlines in the next three years, and carriers need now to look at all of their sacred rules from the perspective of how the consumer might see them, and how they are administered and enforced. Too often, the “rules” are imparted as if directly from Gestapo headquarters. Or from far-away call centers in Asia where the person at the other end of the line couldn’t give a yak meat snack if the customer is satisfied or not.

Let’s not dance around the situation – a lot of airline policies appear or can be construed to appear to be consistent with what one would find at a minimum-security prison and enforced just as gently.

This means there is a need for a complete re-thinking of every consumer policy and a re-imaging of each. It is indeed necessary to have rules that consumers must follow when traveling. But it’s how they are administered, postured and enforced that makes the difference.

With the politicians on the warpath at the DOT, the airline industry had better think about circling the rules wagons to appear more consumer friendly. A couple of points…

Refunds. It can appear that the airline industry considers a booking to be a contractual obligation on the part of the consumer to travel. So, if there are reasons that the airline can’t operate consistent with the initial booking, the consumer is allowed to re-book within a tight set of requirements to fly another day. But in any case, the message is that you have to go, or forfeit your fare. Regardless of protestations to the contrary, that’s the message airlines send to their consumers in the event of major off-schedule situations. It comes across very arrogant and take-it-or-leave-it. Congress and the DOT could have a field day with this one.

Great. But consumers don’t book flights to take an airplane ride. They book to be somewhere on a certain or near certain time frame. Generously telling the customers they have three days to re-book (under a set of rules that can look like the start-up procedure for the space shuttle) does nothing when the airline’s inability to meet the initial booking means the consumer misses the funeral, the wedding, the business meeting, whatever.

Ancillary Fees. With the politicians on the warpath at the DOT, it is beyond belief that any airline would even think about not refunding baggage fees when they fail to deliver the bag with the passenger. It’s even more surprising when one considers how rare such a situation is today. But that’s what the DOT seems to think. Same with internet fees.

“Choice” Or “Prime” Economy Seat Fees. Another emerging cause celebre among the headline seekers in the Marble Playpen (Congress) is airlines that charge extra for specific seats in economy. All these life forms see is that there are situations where for a family to sit together, the airline will gouge them more for a “choice” seat if others are not available together. That “choiceness” might just be described as being closer to the door on arrival. But it’s a “fee” that may look great on the bottom line but for congress is like waving a pot roast at a hungry lion.

Change Fees. It’s likely Southwest is fervently praying that the rest of the industry doesn’t permanently stop charging ticket change fees once this CCP-Covid pandemic is over. That’s because it is likely that WN is getting enormous new revenue from passengers choosing them simply because they know they won’t have to call Zurich for a wire transfer should the need arise to change a reservation.

Please, major carriers, don’t even think about appearing at a congressional hearing and slobber out a lot of financial backroom gobbledy-gook that it really does cost the airline $200 when a passenger changes a booking. It won’t fly and makes airlines look like pirates.

Staffing. This is the biggie. It is a fact that an electronic check-in kiosk is never rude. Never in a bad mood. Never goes on break. Never calls the Teamsters for an organization ballot. Never calls in sick. Live employees are expensive and, in today’s world, are a lot less necessary to passenger processing.

Until the flight cancels.

Or worse, until the destination airport shuts down. Or the entire airport is hit with a blizzard, or just a major thunderstorm. I.e., things that do happen in the airline business.

This is when access to a human is essential. Yup, the wondrous rebooking system takes care of a lot of it, but there are still enough passengers with questions or concerns to make the airport look like a re-enactment of the Fall of Saigon when there is almost nobody to speak with. So call the airline, right?

In the last six months, there have been incidents where the wait time on the telephone can be several hours… hours. And finally at the other end is a contract agent in some remote country who could not care if you flew the airline or took Greyhound.

This is a challenge that events in the past three months have illuminated, big time. There is no easy solution, except training in interpersonal interaction under stress, the ability for front line staff to adjust rules, and refocus on assuring that channels of information are widened in such events. Easy to say, hard to implement… but recent events would indicate service shortfalls that the DOT will leap on.

Final Point: This is not a drill… airlines can either now take this aggressively in hand and make major changes in areas such as noted above, or they will be imposed by an unqualified set of political appointees at the DOT.

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Aviation Unscripted – A Review of 9/11 20-Year Coverage

This week’s Aviation Unscripted video looks beyond the events on that day, and the actions America took in reaction both then and since.

Amid all of the articles lauding how different and how much more secure our airports are, came a story from KCBS in Los Angeles. It noted an unauthorized incursion to the sterile AOA at LAX, and then found that there’s been such breaches at an average of almost one per month over the last six years.

Somehow, this was deemed to be great security by the head of the LAX police, who claimed that compared to the millions of people through the airport, that’s proof of great security. We covered this in last week’s Touch & Go newsletter for our clients.  (If you’d like to be added to the distribution, just send us an email.)

Terrorists Are Still In Control. In the video, we illuminate that right from the start, it has been a political process at the Department of Homeland Security and at the TSA. The first head of DHS was a state governor with absolutely no expertise in countering terrorism, let alone implementing programs to make America safer. Bush could have nominated a top orthodontist just as effectively, and given the results, maybe more so.

Now that the anniversary has past, it’s back to forgetting what happened on 9/11. The articles ranged from personal recollections to the usual babble about how well the TSA is doing. Some was disgusting political slop such as done by NPR, which made it all political, without pointing to the politicians responsible. But NPR is “free” – and worth every penny.

In any case, if you have not seen it yet, click here for the Aviation Unscripted video.

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Change of Insight Direction…
“Fall” May Be Not Just In The Air…

… But At The Nation’s Airports, Too – More Danger Signs

Boyd Group International is now forecasting that the combination of inflation, CCP-Covid, and now a potential global economic downturn due to a collapsing China economy could combine into a significant decline in air transportation demand in the late fourth quarter and into the first half of 2022.

It’s not arrived yet, but it is on the radar screen.

The good news is that the airline industry clearly has control of the capacity lever, and we are seeing some clear indications of pullbacks emerging for the next 4 months.

Let’s look at the three main threats to air traffic recovery.

The Potential Big One – A China Collapse

Yes, a collapse of large parts of the Chinese economy will ultimately affect air travel demand in the USA… by causing lots of corollary damage to the USA economy.

This is one that is being completely missed, even though the stock market just got gob smacked by it last week and is still being affected.

To start, the air transportation business isn’t like ‘Vegas. What happens in Beijing doesn’t stay in Beijing and can affect Bangor and Boise and Billings. As demonstrated by the stock market, it’s already happening.

One of the advantages we have at Boyd Group International is that we understand that air travel demand in the USA is affected by a range of global economic factors. Another advantage is that BGI is the only aviation consulting firm that has an active China research practice. What we see today is that the creaky house of cards called the Chinese economy is potentially on the verge of coming down like a baby grand out the 8^th floor window.

Most folks have never heard of Evergrande. But it’s a large real estate developer that’s bazillions of billions in debt and about to sleep with the fishes. (A big part of the Chinese economy is largely based on Ponzi scheme real estate programs that are essentially “buy & flip” schemes. It’s been propped up by corrupt local officials and by the CCP itself, but that’s about to change.)

A collapse or near-collapse of Evergrande could start an avalanche of business failures across China and the globe, not to mention civic chaos in China that could engender more Tiananmen Square events. Don’t laugh – it’s already affected values on Wall Street. Main street could be next.

When this house of corrupt cards comes down, in addition to the usual fallout in other world markets and in multi-national companies that have invested in China, it could also accelerate a major decline in China’s factory output. That means there may be lots of things that won’t be on store shelves this holiday season. Read: lower retail sales in the USA. When the coffee makers and hair dryers and toys don’t arrive, they can’t be sold.

Now, morally, consumers should not be buying anything made in China, because these companies all benefit the Chinese Communist Party, and every purchase ultimately supports this unelected thug regime that would make Adolf Hitler look like a perfect prom date. But in many cases, there are no alternatives.

So when that production line in Guangzhou making blenders, or generators, or barbecue grills – or major components for Boeing airliners – shuts down, it does not take an MBA degree from Wharton to figure out the economic impact on the U.S. economy… and how that can affect propensity to travel on airplanes.

Yup, this sounds like a far-out prediction. But stand by, it’s not.

Inflation

Basic Econ 101 will tell us that when overall prices go up, spend patterns change.

Kroger has advised that consumers should be prepared for material increases in food costs in the near future. Gasoline is going up, and based on current energy policies from Washington, will continue that trajectory. This means that all three air travel sectors – leisure, personal and business – will have less in the kitty. And let’s cut the political pablum – what’s going on and what’s planned in Washington is going to put inflation on the fast track.

Now, the enplanement effects of inflation won’t be evenly spread across the board. Some U.S. airports will still see strong traffic growth due to economic and demographic migrations,  while others – paradoxically those in large commercial metros that depend on both leisure and business travel – will likely see substantial reductions in air travel demand. For them, it’s a double-whammy: inbound leisure travel will drop, and business-generated demand, both in and out, will begin to decline.

Our Airports:USA® system has identified a number of airports that need to start considering how to deal with the potential of major traffic declines.

CCP-Covid

Never has the U.S. seen any crisis so expertly and intentionally confused by any number of political persuasions. Masks are essential, some say, with no explanation of what they do or why. It’s a hoot seeing diligent, obedient, and with-the-program citizens alone in their automobiles, sporting a mask, apparently protecting the car’s cruise control knobs from contracting a deadly infection.

We have no guidance on what a “mask” really consists of.

Vaccine passports are a hot item. The borders with Canada and Mexico are tightly CCP-Covid restricted – except for thousands of unscreened illegal aliens pouring in and being literally distributed to cities across the country by the Biden folks. Yessir, they’re on it.

Point: nobody can take the people in Washington seriously in regard to CCP-Covid, and that means travel uncertainty.  Travel uncertainty keeps people from booking flights – or, worse, cancelling ones already made.

Declining Economic Growth Plus Inflation: Air Travel Demand Quicksand.

We can’t ignore this. It’s like an oncoming hurricane. We can hope that its track will change, but it’s not good judgement to ignore it.

At Airports:USA® we’ll be keeping our clients updated on where these dynamics are headed. For more information on the only independent enplanement forecasts accomplished entirely in the private sector, click here – and then join us as subscriber members.

Planning for the future means clearly understanding that past metrics and thinking are great ways of staying there – stuck in the past.

The Monday Insight is observing the U.S. Labor Day holiday,
and will return next week.

Be Sure To Join Us… here’s what we’re looking at:

Boeing: We’ll be reviewing the situation at Boeing and how it may affect the U.S. economy… the nation’s single largest manufacturing exporter appears to be cut out of China for single-aisle airliners, has just lost a potential huge order (pro-tem?) for 737MAX-10s from Ryan Air, and now reports upwards of $25 billion tied up in @ 100 parked & undelivered 787s due to concerns of quality control issues that are being investigated. What this may mean to the U.S. airline industry will be explored.

China & Taiwan & Louisville: Now that China believes it has a clear picture of the quality of the folks directing the U.S. military, due to the Afghanistan debacle, there are increased incursions into the Taiwan air defense zone. Toss in major political and economic challenges for the president of China, which may encourage a big political stunt, and the combination may result in the criminal leadership of China attempting a quick invasion of Taiwan.

If that happens, plan on a major economic plunge and a resulting decimation of air traffic demand. We’ll explain how a CCP landing Kaohsiung would almost immediately affect the traffic at Knoxville, and how U.S. regions with strong China-owned commercial operations may be in for some unexpected economic turbulence.

The Latest Airports:USA 4Q Traffic Projections. Mixed signals. Hawaii has essentially put out a “Do Not Enter” sign just at the time when it is hugely situated in regard to new consumer spend projections. Points in the E.U. are seeing an uptick in the CCP-Covid spread, while Denmark has reportedly dropped all CCP-Covid restrictions. And, of course there is the CCP in China which has declared they have the disease under complete control, with no new infections late last week… out of over a billion people. All of this will affect air service demand internationally and in the USA. We’ll deliver some details.

Follow-up 9/11: Where The Nation’s Security Really Stands. How the 20th anniversary of 9/11 is covered in the media, particularly in regard to how AVSEC has been handled in the last two decades, will give some strong indication of how aware the nation really is in regard to terrorist threats.

Already, the administration is playing political games, claiming that the real danger is from “domestic” terrorists, with zero real data to back it up.

That is completely consistent with the incompetence in allowing the recent influx of over 100,000 largely unvetted and unidentified people from a terror-generating Afghanistan.

So far, it is not encouraging… there have been lots of veneer media pap stories on “how 9/11 has changed how we travel” – but almost none independently investigating what’s actually been done in regard to national security, not just AVSEC, since then.

To read this sunshine, we have no real threats… our Department of Homeland Security is on the case.

If you haven’t done so, click here or on the icon for the latest Aviation Unscripted video. Some straight talk that addresses facts, not trendy group think.

Log on next week, and we’ll see you then!

Fallout From Afghanistan Could Hit Our Airports
For Real

“Several Thousands.”

That was the indication from the people in Washington regarding the number of prisoners who have been apparently released by the Taliban from confinement at the abandoned U.S. Bagram air base.

The administration didn’t have any idea of the exact number. Not too comforting since originally it was our prison.

These are not street hoods doing time for boosting a liquor store. These are dedicated killers. Dedicated terrorists… as are the rest of the animals now apparently in charge in Afghanistan. And they are now back in circulation under a regime that actually has cautioned citizens that its savage neanderthal members are not trained to deal with women, so, ladies, please stay home.

Add to this the disturbing indications that many or even most of the tens of thousands of Afghans being airlifted to the U.S. have not been fully vetted. Not just for CCP-Covid, but for any traces of being involved with the Taliban itself.

There Is No Plan – None. If this is the official competence of the security program for evacuating Afghanistan, a place rife with terrorists, give some thought regarding just how competent the security at our domestic airports might be.

The open question is whether the combination of the Taliban back in charge in Kabul, plus thousands of unvetted people from Afghanistan being funneled into the U.S., and also materially open borders in the south, could combine into increased threats of terrorism on our air transportation system.

Draw your own conclusions.

Identification. Anticipation, Contingency Planning. Event Mitigation. These are commonsense foundations of aggressive security awareness. Are they in place across the nation’s infrastructure?

Based on the responses to the last major terrorist attack – the Colonial Pipeline event – the indications are clear that Homeland Security is clueless to the four basics above. Talk about identification… these political appointees didn’t even think that a terrorist event which partially shut down fuel distribution to the East Coast was a “security incident.” No explosions. No violence. So, it wasn’t any big deal.

For the record, the current occupants of the White House even indicated that the pipeline event and the chaos it caused were positive – it would support the administration’s plan to encourage people to buy battery-powered cars.

Yup. Real security awareness.

What To Expect… More Layers of Hype. The increased threat is not vapor, but we can likely plan on the responses from the TSA to be pretty much that. Security won’t be enhanced, but high-visual stunts will be the order of the day…

Elimination of Pre-Check. This will be a platform for the TSA to show they are tightening screening. Yessir, having more people take off their shoes will more than make up for not having clue about what innovative new approaches terrorists might take to attacking our airports.

More Random Passenger Checks. Look for a return of having randomly chosen passengers nailed for additional screening at boarding gates. The operative word is “random” – as far as enhancing security, it’s the equivalent of just shooting blindly into the woods and calling it deer hunting.

Scrutiny of Passengers on One-Way Itineraries. The post-9/11 assumption that a terrorist intent on a suicide bombing would certainly be cost-conscious enough not to buy a return ticket. This part of the Kabuki security theater may return.

Log On This Thursday To Aviation Unscripted… Some Accurate And Disturbing Facts. The next Aviation Unscripted video is planned to review where the USA has come since 9/11 and give a candid picture of what we can expect as the political appointees at the top of DHS and TSA try to figure out what to do next.

We’ve had 20 years since 9/11.

Judging by the response to Colonial Pipeline and the fiasco in Afghanistan, there is the legitimate question that it’s been wasted.

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And, Keeping Up With Traffic Demand Trends…

If you haven’t done so yet, log on to This Week’s Aviation Unscripted Video to get some new insight regarding what we can expect in the next four months in regard to enplanements across the nation.

We discuss the impending effects of continuing inflation on the three main air traffic segments – business, personal and leisure. Consumer price increases are in full swing, making air travel dollars more scarce. One factor giving us a temporary break is that due to globe issues, jet-A has not yet seen major spikes.

We grab the CCP-Covid third rail – the increasing confusion regarding the delta strain of the CCP’s gift to the world, as well as the issue of masks and social restrictions is starting to affect future bookings.

We look at  the latest Airports:USA® projection of the coming changes in the role of the nation’s 24 airline connecting hubsites – which are expected to grow, and which are expected to see flat or even declining traffic through 2025.

Invest the 14 minutes to join us at Aviation Unscripted – It’s insight and perspectives not found anywhere else.  Go there now.

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BEST REGARDS FOR A PROSPEROUS AND EXCITING WEEK AHEAD!

Latest Aviation Unscripted Video:
More Evidence of Traffic Slowdown

“…  the company believes the recent negative effects of the pandemic on August and September revenue trends will make it difficult for the company to be profitable in third-quarter 2021.”

… Southwest Airlines

That’s the word from one major airline. There are other indications as well. The good news is that the U.S. airline industry is not being suddenly blind-sided by the factors threatening current load factors. They are obviously not lulled into a cushy euphoria due to the growth in traffic this summer.

In the latest Aviation Unscripted video, we go into how this may change.  It’s insight about the next six months that hasn’t been addressed. Yet.

Click here to get a view of what we may be facing, including a review the latest Airports:USA® short-term enplanement forecasts and how regional demand shifts are already taking place.

BGI is the only aviation consulting and research firm that has identified the economic drivers we can expect in this 3Q-4Q traffic demand shift.

We don’t go by the “consensus,” which is always months behind and a system that smothers independent thought. What we cover in this video is what other consultants will be trumpeting only after it’s already obvious. Click on the icon above and join us.

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Random Aviation Points This Week

Boeing 737MAX – Maybe Getting Resuscitated In China…
… And Maybe Not. It’s Important To Renton Economy.

We pointed out a couple weeks ago that it was starting to be clear that Boeing was being shut out of China, at least in the single-aisle market.

In the last week, two indicators of interest. Boeing is reported to have flown a test plane 737-MAX7 to its (probably very quiet) completion facility in Zhoushan. In addition, China Eastern shifted a single 737MAX8 it has on the order books to one of its subsidiary airlines earlier in the week. No indication of what that might mean.

The fly in the fleet ointment is that the Chinese air transportation system right now doesn’t need the dozens of now-parked 737MAX units, not to mention the ones still on order, as the CCP-generated Covid virus has been shutting down whole airports and constricting travel across the country. So a quick return to accepting new 737s may not be in the near term.

Airbus Is In The Cockpit Seat. Meanwhile deliveries of new Airbus narrowbodies continue. The indications are that China may be on the margins of Boeing demand for the foreseeable future.

This does have future economic indications for the USA and for Renton. Reportedly, a quarter of Boeing’s production was at one point aimed at China.

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Air Travel – It’s Just Like A Loaf of Bread, The Survey Says

A recent article in the Columbus Dispatch trumpeted a new survey that identified Rickenbacker as having some of the lowest airfares in the nation. Didn’t do much to check the source or the accuracy… the headline was apparently too exciting, even if at used-car-lot levels of inaccuracy.

Memo: Air Transportation Is A Modality, Not a Product. Some “research firm” got into DOT data, and ranked airports by average fares, assuming that air service at places like Rickenbacker or St. Louis or LGA or Phoenix Mesa was a consistent product, like a gallon of unleaded or a watermelon, or a bunch of seedless grapes. They also assumed that the reporting of “air fares” is derived from a consistent methodology across all airlines. Caveat Reader.

Actually, this is just like the news stories that come out every quarter, with eager reporters comparing “ticket prices” between airports. Or the nonsensical discussions in air service development “studies” claiming an airport may have “higher than average” air fares, which even the DOT thinks is a metric.

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This Week’s Airports:USA® Forecast Snapshot

We’ll be posting a key metric on Airports:USA®  each week that gives insight regarding air transportation and airport trends.

This week, we take a look at the 25 Fastest Growth Large Non-Hubsite Airports through 2025.

This is another area where Airports:USA® is far more advanced than traditional FAA forecast methodologies. The Agency still ranks airports on the percentage of total enplanements. That was great in the 1960s, but today the role an airport plays in the air transportation system is a far more meaningful category metric.

Airport Classifications That Relate To Reality. Tor the FAA to continue to categorize airports as variants of a “hub” is completely outside of air transportation system realities. Airports:USA® categorizes airports at regional, large non-hubsite, and hubsite. The latter category represents airports where 25% of the total enplanements are generated by connecting passengers as a result of an airline or airlines intentionally scheduling flights to inter-connect.

Large Non-Hubsite Airports are those that experience more than 4 million enplanements annually and where no airline has established a connecting hub operation. Just click on the snapshot tab.

Click here to take a look. Just click on the snapshot tab on the website.

Enplanement Projections Reduced by 30 Million:

Airports:USA® Now Reflects Growing Travel Uncertainty

Even If Contained Here, The CCP-Virus Elsewhere May Hit The US Economy

Yikes.

It would be really great if we could point to some exciting, across-the-board indications for the rest of 2021. But as a research and forecasting firm, BGI simply tells it as it is.

It just means identifying emerging trends and planning accordingly. Right now, the overall picture is very mixed and the national air traffic demand fundamentals are not encouraging at the  moment.

Okay… today’s quiz.

What do Stevie Nicks, Lynyrd Skynrd, Foo Fighters – and, of course, the annual North Carolina Food Truck Rodeo (?) – have to do with air traffic forecast methodology?

A whole lot – particularly when we are being bombarded by me-too media stories trumpeting the “comeback” in air travel. See, these are just some of the entities across the country that have cancelled or postponed events due to fears of the CCP-Covid pandemic. They are one clear set of harbingers for the near future of enplanements across the USA.

‘Course, all the disappointed loyal followers of the Foo Fighters wouldn’t fill the rest room capacity at a mid-size airport. But it’s now clear that a lot of the country is starting to consider closing down again, due to the uncertainty, contradictory reporting, and outright political game-playing regarding the CCP-Covid pandemic.

Shaving 30 Million Forecast Enplanements. Looking at the latest data from Airports:USA®, the prediction is for a tailing off on air transportation demand in the 4Q, tallying @642 million enplanements, down from an earlier estimate of over 670 million.

Does Anybody Have A CCP-Covid Clue? Hearing what’s in various media sources is certain to keep consumers totally befuddled in regard to what is happening around the country, as well as what this round of infections actually represent. That breeds uncertainty and confusion, which keeps people home.

Unfortunately, the fourth quarter is now in line to see the effects of this…

… On one hand, we have data from Johns Hopkins indicating that the fatality rate has reached a new low. On the other hand, we have the occupant of the White House reportedly researching whether he has the legal authority to force everybody to wear masks, or more correctly, to simply cover nose and mouth with just about anything, in a show of subservience to the Regime. Or, maybe two masks at the same time, which was indicated as his preference in the past.

Then we have other news. Some carriers in the E.U. are considering requiring passengers to use professional-grade medical masks, instead of the hokey talisman stuff that is just there to cover-your-face-to-show-loyalty, as is demanded by the CDC.

Spreading Again Where It Started – And Threatening The US Economy. More troubling news, mostly ignored, swept under the rug, or just missed, is that China is now in a full-blown pandemic eruption. That can affect the American economy, and hence, the dollars available for air travel.

Anybody remember the lifeforms in the media that dishonestly spread the fiction last year of how quickly the unelected regime in China moved to stop the spread of the Covid disease when it initially broke out in Wuhan?  Well, today, the pandemic is spreading across the Middle Kingdom, replete with lower-level CCP hacks getting tossed under the political bus, blamed for not doing enough. It is not “regional” – it is all over China.

That’s probably considered as a big “so what” to most people – it’s an event thousands of miles away.

But it’s also an indication that the CCP-virus is spreading wildly and possibly out of control across the factories where our hardware stores get a lot of the tools they sell. Where many of the appliances sold in department stores are made. Where a lot of the furniture we’re sitting on is made. Where a big percentage of anything that requires a double-A battery is made. Where a huge part of our supply chain is now vulnerable to being threatened.

Go to any store and take a look.. if the flow of goods gets constricted from China due to massive spread of the pandemic, a lot of the shelves will be devoid of product, with devastating effects on business. It is a terrible indictment that much of our supply chains are tied to a country where everything produced benefits a criminal government, but right now many companies in the USA have not moved aggressively – at least on a moral basis – to shift away from dependence on this system.

Think that’s a stretch? It is.  But air cargo capacity is already being cut between the US and China as a result of the spread of the disease. That cuts volume and can raise prices. Next may come ocean traffic.

Stretch or not, this is still a nasty possibility that will affect the US economy, and demand for air travel. Keep an eye on this.

Danger Signs. Back home, the storm clouds are already forming. We have already had two airlines indicate that bookings after Labor Day are softening. There will likely be more. It is noted that one carrier system has dropped service or plans for service at three smaller airports. Plus, it is likely that some pandemic-induced O&D leisure routes could be on the chopping block shortly.

Higher Grocery Costs, Higher Prices At The Pump. Commodities Going Up. Then there is the inflation dragon coming out of its cave. Based on the spending and other largess planned by the inhabitants of the Marble Playpen in Washington, one has to be very much in mental left field or vacationing on Pluto to assume that this is just temporary. This means that there will be less money available for both leisure and business travel than we otherwise expected two months ago.

Log On To Airports:USA® for the latest forecast snapshot updates, more of which will be added this week. While there, check out our exclusive Quarterly Outlook product, which delivers the future for airport planning.

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Aviation Unscripted Video This Week

Stand by… with the 20^th year since 9/11, we are going to be hitting hard on the fact that the nation’s air transportation system is no more secure than before that horrid event. Log on to our channel on Thursday.

Matter of fact, if you haven’t done so in the past, log on now and take a look at our library.

Great Input. We want to thank the folks commenting on our video last week of the Cuba air service situation. We would note that Boyd Group International is the only aviation/airport consulting firm that tackled the nonsense that surrounded the “opening” of Cuba-US air service in 2014-2015.

Plus, we’ve had more feedback on our earlier Unscripted Video regarding the fallacies and dangers of a headlong dive into battery power as an environmental solution.

It is a potential disaster, unless there are major changes in battery manufacturing technology and the development of safe ways of handling the waste represented by used-up lithium-ion batteries.

Click here to go to the Aviation Unscripted channel on Rumble.com… which is just one of the portals for visitors to Unscripted. Peruse our past insights, and let us know your thoughts.

We’re celebrating our one-year anniversary this month, and looking forward to a fun year ahead.

Cuba – U.S. Air Traffic

Revisiting The Mirage

In Boyd Group International’s 2009-2015 air service demand studies on Cuba, it was determined that Cuba was likely the biggest single new revenue potential facing American carriers. Figure maybe over one million visitors from the USA. But the operative word is “potential” – it’s not here yet.

Not by a long shot.

Message To U.S. Travel Industry: Freedom Demonstrations Aren’t Tourist Draws. Last month, thousands of citizens across Cuba took to the streets to rally for a couple of things that most people in a free country take for granted.

Little things like freedom of speech, the liberty to run their lives outside the control of a Communist government cleptocracy, and be outside the watchful eye of a Stasi-styled secret police. Plus, maybe not get zapped from time to time with things like caloric-rationing and shortages of basic food stuffs.

Enter The Air Service Mirage. Let’s go back to 2014, when the Obama Administration boldly decided to change U.S. policy and embrace the people running the Communist Cuban Government.

The president of the United States flew to Havana and had a whole spasm of photo ops, schmoozing up to the dictator of Cuba and his various Capos. After more than half a century, the U.S. had seen the error if its ways, and would seek to be friends with the Castro government.  Yessir, after one million Cubans escaped to the USA, and thousands more wanted out, it was time for the Obama administration to set things straight.

In all that hoopla, it was announced that for the first time since 1961, air service would be re-established between the two countries.

The raw enthusiasm for air travel demand between the USA and Cuba swept the travel industry like 1960s teenagers anticipating the arrival of the Beatles. We heard all about the “pent up demand” for Cuba travel (?) … and the Obama administration was fixin’ to open those floodgates. Hundreds of thousands of new passengers would be crowding through airline hubsites, hankering to connect get to Havana, Matanzas, Santiago and other places.

Back then, any Luddite suggestion that this may have been cheerleading for a team not yet on the field was strictly ignored. Like, the fact that Cubans by and large didn’t have sufficient incomes to pay for baggage fees, let alone a vacation to see Disneyland. Or if they did, even being allowed to leave the workers’ paradise.

How ‘bout hotels for the Normandy-like invasion of expected U.S. visitors. Or rental cars? Or “resorts” that could even begin to compete with other Caribbean venues? It was clear as a blemish on prom night that the vast majority of the revenues would be U.S.-generated. One-sided traffic generation.

That troubling bit of O&D reality was buttressed by the fact that it would be only U.S. carriers in this game. Any arriving Cuban flight would be greeted by attorneys even before the lav truck could arrive, attaching the airliner due to standing lawsuits against the Castro regime. So much for two-way travel.

The point is that the boom never happened, mainly because there is no business or leisure base in Cuba. (And, for folks still wallowing in political myopia, Cuba’s mess is not due to the U.S. embargo. Cuba has no prohibitions on freely buying anything from the rest of the world.)

The travel groupies missed the fact that the infrastructure and resorts in Cuba couldn’t match the competition in the rest of the Caribbean. The panting politicians expecting huge business and commercial trade with Cuba never bothered to really get informed before issuing drippy-drooly congratulatory press releases about the brilliance of the move to play up to a Communist dictatorship. There is no business base in Cuba, because it’s all government-run.

The Future – A Bonanza Is Still Possible – Likely, Actually. In 2019, the Trump Administration effectively restricted scheduleD flights to only Havana. Airlines that had won rights to other Cuban cities should have sent thank-you notes, as most of the routes turned out to be dogs… due to lack of traffic, high costs (many “off invoice”), or both. Now, they can wait until things change in Havana.

The street demonstrations in early July are a strong indicator that this may be in the cards.

Boyd Group International has covered this in more detail in the latest Aviation Unscripted video, which can be accessed on Rumble by clicking here.

BUT DO BE PREPARED – THE UNSCRIPTED VIDEO GOES INTO AREAS THAT THE MEDIA HAVE NOT TOUCHED… INCLUDING VERY DISTURBING PICTURES OF THE US PRESIDENT’S 2014 VISIT TO HAVANA… VERY DISTURBING, especially in light of recent events in Cuba. Click on and take a couple minutes for perspectives that are left out of most narratives covering 2014.

And our 2015 study is still (unfortunately) an accurate depiction of the Cuba travel picture. Copies can be ordered through the contact button on this site.
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WE WANT TO WISH ALL OF OUR CLIENTS AND FRIENDS A HEALTHY AND PROSPEROUS WEEK AHEAD!