Before We Start This Week… 

We’re all excited to celebrate the 35th anniversary of Boyd Group International!

This marks three and one half decades since we founded what is today Boyd Group International.

First located in a modest office in a small town in the mountains west of Denver, our goal was to provide a higher level of aviation consulting – one based foremost on futurist industry expertise, independent forecasting, and clear thought-leadership – one that would constantly challenge ambient aviation thinking.

Back in 1984, that was completely opposite of “traditional” aviation consulting, which was typically aimed at first getting the project, and then billing hours learning about the subject matter, and eventually giving the client a report – and an invoice.

We were different, by design. We believed that consultants should be independent subject-matter experts in the future of aviation right out of the box, not just high-level temps.

Not surprisingly, back then a lot of those incumbent consultants considered us to be just iconoclast trouble-makers.

They were right.

Maybe that’s the reason most of them aren’t in business, anymore.

Questioning Norms. Barbecuing Sacred Cows. Today, we assist clients around the globe, from our own headquarters building in Evergreen, Colorado, not too far from our first small office.

From the first independent study of code-sharing, completed in 1986, to the first independent review of the concept of the “regional” jet, to testifying to Congress on matters such as ATC and airline competition, to today, with extensive in-house expertise on global subjects such as new-technology airliners, airline alliances and emerging economic trends, we set our company apart from other consultants, drawing clients from all areas of the industry. We are forecast leaders.

Airports:USA is the only enplanement forecasts accomplished entirely in the private sector. Our Global Fleet Trend & Demand Forecasts have been relied upon by both aircraft manufacturers and suppliers.

Today, our Airports:China program is the only outside forecast of the 200 largest airports in the world’s second-largest economy, as well as insights regarding future trends in China-US air service.

Plus, the International Aviation Forecast Summit is now the leading event of its kind, globally. Actually, it’s the only event of its kind. In 2020, the IAFS celebrates its 25th year… so plan on some really exciting additions.

We’ve come a long way in the last 35 years. And we’re not done, by a long shot.

We want to thank all of our current and past clients for validating our approach to futurist aviation consulting, We don’t stand still – if it involves aviation trends, Boyd Group International will be front and center in the forum of data, perspectives and discussion.

After 35 years, we’re still into the future. And so are our clients.

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Cuba Air Service Restrictions –
A Sigh of Relief from U.S. Carriers?

The US has now restricted scheduled flights to Cuba to just Havana.

For the airlines involved, it’s not necessarily bad news…

Let’s look at this candidly…

…Airlines having route authorities to a set of destinations that represent probably the most lucrative future expansion points on the planet – literally hundreds of millions of dollars – is a real asset.

That’s Cuba.

…Airlines having to operate route authorities that now and for the foreseeable future are essentially economic dogs, is not necessarily an asset.

That’s Cuba.

It’s been five years since the initial euphoria about flights to Cuba. A quick look at load factors for the first part of this year on US flights from Cuban airports – those that are still served – tells the story.

What these data do not reflect are the ground handling and other “expenses” of flying to these airports, which are likely onerous.

Keeping the Route Authorities Pending a Change in Havana. The question is how long could U.S. carriers tread financial waters operating sub-performing flights, waiting for any material change that will allow Cuba to evolve from a socialist worker’s paradise into one that can attain the economic miracle that would be possible with a free and open political system.

The fly in the medianoche is that this opportunity will be cashed in only upon a change in government in Havana. Five years ago, that was the unstated bet – airlines could get the authorities now, and once the doddering Castro regime fell, economic reform would be full speed ahead.

Go Back to The Polly-Anna Assumptions. Back in 2014, when restrictions were initially loosened on air travel to Cuba, the ambient thinking – much of it baseless babble – was that Cuba would soon open up to huge new US business investment, regardless of the fact that the island was on a subsistence economy and no consumer or business base existed.

Plus, upon hearing the great news of new flights to Cuba, the travel industry gushed on about how some mythical “pent-up demand” for Cuba travel would soon hit the shores of the island, a veritable Normandy invasion armed with American Express cards.

Okay, it’s been five years, and just as our 2014 study on Cuba-US air traffic forecasted, Cuba – in virtually all aspects – has come up a cropper.

Cuba air service is a dog.  As a market, it’s a one-way bow-wow… and it’s not the US embargo. They can buy oil and wheat and soap and consumer goods from anyplace else in the world. Their political system has trashed the place, and until that changes, the dreams of air service success will remain at that level. Dreams. Under current conditions, it can’t work.

But now airlines can delete flying to these markets, without (presumably) losing these authorities for the future.

US carriers may well be giving a sigh of relief…

Another flight to Manchester-Boston, or opening Golden Triangle, or or another DFW frequency to Traverse City, would be a leadpipe cinch to be more lucrative than the airplane time flying to any of these places in Cuba.

Not as politically-cosmic, but probably a lot more contributive to the bottom line.

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FROM ALL OF US AT BOYD GROUP INTERNATIONAL, HAVE A GREAT WEEK!

Before We Get Started This Week…

Taking Flight Symposium – Regional Air Service & Beyond

Boyd Group International was invited to take part in the Taking Flight event held by the Washington Post In New York City, October 7. As a major aviation research and forecast firm, the Post was interested in our perspectives on a range of emerging air travel dynamics.

The event included discussion sessions regarding the challenges facing air transportation and logistics. New technologies in communication and in consumer options were front and center at the event.

Sponsored by Mitsubishi Heavy Industries, which now has a re-designed 100 seat airliner under development, the focus was on how air travel – and travel in general – will evolve in the next decade.

On the session specific to regional air access, Mike Boyd and former FAA Administrator Michael Huerta candidly took on very incisive questions from Washington Post transportation reporter Libby Casey.

Hot button issues, such as trendy suggestions to “shame” people from flying due to alleged harm to the environment, the concept of “high speed” rail, airport congestion and the pilot situation, were tackled directly and concisely.

Also on the agenda were Robin Hayes of JetBlue and Blake Scholl of Boom Technologies, which is well along with a 65-70 seat supersonic airliner.

According to numbers from the Post, over 150 people attended, and the live podcast attracted 45,000 visitors.

Boyd Group International is honored to have been included at this high-profile event.

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This Week’s Insight…

The China Opportunity –
It’s All About Economic & Political Evolution…
And A Clear View of The Future

Lots of smoke. Lots of mirrors. And a whole lot of economic gravity about to assert itself.

That latter part about gravity might soon resemble the economic equivalent of a baby grand getting tossed out of the eighth floor window.

We are talking about the near-term evolution of business and air travel demand between the China and the US.

A Temporary Mirage – Or Part of  A Developing Economic Roller-Coaster?. Just three years ago, the China-US picture was looking about as rosy as one could imagine.

Foreign direct investment – FDI – from China was booming – reaching nearly $50 billion annually. EB5 programs were in vogue, bringing more Chinese investment into projects across the US.

General Electric sold its white goods appliance business to Haier, in the pattern of IBM selling its computer and server businesses to Lenovo. Things like new Chinese-owned tire factories in rural North Carolina were regular news. Economic cooperation was in full swing.

And back in China, things were just marvy, too. Forty years after economic liberalization, China is developing a middle class that in many ways is a dead-ringer for the USA. Television shows in China typically showcase happy families in comfortable American-style homes and apartments, commuting to clean white-collar 9-to-5 jobs in their Buicks or Toyotas or Volkswagens, living a life that isn’t too far off what Americans see in shows like “Friends” or “Seinfeld” or (has this gone too far?) “Leave It To Beaver.” One popular Chinese TV sitcom actually includes a character who has a late-night call-in radio show…open and free discussion, when he’s not meeting friends at sleek cocktail bars.

It’s Not Your Father’s Red China, Anymore. It’s on a totally different planet from the 50s, 60s and 70s, with blood-thirsty mobs chanting slogans, marching to support a defined-for-the-next-ten-minutes “cultural revolution,”  aimed at ferreting out evil  bourgeoisie running dogs of capitalism, and sending families wholesale to reeducation camps. At least the traffic in Beijing was less congested. There wasn’t any.

In the 1970s, folks leaving mainland China were escaping, not traveling on return tickets. Today, air travel has been delivering huge movements of Chinese consumers eager to see the USA. Growing every year, finally reaching over 3 million by 2017. Chinese visitors are increasingly common across the USA. Accommodating them and their $6,000 per-visitor spend, has been big business at venues all across the USA. Amid soaring if geographically-uneven economic expansion, China is – or now, was – on track to be a huge consumer powerhouse.

Cracks In The Foundation – But Repairable. Alas, this new economic model is now in line for some heavy re-structuring. Along with the economic boom, a correction – or set of economic corrections is in motion.

This is important for air service planners to understand when crafting programs for China access – including at communities that will be accessing the Middle Kingdom via connecting itineraries. The rapid expansion in air service access will slow temporarily, but they need not be misled into believing it’s over. Planning for 2023 and what will be a huge flow of new business and travel demand from China is still imperative.

It just won’t look much like we’ve seen in the last five years.

For the moment: a lot of the economic expansion seen in China is not fully founded on solid reality. For the next 12-18 months, there will be significant corrections in economic growth directions in China as they affect air access to and from points in the USA.

In the last 12 months, FDI from China has almost completely evaporated. For the first time, Chinese visitors to the US dropped in the first quarter of 2019 – by six percent, and Boyd Group International forecasts indicate a decline of more like 12% by the middle of 2020.

It’s The Economy, Ben-dan… The Chinese Economy.  Okay, we will start with the hard news… the China-US air travel picture will be a lot more sugglish near term (12-18 months) than now being assumed. There are major issues – all relevant to events in China – that are in play.

As for the decline in FDI, the market has changed. Both the capital available in China and the low-hanging targets to buy in the US have largely been picked clean. Over-investment on the part of Chinese conglomerates like HNA and Anbang has led to their shedding of many former investments in America. It’s not politics in this case – it’s a need for a market correction.

In China, a lot of the discretionary money generated by the real estate boom in major cities is starting to evaporate. Auto sales in China are down a whopping 15% – a sure red flag that discretionary income is slipping big time… that’s the same income sector that drives Chinese tourists to Yellowstone, Niagra Falls, and Chocolate World.

Huge Chinese real estate projects – many generated by municipalities playing fast and loose with investment laws – are coming up croppers. There are literally entire cities that have been built on spec and are empty. Financially, a lot of investors are getting schnookered. Banks are getting shaky. One relatively small bank in northern China reportedly needed a $90+ billion bailout earlier this year.

Then, there is a massively slowing economy – officially it may be below 7% this year, and actually may be a lot lower. There are factories that are closing and the fact is that, socialist doggerel aside,  there isn’t much in the way of a social safety net in China. Also, China is finding that a lot of what they export can also be made elsewhere in the world, cheaper and with less bureaucratic hassle. Then comes robotization of factories – which erases much of China’s labor cost advantages.

Oh, and the politicians and some in the travel industry on this side of the Pacific who can’t control themselves from blaming this on “Trump’s trade war” – they’d be well advised to get some facts, first. Actually the fallout of the U.S.  “trade war” on China is the equivalent of whacking a small dent in the fender of a pick-up truck that’s already been t-boned at a railroad crossing.

So, Where From Here?. Economic corrections tend to be positive processes. There is a huge sea-change coming in the basic foundation of the Chinese economy. Our Airports:China forecasts are based on the actual growth generating at most an annual 5.5% increase in air traffic in China over the next five years.

But what we’re going to be seeing emerging in the next 12-18 months in regard to China-US travel and investments will be fundamentally different and a whole lot stronger long-term (36-60 months) than expected. Lots of structural changes. Take it to the bank… by 2023, China-US air travel demand will skyrocket. To be sure, a lot fewer tour buses descending on US shopping malls, disgorging Chinese intent on buying a Louis Vitton clutch. But more business and FIT travel.

Even Montana May Benefit. Example: Yellowstone will likely see a decline in Chinese tour movements, and a decline in total visitors from China. But it will see an increase in individual travelers … the category that tends to make flight connections to interior points, rents a car, and sets its own itinerary. That means that as a result, airports such a Bozeman will be seeing an increase in Chinese travelers. Not enough to build a new rental lot, but another 2,500 – 3,000 annual passengers that weren’t there in the past.

Another key point is that it will be Chinese airlines that will be the major players – either to their US alliance partner’s hubs, or via one of the emerging independent Chinese carriers. As the graph indicates, today traffic on US airlines metal is less than 40% of the total… and as the market even grows, that share will still decline to less than 25% by roughly 2025.

But it’s still a growing pie. Today, due to the structure of China’s air service system, our forecasts indicate that less than 12% of the total potential demand for China-US travel is being met. Without true connecting hubs, and actual restrictions in airline-to-airline interlining, that natural demand is simply cut off.

But along with the economic re-structuring, China’s air transportation system is also changing. Interlining is being implemented at the 29 largest Chinese airports, which today account for more than half of all passenger generation. There will be two US-style airline connecting hubs at the new Beijing Daxing airport, another at Beijing Capital, and a fourth at now-expanded Shanghai Pudong.

Put this together – a growing economy based more on realities that unbridled optimism, and four giant airline connecting hubs, and this is the green light for every US hubsite airport, and it’s full speed ahead in planning for for every US secondary airport that is in a geographic centroid of Chineses business and educational investment.

Point: strategic planning demands looking over the horizon. It requires having a clear vision of future dynamics. It often requires the need to put “ambient” thinking and trend-lined data aside and make independent determinations of the future.

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Before We Start This Week…

BGI Participates In Washington Post Futurist Aviation Event

Boyd Group International is honored to participate this week in the Washington Post’s Taking Flight Investigative Program, held at NASDAQ headquarters in New York City.

The program brings together top-level government and business leaders, emerging voices and newsmakers to discuss and explore the most pressing national and global aviation issues of the day.

This week, BGI President Michael Boyd will be with former FAA Administrator Michael Huerta to discuss the material effects of new airliner platforms and how they will affect the U.S. air transportation system.

Other participants in the event include Robin Hayes, CEO of JetBlue, noted aviation author Captain John Nance, Richard Cotton, Executive Director of the Port Authority of New York & New Jersey, Eric Allison, Head of Uber Elevate, and Blake Scholl, CEO of Boom Supersonic.

Plan on some fun discussions and a wide scope of perspectives.

The event will be live streamed at 9 AM EST. Click here for details on the event.

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Monday Update….

Guide To Some Aviation Reporting: Stop. Listen. Then Ignore.

In a recent story regarding “decaying” US airports, a major cable news source issued this shocking observation regarding the state of air travel in America:

“Today, at U.S. airports, passengers are forced to wait in long security lines and then line up for fast food before boarding overcrowded airplanes with no free meals. So why are U.S. airports so cash strapped?”

Blanket statement. No qualifications. No reference to any source. No factual back up.

Just take to story on faith… “at U.S. airports…” (all of them, apparently) decay is rampant.

It’s an impressive visual… after being treated to Ellis Island-like conditions at TSA check points, hapless passengers must then again queue up in long, snaking lines to just to order a Double Cheese Whopper, before getting on airplanes that are implied to be like the 7th Avenue subway at rush hour – one that’s also a flying food famine.

Remember, this is from a huge news outlet, (actually, one that usually delivers some of the best business coverage available anywhere) so, naturally it should not be questioned. But today, the name of the game is reader/viewer/listener beware… you’re on your own to determine facts, and they’re sometimes galaxies away from stories like this one.

Does Anyone In The Airport Industry Take Notice? This type of dishonest rhetoric should not be ignored. It needs to be actively addressed and corrected. Plus, the media outlet that let this garbage get published should urge the writer to pursue a new career – he’s not very good at professional journalism.

Long lines? Specifically where? Well, according to what’s almost stated outright, it’s everywhere. All airline passengers are victims, all the time.

“Overcrowded airplanes?” Okay, so this is due to airports being “cash strapped?” And, according to this source, the implication is that airlines are over-stuffing more passengers than what’s legal into airliner cabins. Of course, we all know that flights leaving airports elsewhere in the world aren’t full, right?

ACI, AAAE, Chime In, Please. This is ditsy, inaccurate and unprofessional doggerel, masquerading as hard journalism. Airport planning in the U.S. doesn’t need half-baked ignorant “reporting” such as this. The nation actually has a world-beating airport system – a complete system – that no other nation can match, and which postures America for the new global generation in air transportation channels, such as UAS. But this would take reporting that isn’t consistent with the me-too trendy conclusion that our airport system is an obsolete collection of collapsing terminals and crunchy runways.

Therefore, the folks representing the American airport and airline industries should not let snarky, inaccurate drivel like this stand without responding. It’s materially inaccurate and misinforms the public.

Or, just say nothing. Yes, silence is golden. In this case however, silence is de facto agreement with reports like this one.

… And some folks still claim there’s no such thing as fake news…

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Another Fun Media Missive…

Just like the above, at some local news outlets, it seems that ignorance of the subject matter is no barrier to “investigative reporters.”

The M.O. is pretty much the same around the country. Gin up a flashy headline about crummy air service, then go out to the local airport and do some 6PM B-roll, asking pre-prepped passengers what they think about the already-suggested-by-the-reporter conclusion of poor local airline service.

“We really need direct flights to Tucson,” one traveler demands, regardless of the fact that there isn’t enough daily traffic to fill a Ford Econo-Van. “We go there twice a year, and have to make connections to get there…”

Bring In The Clowns. A newspaper at a midsize city in the South recently went this route, exposing that the local airport is falling behind because it “only has three airlines.”

Only three! This is depriving the local populace of air service,  the report implies, with righteous finality. Without more airlines, the local economy is headed directly into the ceramic fixture.

At the airport in question, those three insufficient airline brands are American, Delta and United, which can get businesses from around the entire globe to this city, in many cases with just one connection. But the local TV station, which has spent at least 15 minutes at a coffee break doing research, thinks that there’s a faceless mass of airlines just hankerin’ to come into town.

Usually in these profound investigative tomes, there’s the tag-team telepromter report on the Ken & Buffy Evening news, neither of whom could tell an airline route map from a grocery list. “We’re asking that the airport advise us what they are doing to address this lack of airlines… Our I-team will stay on top of this story and  will be reporting back.”

Subject matter knowledge need not apply. Facts and clear discussion are such a downer.

Again, it’s caveat viewer.
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FROM ALL OF US AT BOYD GROUP INTERNATIONAL, HAVE A GREAT WEEK!
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How A New Airport In China Will Affect US Air Travel

The New Beijing Airport – Positive For US Air Traffic

There’s been a lot of media coverage on the opening of Beijing’s new airport – but beyond the fluff, most have missed the real story in regard to how this event will affect China-US travel volume in the future.

So, we thought we’d cover a few bases on how airport capacity changes at Beijing (and, overlooked, also at Shanghai Pudong) will positively affect travel between China and the US, and will open dozens of Chinese commercial centers to easy air access to and from points across the USA.

Take It To the Bank… In the course of the next five years, virtually every mid-to-large airport in the US will see positive traffic effects directly due to these – and other – airport capacity projects in the People’s Republic of China.

Looking Over the Current Political Barricades. We could get into the dynamics of the current China-US market, and how it is events and changing economics in China that are – pro tem -causing this segment to decline. (No, it’s not the “trade war” – the revenue streams driving visitation and investment in the US started to dry up long before any tariff activity.)

But, instead, we’ll jump to the data and look at the future.

First, a quick glance at the forecast of passenger traffic through China’s top 10 airports:

These Airports:China™ forecasts are conservative and derived from analyses of known and expected shifts in traffic drivers at each airport.

We included the two Beijing airports together for the purposes of comparison, and we show only the expected 2019 total for PEK.  We forecast that in the 4Q of 2019, PKX will see between 3 and 6.5 million passengers, but this is dependent on factors such as the assumption that all of the traffic at the now-closed Nanyuan Beijing Airport will shift to PKX, and that other shifts from PEK will be completed by the middle of the quarter.

But the Airports:China™ forecasts accomplished by Boyd Group international indicate that the new Daxing International Airport will handle 45.3 million passengers in 2020… making it immediately China’s #9 airport.

Connecting Hubs Will Open Floodgates of Access That’s Not There Today. But these data are mostly within the current structure of the Chinese air transportation system. To be sure, the new gate capacity at Daxing (and also the new 83-gate addition to Shanghai Pudong) will open new flight capacity.

But that’s just the start, because the real expansion will be over the next five years as the three main Chinese airlines, along with their controlled subsidiaries, open true connecting hub operations at Daxing, Beijing Capital, and Shanghai Pudong.

Just to get an idea of what the Chinese air transportation system represents, here’s a snapshot of YTD July numbers from the Airports:China™ database:

The Data Show A Different Airline System. Take a look at the current level of passengers that are “flow” – connecting. Across the entire Chinese air transportation system, it’s just 2.4% of the total.

That means that 97.6% of passengers in China today are on point-to-point itineraries, and most of the connection activity, such as it is, is at just two airports, PEK and PVG. In the US, only 59% of passengers are on pure point-to-point itineraries.

That’s because today, the demand is so strong between points in China, that aggregation of passengers at intermediate connecting points is not needed, nor productive. So, there really are no US-type connecting hubs in China.

Even the largest airports – Beijing Capital and Shanghai Pudong – have less than 14% of their enplanements representing connecting passengers. By US standards, that’s nowhere near a “hub” – indeed, CLT is 70% connect, for example.

What this also means is that the business traveler in Louisville who needs to visit a supplier in Zhengzhou has a bear of a time working out itineraries to get there. With the opening of new true connecting hub operations at PKX, PEK and PVG, that is going to change, and it means a significant jump in passenger traffic between the two countries.

Trade wars and economic shifts in China notwithstanding, Airports:China data indicate that the true demand for China-US traffic is seven times what’s being carried today, and with new connectivity through these hub operations, a lot more of this will be captured.

Between now and 2023, as the three main systems – China Southern, China Eastern and Air China – build more capacity at their respective airports – PKX, PEK and PVG – this will result in connecting flights to and from the rest of China, with nonstop spokes to US airline hubs to distribute traffic across the country.

Ten Million More Visitors… By 2023,  BGI forecasts indicate that US airports could see another ten million passengers coming into the USA from China. The demographics will change, moving toward more FIT (non group)  travelers, which will completely change spend patterns and travel patterns.

In addition, the vastly increased access between internal US cities and internal Chinese commercial centers will tend to spike new industrial investment from the Middle Kingdom.

Growth Killer: Internal Political Turbulence. There are, however, some distant and troubling noises coming from inside China that could affect this picture. In fact, if certain political and policy planets align the wrong way in China, all bets could be off. Not likely, but possible, and these considerations must be included in future planning.

One is the growing economic uncertainty, such as the declining real estate bubble and over-investment in that area.  Banks may be an issue, with one in northern China reportedly needing a $90 billion bailout. If that is much more than a one-off, there are big problems ahead.

Also, there are political issues and some indication that the blossoming Chinese business base may be in line for renewed political intervention. Furthermore, the basic underpinnings of the Chinese economy are evolving. China is finding that much of its manufacturing base can simply move to other countries. China has grown and prospered in the last 40 years by reducing government control. If that reverses in any significant way, all bets for future China-US travel growth are off.

The assumption is made in this forecast that these dynamics will evolve in a market-positive manner.

The take-aways are these:

• The true potential is enormous. Despite any political differences, the true unmet demand between China and the USA could decline by 50% (it won’t) and still represent a huge jump in traffic.
• There will be at least four newly-developed airline connecting hubs in China by 2023, allowing easy feed between Chinese cities and US cities, with connect hubs on both sides of the Pacific.
• Alliances between Chinese airlines and US carriers will focus on feeding Chinese carrier hubs. Outside of the top 6 Chinese cities, and a few one-off situations, there will be limited opportunities for US carriers to enter non-hubsite markets in China.

For More Insight… Boyd Group International is the leader in analysis and research in the China aviation sector. For communities and airports looking to build outreach with China, the current situation represents a strong opportunity.

There are major economic revisions going on in China. Some are of concern; others indicate an inevitable shift to additional trade. BGI monitors these dynamics as they will affect China-US aviation, and we are the only firm in the US that has this as a core competency.

If you’re interested in gaining more insight, or further specific research on China, just click here and we’ll get back to you.

Cuba Air Service…

For US Carriers, An Investment Pending Political Change, Or Just A Financial Venus Flytrap?

Just in from Havana…

… Fuel rationing has now become full-blown fuel shortages…

… Basic foodstuffs still tightly rationed…

… Belt-tightening in all areas predicted by the government…

… Electric blackouts now predicted

Well, it is a unique destination. Let’s face it. There isn’t another destination in the Western Hemisphere where you can see all that with one simple ticket.

Yessir, just the place that’s ripe for air service from the USA, with happy vacationers just hankerin’ to get down to the wonderous resorts where an extra roll of the local version of Charmin is a big deal, and to stroll along the Malecón in quaint Havana, navigating around the lines of Cubans waiting patiently to claim their weekly bar of soap and rice ration.

‘Course, none of these things are new to Cuba over the past 60 years. The latest piñatas to blame are the US embargo, and the fact that equally-challenged Socialist partner Venezuela can’t send free oil, anymore.

And it’s a line of hype that a lot of the US media just repeats without any discussion of the fact that there is very little in the way of Cuba buying oil on the open market. As for the embargo, it’s a US embargo, not a global one. Cuba can buy locomotives from China – which they do. Or cars from South Korea – which they do. Or food from across the planet – which their defunct political system cannot afford.

Their problem is a Socialist system that has trashed the entire nation.

And that’s the reason that the predicted air service tsunami between the USA and Cuba has never been more than a ripple in a polluted pond. And it will remain so for at least for the foreseeable future.

Ten years ago, before the Obama rush to open relations with the Castro folks, Boyd Group International published the first independent analysis of the air service potential between the USA and Cuba. Five years later, in the midst of the euphoria of newly-permitted air service, we updated the report.

In both cases, we concluded that U.S. airlines had far more traffic and revenue potential in expanding to Columbus, Mississippi than just about anywhere in Cuba. (That’s not just hyperbole, either.)

Any market planner who might suggest adding a domestic market with the attributes of the Cuba potential would find himself with a newly limited career path.

When The Opportunity Came – Prudent Planning Said Jump On It. In reality, even with the dismal economic factors, US airlines actually had no choice but to take a chance on Cuba route authority when it was offered.

As we noted in our studies, Cuba represents probably the biggest future market bonanza ever faced by the North American airline industry. When that door to route authorities was opened, getting in., even ahead of a pending a collapse of the Socialist paradise set up by Fidel Castro, would be an investment in the future.

But now it’s clear this is at least one complete Cuban government change away, and then a few years of cleaning up the economic mess made by the Castro clique.

For the foreseeable future, other than VFR traffic, and a smattering of adventure tourists, (and even there, only to Havana) there isn’t any opportunity for expanding Cuba air service.

The question comes up in regard to whether there are better applications of airline resources than flying to a place where there is near-zero true market growth on the horizon. Yet, once the Cuban government kleptocracy collapses, these route authorities will take on whole new economic potential.

Just a matter of how long.

The International Aviation Forecast Summit

Setting The Pace As the #1 Industry Forecast Event!

As hundreds of regular attendees will attest, the Boyd Group International Aviation Forecast Summit is the one event that delivers data, perspectives and forecasts that gives them the competitive edge.

And 2019 raised the bar even further. We’ve posted a summary and lots of pictures on the Summit site (click below) – and our attendees can now pull down many of the presentations on the Summit app, including the Airports:USA enplanement forecasts and those delivered by IATA and A4A.

Our Thanks To All. We want to again thank all the participants and attendees that made this year’s IAFS a hge success.

This includes all of our sponsors and exhibitors, particularly our Platinum Sponsor Partners, Southwest Airlines and United Airlines.

For a review of the exciting areas explored with aviation thought-leaders, and pictures of the 2019 IAFS, click here.

Venue Selection 2020. We are now reviewing a number of potential candidate locations for next year, and will likely be announcing the winner after the first of the year.

The IAFS has also proven to deliver high profile for our host venues, including new conference business from attendee companies. Our 2015 Summit in LAS, for example, delivered earned media for the city approximating $2.8 million, and social media reach of 35.4 million. Other venues have seen repeat conference business from aircraft suppliers, directly due to the exposure generated at the IAFS.

We are honored for the attendance and support of the IAFS from across the industry and across the globe, and we’re planning an even more exciting event in 2020!

US Labor Day Holiday…

The weekly update – and exciting information and data from the 24th Annual International Aviation Forecast Summit – will be posted next Monday, September 9, 2019…

In addition to the enormous insights from the airline and aviation CEOs, we’ll be covering:

How $3-power per hour electric aircraft may totally change pilot training…

An outline of America’s airport system advantages in the global economy… elsewhere, they certainly have impressive and important airports at Beijing and Istanbul and Singapore. But we have Worland, Wyoming – and 3,500 more

How rural and isolated airports will become a contradiction in terms

How US enplanements will grow almost 33% by 2029…

The long-term fleet views from Airbus, Boeing, Embraer and Boom.

And a lot more!.

In the meantime, click here to take a look at the opening video of the 2019 IAFS – it will give an idea of the scope and direction of this year’s event.

Disruptive Opportunities In Aviation’s Future

If you’re joining aviation leaders at the International Aviation Forecast Summit, August 25-27, come prepared for some serious  heresy…

The global and industry media will be there, too, so it’s all on the record.

Global Manufacturing & Logistics – New Metrics for US Aviation. Traditional channels of global trade are changing.Fundamentally – in a decade they will barely resemble what we see today.

Hint: the value of time will increasingly be the new metric – replacing labor cost – which is starting to get zapped off the advantage list with expanding robotic manufacturing.

The latent advantages of the US aviation system as a distribution and communication system has been missed entirely.  The assumption is that sweatshops in backward nations have an unshakable lock on manufacturing. Think again. And new aviation channels will be a foundational part of it.

Traffic Growth Profiles Have Shifted: U.S. air traffic, coming off of a 5.5% expansion in 2018, is tracking close to 4% this year, and indications for nearly 3% annually in the next decade. One reason: it’s no longer just “air service.” Airlines are increasing posturing air travel as a discretionary spend. That tosses traditional forecast methodologies into the land fill.

The Fleet Pain Is Over. Most of the downsides attendant to airline fleet shifts – such as the continuing reduction on 50-seat fleets – have already been registered.  The small airport air service issue has been decided already.

New Facilities at Istanbul, Shanghai and Beijing. But We Already Have An Airport at Worland, Wyoming – and over 3,500 more. Don’t laugh. It’s a pertinent point. Reality: the U.S. is today prepared for the new global manufacturing, trade and logistics systems that will emerge in the next decade.  We’re covering it at the IAFS.

New Powerplant Technology – Can Electric Make A Difference? Maybe sooner than we think. Extension cords not required.

New Business Intelligence Channels – New Metrics Needed. The new aviation industry needs new metrics… because it’s a new set of businesses.

And these just cover a  couple of the highlights of the IAFS…

Mind-Challenging Concepts  and Perspectives That Go Beyond Droning Panels

The Boyd Group International Aviation Forecast Summit is just a bit more than a week away. It promises to be the most exciting, innovative, and thought-disruptive in our 24 years of the event.

First, we want to thank all of our sponsors of this year’s IAFS™ including our Platinum Sponsors, Southwest Airlines and United Airlines.

We want to acknowledge the teams that are participating in the pre-Summit Workshop program on Sunday afternoon. These offer more insight than other conferences in their entirely.

All are exciting, and the Cirium Workshop – What A Difference A Data Makes – will set whole new perspectives in aviation data and planning.

IAFS™ – The Only Event Entirely Focused On The Future

The entire IAFS™ is engineered to illuminate the futurist views of the thought-leaders shaping aviation. It’s all about exploration, based on their views – not pre-canned subject panels that are cookie-cutter sessions at other conferences.

In addition to the incisive views from aviation leaders, there’s a range of forecasts that no other event even gets close to.

Let’s touch on them…

Traffic & Trend Forecasts – We Have The Future Surrounded

First, Airports:USA™ – these are the only airport forecasts accomplished entirely independently in the private sector. No political interference, and no second-agendas. Most importantly, Airports:USA™ is based on real-world traffic factors, not the methodologies used by the FAA, which were largely founded on the airline industry that existed back when Dwight and Mamie were ensconced at 1600 Pennsylvania. They don’t work today.

We’ll be covering the new drivers of passenger growth – how econometrics alone are not reliable, and how aviation planners can look to the new factors that generate air traffic.

Expect a couple of sacred cows to get barbecued – we’re going to illuminate how a number of traditional traffic-enhancement assumptions – a.k.a. some “air service development” approaches – are now like attempting to get a cadaver ready for a ballroom dance competition.

Key Factor: We’ll be outlining where spikes in growth will take place due to changing global logistics channels, and how the U.S. airport system puts the USA in the crosshairs to benefit. Big time.

New Airport Planning. Contrarian – But Accurate – Thinking. Yes, there are great airports built elsewhere in the world, like the new Istanbul facility, Singapore Changi, Shanghai Pudong’s new 83-gate addition, and the soon to be opened Beijing Daxing International. Big money being invested now – elsewhere in the world. Don’t hear much about what’s going on here… because it’s already happened.

“Other countries are investing in the future, and we’re not!” the pundits announce, typically with the cliché comparison to the old LGA terminal. A wonderful terrarium of closed thinking. Nothing like the safety of group-think.

Here’s a rap-stopper for their next cocktail party. The USA has indeed invested billions in a robust airport system. It’s in place and ready for the new emerging global business environment.

Yup. Airports like Worland, Lynchburg, Merced, Pittsfield, Gaylord, Thief River and Glendive, and 3,500 more such facilities – whether commercially-served or not – are our future global advantage, particularly in light of major, structural and fundamental changes in global manufacturing, trade and logistics, which, again, we’ll discuss at the IAFS.

We’ll be outlining the how’s and whys. One idea: don’t miss the pre-Summit Workshop on the future of drones – they are a key part of the new future.

Yes, this would appear to be lunacy… and it certainly can be called that, within the context of today.

But the Summit is all about the future.

Get your heresy freak on, and join us at the Airports:USA® session.

A4A & IATA At The Summit. And, not to worry, there will be lots of additional forecast perspectives at the IAFS™.

We are honored to have John Heimlich, Chief Economist of Airlines 4 America, with his ten-year forecast. For the international perspective, IATA will have Andrew Matters, Deputy Chief Economist at the Summit.

Then toss in our exclusive Airports:China™ projection of that nation’s traffic at its 200 largest airports, including potential new U.S. gateways to China, and we’re coming at global and domestic forecasts from all sides.

Airline Fleets – Planning For New Air Travel Dimensions

Aviation and global logistics will be affected by the fleets that will be coming into operation in the future.

As usual, we have our friends from Airbus, Boeing, Embraer, Boom Supersonic and Rolls-Royce presenting their individual perspectives of the future fleets and operating systems we’ll be seeing in the next ten years.

But this year, we’re excited to have two more dimensions added.

Electric... On the smaller end – Bye Aerospace will present the future and the opportunities of electric aircraft. Battery technology is making huge strides.

Hypersonic – On the more futurist end – Hermeus Hypersonic will be at the Summit to outline the potential for travel at 5X the speed of sound. For military applications, this concept barely gets any notice. But for passenger air travel, well, people just roll their eyes.  AJ Piplica,  founder of Hermeus,will probably have some visions that no other aviation event can get close to.

Fuel Forecast – It’s More Than Just Supply & Demand

This year again we welcome Mr. Ben Brockwell, Director of Oil Price Information Services, to discuss the dynamics that will determine what airlines will be paying for fuel. It’s more than just the price of the stuff coming out of the ground… it has to do with other demands on middle distillates, the current and expected shifts in regional usage, changes in refinery capacity, and a lot more.

Networking? Bring Lots of Business Cards

Aviation leaders from across the industry and the world will be at the Summit. It’s the people that will be making the future happening.

Plus, in addition to the CEOs and senior executives from carriers across the globe, there will be over 60 attendees from airlines such as Southwest, American, Delta, Spirit, and many more. So, get ready to network at breaks and the exiting receptions on Sunday and Monday evenings.

Finally, The Fourth Estate, Covering The IAFS

The IAFS is a globally-respected aviation forecast event.

So, it’s actively covered by global media, including outlets such as the Wall Street Journal, Reuters, Bloomberg, CNBC, CBS, and professionals in print and electronic channels across the aviation spectrum. This year, Peter Greenburg will be holding his Worldwide CBS travel show, with recorded broadcasts from the IAFS.

Lots More, Too

If you haven’t registered, click here and plan on being at the Wynn/Encore August 25-27.

We look forward to seeing you and discussing the future!