Change Is in the Air

ALBUQUERQUE, NM — For attendees at this year’s Boyd Group International Aviation Forecast Summit held here in August, the talk given by US Airways CEO Doug Parker may have summed up much of what is going on in the airline industry — at least, in the...

• General aviation — “GA is in a world of hurt,” says Boyd, pointing out that business aviation is “not politically correct.”

• Air traffic control modernization — “Forty percent of U.S. flights are late,” he comments. And he reasserts his long-held contention that “NextGen is a fraud.”

More on North America

During a session on trends for the U.S., Boyd reiterated his assertion that “regionalization is in process” for airports and their access via the airlines. He cites Bloomington, IL as one city that could become a regional gateway, attracting passengers from Peoria, Champaign-Urbana, Decatur, and Springfield. “At some point in time there’s going to be a breaking point,” he says.

Overall, says Boyd, “We’re not looking at a growth year.” Growth in the U.S. will be some 6.4 percent through 2016 for carriers. Airline decisionmaking on markets will depend as much or more on air carrier strategies versus a local population base.

A critical factor for many communities, says Boyd, will be their connection to the international marketplace, which boosts their attractiveness to international airline alliances. “International access is incredibly important for every community in the U.S.,” comments Boyd. “This is something you want to look at going forward.”

Among the most active U.S. airports, Boyd sees Dallas Love Field, which is currently undergoing an overhaul with an extensive capital development program, experiencing some 15.1 percent growth through 2016. The home of Southwest Airlines will see less traffic to Lubbock and more to LaGuardia, he says, as the carrier rethinks its tactical future.

In line with that thinking, Boyd points out that Milwaukee Mitchell International, which has experienced dramatic growth over the past several years due to the impact of AirTran and Southwest, may see its growth stall. Regarding the possibility that Southwest will make MKE a key connecting airport he says, “I don’t think it’s going to happen.”

And, besides the potential impact the merger of AirTran and Southwest will have on Milwaukee, Boyd says the impact of the combined carrier on Atlanta remains a question. He points out that at ATL Southwest is replacing a carrier [AirTran] which was even lower cost.

Among other U.S. airports, Boyd sees US Airways growing its hub at Charlotte International; Las Vegas McCarran International should see significant growth; and Cincinnati/Northern Kentucky International, which has been hit hard by airline restructuring, could see a further drop in airline service of some 20 percent. Regarding Memphis International Boyd comments, “RJs strike again,” alluding to his prediction that regional jets are on the decline, and MEM is a facility which is fed by a significant amount of RJ traffic.

International trends

Steve S. Smith, VP of global sales for Japan Air Lines, points out that over the past decade international airline traffic has grown some 40 percent, while air carrier growth in the U.S. market is up 2 percent.

Asia will remain a hot market, he says, with nine of the busiest global airports on the continent. In addition, eight of the top ten global city pair routes are Asia/Pacific routes. And, ten of the top 25 airlines in terms of revenues are in Asia; 12 of the top 25 in net profit are based there as well. In fact, he says, 52 percent of profitable airlines in the past year are based in the Asia/Pacific region.

Meanwhile in China, the country is “committed” to building 45 new airports within five years, says Smith. Beijing’s primary airport is number two in the world after Atlanta. Also, China has some 221 cities with a population over one million — the U.S. has nine, he says.

Smith encourages U.S. airports and cities to explore Asian companies which may be seeking to build factories in the U.S., which could spur international connectivity.

Meanwhile, Roger Dow, CEO of the U.S. Travel Association, cautions that this nation’s Visa policies since 9/11 are hampering tourist traffic to the U.S. He calls the past ten years “the lost decade” for U.S. tourism, with the industry losing some 10 percent of its revenues, or $700 million, which he attributes largely to harsh Visa policies that make it difficult for foreigners to visit the U.S.

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