Compton relates that half of Continental’s capacity is international; thus, being part of a global alliance is critical. Continental recently switched to the Star Alliance. Comments Compton, “Alliances increase competition. Networks are about optimizing revenue. You run the risk of being marginalized” if not part of an alliance.
At AirTran, which Boyd maintains has the lowest cost structure in the U.S. airline sector, the low-cost carrier is not yet part of an alliance, but is open to the idea, says Kirby. The current focus for AirTran is its growing presence at Milwaukee’s Mitchell International Airport, following a successful move into the Baltimore market. As the carrier moves its network West, it will continue with a second tier airport strategy
Will Ris, senior vice president with American Airlines, says it is time for countries to rethink foreign ownership rules. And James May, president of the Air Transport Association, says that “there’s been a shift from managing our fate through pricing to managing our fate through capacity.” Regarding NextGen, May calls for a “national debate” to heighten the importance of the new system and to offset individual states’ efforts in the Northeast to influence flight paths. Says May, “ATC is as much a political issue as a practical one.”
From 2010 through 2019, Boyd projects the global demand for new airliners will be some 12,847 units, with China emerging as the number two market behind the U.S. “Replacements will be the main driver for new aircraft,” says Boyd. A question mark in the U.S. market moving forward is with aircraft in the 70-100 seat range. As RJs disappear, there’s no dominant replacement aircraft being produced by the manufacturers. “We see some demand for turboprops, but it’s very low,” explains Boyd.
Brent McBratnay, director at Airbus, relates that the new Airbus A350XWB now under development is a “game-changing aircraft” and the program is on track “at full speed.” Looking out 20 years, McBratnay says global air traffic will grow some 4.7 percent annually. “Air traffic has doubled every 15 years and we see that going forward,” he comments.
Drew Magill, director at Boeing, concurs that “we’ll definitely get back to the growth rates over time” that have been experienced historically. And of course, Boeing expects to begin delivering its own game-changing airliner, the Dreamliner 787, in 2010.
Meanwhile, at Bombardier the hot news is the OEM’s “C-series revolution”, a line of new 120-149 seat composite aircraft now under development. The C-series is based on the Learjet 85 bizjet. And, the OEM is recording some success with its Q-400 turboprop, according to Chuck Evans, director at Bombardier.
While connecting to hubs is central to accessing the system, Boyd relates that the hub mix is changing. “St. Louis is gone as a connecting hub; Pittsburgh is nearly gone; Cincinnati is materially reduced. We’re concerned about Cincinnati,” he says.
Regarding growth in enplanements Boyd comments, “Things have been kinda ugly; I think they’ll continue to be ugly.” For 2010, Boyd predicts enplanements will drop another 5.5 percent; number of available seats will drop some 10.1 percent; and, departures will be down 12.9 percent.
“There is no way there’s not going to be another drop,” says Boyd. “But we’re going to have a much healthier airline industry.”
Essentially, the U.S. market will remain in the 2-to-4 percent growth range for several years after 2010, says Boyd, with lost capacity not returning anytime soon.
Boyd doesn’t forsee any major corporate mergers on the horizon among the carriers, who instead will continue to rely more heavily on their strategic alliances.
Two wild cards, says Boyd are oil prices at $60-70/barrel or higher, and proposed cap and trade legislation to reduce emissions. “Cap and trade is stupid,” comments Boyd. “It’s going to hurt small community air service.”
... are the hot talking points at the Boyd Group conference held this week in Lexington, KY. Officially called the 14th Annual Aviation Forecast Summit, the conference each year attracts several...
Cautious Projections The Boyd Group conference report By John F. Infanger, Editorial Director November/December 2001 Michael Boyd predicts the 70- to 100-seat airliner...
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...