The 'low-cost' moniker, says Boyd, is becoming a misnomer as the CNCs have learned how to match fares and compete. And, the low-cost carriers are seeing their costs rise - to wit, Southwest Airlines pilots are today among the highest paid in the U.S. airline industry.
At the same time, LCCs are looking more like hub-and-spoke airlines - AirTran at Akron-Canton and Atlanta; Southwest at Houston, Midway, and Philadelphia; and Frontier at Denver. Niche carriers: Meanwhile, the niche carriers such as Allegiant and others are a unique model that focus more on discretionary consumer dollars rather than passenger counts, says Boyd. They are by their nature more flexible and less vulnerable; at the same time, Boyd says that overall they have a minimal impact on other airline systems, while providing niche service to communities - for example, Rockford, IL to Las Vegas.
NEW FLEETS AND THE 50-SEAT CHALLENGE
Boyd labels the next several years as the end of the iron age for airliners, evidenced by the dramatic order book for Boeing's composite 787 Dreamliner aircraft. While the aircraft manufacturers represented here question that assessment, they do acknowledge that composites will play an increasing role in aircraft manufacturing in the future. Boyd points to the Boeing 707's impact on the industry and how it ushered in the jet age and the demise of piston-driven airliners. He sees a similar revolution occurring with composites.
In turn, he says, that will lead to another revolution in the supply and support sectors. "For economic development purposes," comments Boyd, "it's going to be huge."
Regarding today's fleet, the demand is for single-aisle airliners, best represented by the Series 170 and 190 Embraer aircraft which are now entering the marketplace.
While Boeing and Embraer are well-positioned for today's demand, says Boyd, Airbus continues to scramble to clearly define its next generation airliner, and is hindered in that effort by ongoing setbacks with the A380 double-decker airliner which was originally scheduled to enter service this December.
Meanwhile, Boyd and others here predict the quick demise of the 50-seat passenger airliner in the U.S. market as rising fuel prices and other cost factors have made the aircraft inefficient to operate. They are expected to be replaced by RJs with 70 or more seats, which will ultimately impact service to some smaller communities that have come to rely on 50-seaters to access the air transportation system.
Mike Mooney, an analyst with The Boyd Group, foresees a "shakeout" among regional airports as they work to maintain air service, and likens it to the shakeout that occurred in the railroad industry in the early 20th Century when many smaller towns lost rail service.
Mooney also says that Bombardier is currently studying cargo configurations for the 50-seaters for potential conversion once they are taken out of passenger service.
Over the next decade, Boyd projects that more than 11,000 new airliner aircraft will enter the market - one-third of them in the U.S. The 70- to 100-seat aircraft from Embraer will make up a large part of the new airline fleet, projects Boyd, along with Boeing's line of 787s. He says Boeing's next-generation 737 fleet will be on the 85- to 150-seat platform, while the new 747-800s will fill the widebody niche.
VLJS - DISPELLING MYTHS
With the recent certification of the Eclipse 500, the era of the very light jet is upon us, with a host of manufacturers poised to fill the market.
While many foresee a network of air taxi operations in the U.S. made up of VLJs, Boyd instead sees these aircraft primarily serving as replacement aircraft for older business jets and turboprops. That said, he does foresee VLJs bringing a whole new dynamic to general aviation.
John Knudsen, co-founder of VLJ manufacturer Adam Aircraft based in Englewood, CO, says that "VLJs fill a value gap" between airline passenger service and business aviation. He says that Adam has some 412 firm orders for its VLJ, some of them designated for air taxi service.
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Michael Boyd says common wisdom on airlines is wrong