Cautious Projections

• Airlines will move away from ownership in their feeder carriers, either assimilating the operations into the major or allowing the feeder airline to stand alone. This should help resolve the labor disputes among pilot unions regarding disparate salaries, as witnessed after American’s acquisition of Reno Air.
• Airports will find that they will need to do their homework when it comes to demonstrating to a carrier that theirs is a high yield market. At the same time, attracting new air service will become very difficult in the short term. That includes Southwest, says Boyd, which will become more select in adding cities to serve. "Southwest won’t do another Jackson (MS)," he predicts.
• While some smaller airports will see frequency or entire carrier service cut, there are some bright spots, says Boyd. Airports that serve isolated communities situated far from a hub should not see any significant cuts in carrier service. At the same time, airports in communities that have strong business ties to the global community, such as Peoria and the Quad Cities-Moline, IL, should be able to weather the cutbacks.
• Airports in Phoenix, Burlington, VT, and other high economic growth communities should continue to see strong air service.
• Essential Air Service (EAS) communities that are served by 19-seat aircraft will have difficulty retaining air service. The EAS program, he says, needs to be entirely revamped. "We need a real subsidy for places that really need it," he says.
• The U.S. carriers will begin to shift the fleet makeup to the new 70- to 100-seat aircraft, a primary reason being fuel efficiency. In the short term, however, the smaller regional jets will continue to have a major impact, particularly to smaller communities, continuing a trend of recent years. Long term, Boyd sees the smaller RJs being phased out. And, while recognizing that there is a market for the super-jumbo Airbus-380 now under development, he does not see demand justifying cost for developing the aircraft and sees the project putting Airbus in economic jeopardy.
• There will be little new airline entrant activity. "Friends don’t let friends start airlines," says Boyd.
Boyd says that the recent financial aid package to the carriers by Congress was necessary, and cautions that airline bankruptcies could still be on the horizon. In particular, he questions the viability of United Airlines, whose CEO was recently quoted as saying the company faced possible bankruptcy in 2002.
The analyst also calls for airport associations and other industry groups to speak out and stand up to FAA, cautioning that they may be too close to the politics of major issues. FAA, he says, is incompetent. Biometrics, and Consensus on Security
John Cockerham, president of TouchSafe International of Huntsville, AL, and David Forbes, CEO of Denver-based Quo Vadis International Security, told The Boyd Group conference that biometric identification techniques are an answer for better security at U.S. airports. And, both say it’s time to look outside industry for input.
According to Cockerham, security-related reactions at airports following September 11 have been long on perception and short on reality. The current system calls for finding an undesirable object to be able to identify an undesirable person. "That’s got to change," he says.
Cockerham sees biometrics as playing a key role toward improving security by identifying the passenger by way of a personal ID card that can be plugged into the airport system upon check-in. He calls for bringing together the various technological advances in fingerprint biometrics, facial geometry, voice recognition, and stress screening.
Radio frequency identification (RFID) tracking would then be used to follow the passenger through the airport and onto the aircraft. Luggage, meanwhile, will have similar RFID tags that tie directly to the specific customer, and be able to be tracked through the system as well.
Cockerham calls for creating an aviation security task force that would have representatives from an airline, an airport, operations, the technology sector, along with $5 million in seed money. Possible solutions would then be tested onsite at the participating airport.
Forbes, an Englishman, says Europeans have been dismayed by U.S. security inaction since the 1988 bombing of Pan Am 103. Specifically, he says the U.S. has suffered from regulatory confusion, predictability of weaknesses, poor accountability, low-skilled manpower, and a cost mindset, among other deficiencies.
He calls for public-private think tanks, federal supervision by a newly created agency, and firm Administration support. Forbes also sees a need for publication of a security rating for every airport, with stringent control penalties imposed on "insecure" airports. He also calls for biometric identification, which he deems essential for airside access.