What To Look For In 2015

March 4, 2015

My current (at the time of writing) issue of Aviation Week & Space Technology (AW&ST) has the year—2015—spread in huge print across the cover.

Fascinating!

AW&ST reports that U.S. airlines just ended a wonderfully profitable 2014 “mainly by limiting capacity and taking advantage of strong demand and cheaper fuel. They “should have another profitable year in 2015.” But, AW&ST wonders “if fuel prices continue to fall, will airlines stick with the strategies that have made them so much money? Or will stronger carriers search for more market share and disrupt the status quo?”

Hey, folks, this has happened before. After massive airline deregulation of the airline market in 1978, U.S. airlines first went into a slump which hurt airlines and airports. In the 1980s they decided to go after market share, which worked out to be at the expense of airline profits. Business climbed. Airport income climbed also, but airlines lost their collective shirts. I remember Patrick Wilson, director, Tri Cities Regional Airport in east Tennessee, showing me the airport’s income charts of this period. 

It has often been said that airlines can’t stand good times—that they throw their new-found money away trying to take business away from competitors. I hope that doesn’t happen in the near future, but—hey—if AW&ST is worried about it, so am I.

AW&ST also points out that air cargo is beginning to show signs of a return to health, “but slowly and in a heavily altered form.” For one thing, the airplanes are, and will be, changing to become more cargo friendly.

This, too, is nothing new. I’m one of the aging citizens who remember when cargo was hauled by aging Piper Aztecs, and the pilots—called freight dogs—were given little respect and less service. When FedEx started, it was a source of amusement to many of the “experts” in the industry. Imagine—it was said—buying jet airplanes to haul little boxes.

Air cargo has come a long way since then, and I’m proud to say that I wrote a column decades ago wondering if we were giving air cargo haulers enough respect and service. As they say, even a blind hog will find an acorn every now and then, and a columnist will get it right only a little less often than the hog.

AW&ST also predicts that 2015 “could be the last chance for FAA—and assistant administrator Edward Bolton—to show NextGen success, and how the organization performs over the next twelve months will be crucial, as Congress and the industry will have [Bolton] and the FAA under a magnifying glass.” In other words (mine) the past record of NextGen’s fits, starts and u-turns has not gone unnoticed. 

There is a lot more in the AW&ST issue, including predictions on aviation in Asia, the Mid East, China and Russia. Much of it will be important to your airport.