A Recent Boyd Group International Report ...

 ... says that U.S. airlines and airports will be in a retrenching mode in 2009. The group says the U.S. air carriers will have 41 million fewer passengers this year and it doesn’t foresee a return to 2008 levels until after 2014. (View the Research Report at www.aviationplanning.com.) As far as airline and airport forecasting goes, Boyd is as good as it gets. The company has been making its projections since 1992. Back in that era, co-founder Mike Boyd was one of the first (if not the first) to predict the onslaught of regional jets onto the U.S. transportation market, as communities across the nation sought to rid themselves of turboprops, which were viewed then as some sort of second-tier travel experience. A decade later, it was Boyd who was among the first to predict the decline of the RJs, primarily due to their inefficiency when the price of oil reaches a certain price level. The Boyd Group’s latest report offers three projections: high, low, and baseline demand scenarios, with much of the forecasting based on the depth of the current recession and consumer confidence. Another caution is the circus now going in Washington under the guise of job growth. For airports, a few Boyd notes: U.S. airports can expect to see almost 50 million fewer boardings this year over 2008, which was already approximately 2.6% down from the year before. Concession and other airport revenues will experience a corresponding dropoff Leisure destinations and communities dependent on one or a few industries will be affected most. Passenger facility charge (PFC) revenues will see a reduction of $150+ million in 2009 and over $220 million in 2010. Overall, airports will capture $573 million less in PFCs between 2009 and 2011. (Says Boyd: “This is one more indicator of the importance of raising the PFC cap to $7.00.â€) The airport industry has been calling for raising the federal cap on PFCs from $4.50 to $7. What has been a political hurdle in D.C. should be a no-brainer, says Boyd, despite airline industry objections. Says Boyd, “If passengers will calmly pay $2 just to get a drink of water on a four-hour flight, an additional $2.50 in PFC charges won’t be noticed.†Boyd also projects that the feds will collect $4.9 billion less in aviation tax revenues this year. The group aptly notes, “The consolation here is that the feds largely aren’t using the money for aviation, anyway.†For three decades the U.S. Congress has been devising ways to siphon off those aviation tax monies into non-aviation programs – that “business as usual†thing we keep hearing about from our new President. Yet, on that same theme, Boyd cautions about the potential for new carbon taxes or pollution offsets that at the end of the day will do nothing for transportation and probably little for the environment. Thanks for reading. jfi