Airline Alliances, Hubs, RJs, and Connectivity...

... 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 hundred representatives from airports, airlines, and aircraft manufacturers. The Evergreen, CO-based Boyd Group is headed up by the always cantankerous Mike Boyd, who prides his firm’s ability to offer accurate, independent analysis and prognostications of the airline/airport business. It’s good stuff. Looking ahead, it’s all about connectivity to the global economic and transportation networks, says Boyd. How a community gets there is a changing dynamic, he says, and the path will increasingly rely on connecting through the major hubs, although the hub makeup itself is changing (think St. Louis, Pittsburgh, Cincinnati).  “It’s hub access that’s going to be the big name of the game,” comments Boyd. Problem is, the key connectors for many communities – the 50- to 70-seat regional jets – are slowly transitioning out of the marketplace due to airline/oil economics, according to Boyd. “They’re going to go to the desert,” he says. Back in the mid-90s, Boyd was one of the first to foresee the increasing role that RJs would play in the U.S. air transportation system. For several years now, he has been a leading voice in predicting their demise as rising oil prices bring with them an operating cost structure that is unsustainable from a profitability standpoint. The challenge ahead is that as these inefficient airliners disappear, there is nothing in the current manufacturing product lines that will serve as replacements. Regarding airline alliances – oneworld, SkyTeam, the Star Alliance, they are the “next big step” in connecting to the global system, says Boyd. Within the next several years, he predicts passengers will be booking their flights directly through an alliance rather than with an individual carrier. “The future is matching Dayton to Dusseldorf,” he says. “It’s a new airline industry,” comments Boyd. “Everything has changed.” What that will mean for many smaller communities has become a big question mark. Thanks for reading. jfi [Look for our expanded Boyd Group conference report in the upcoming November/December issue of AIRPORT BUSINESS magazine.]