cloudy
Posts: 1613
Joined: Sat Apr 06, 2002 3:23 pm

2003 According To Boyd Group

Thu Jan 16, 2003 4:02 pm




http://www.aviationplanning.com/

This is the Boyd group's forecast of the year 2003 for the airline industry.

More of the same seems to be the main theme. Yet they have big mouths, these guys. They are not afraid to tick people off. Their main business is consulting work - primarily to small cities seeking air service.

Some of their thoughts....

- They devote allot of space to the possible repercussions of United going Chapter 7. They seem to think this to be highly likely. They are more hopefully for USair.

- They say that regionals..what they call "small jet providers" are loosing out on opportunities because few of them have any significant marketing or customer service expertise of their own. They just sell their services to the majors. The difference between a regional and major, according to Boyd, is going to end up being just whether an airline markets directly to the consumer or not. Over time, we have seen less and less difference in the actual kind of flying. We are already seeing AA's unions considering the possibility of a merged seniority list for AA and Eagle, and (if other posts are correct) CO and CO express combining under a single brand.

- There will not be allot of point to point RJ flying as some have speculated. If you look at RJ routes they are even more hub-bound than mainline flying is, and the situation is likely to stay that way. Hubs will still rule for a long time, they say. Even lo-cost carriers base their operations on hubs, with the exception of Southwest (they chide the mainstream press for not recognizing this). Continuous hubbing is an extension of the hub concept, not an abandonment of it.

- There will be a consumer revolt against RJ's seating 70 or less seats. This does not apply to the new Embraer 170 series, which they say will do well.

-They tend to discount the ability of low-co's to expand as traditional airlines decline. They think that lo-co's operate in a limited niche, and always will. On this one I think they are fooling themselves. What about ATA connection? or WN's new longhauls? both are doing pretty well from what I've heard.

- They think allot of smaller communities will lose service as turboprops continue to leave fleets. RJ service will be consolidated on what used to be mainline routes - leaving many traditional "regional" cities without service. If your city is within a couple hours drive of a much larger airports you may be out of luck. Service will be expanded only out of a few select cities that are either more isolated from the big airports or are in a position to pick up pax from other small cities (BMI - Bloomington, ILL comes to mind, though they do not mention this airport).
Some of the abandoned cities will buy turboprops on the cheap and start their own airlines in hopes of regaining traffic. They will fail miserably, according to Boyd.
 
flashmeister
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RE: 2003 According To Boyd Group

Thu Jan 16, 2003 4:06 pm

More hot air from Mr. Boyd. The only thing he's for is the death of United, and the only thing he's against is the life of United. Comes from living in the DEN area, I know, but please... enough.
 
gigneil
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RE: 2003 According To Boyd Group

Thu Jan 16, 2003 4:22 pm

Heh which is weird, of course, since most people I know in DEN love United, and speak poorly of the CO days.

Anyway. This dude may be smart, but he's cuckoo for cocoa puffs.

N
 
Dalmd88
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RE: 2003 According To Boyd Group

Thu Jan 16, 2003 5:05 pm

I actually think he is very close to the mark on most of what he wrote. The truth about UAL is they don't have a plan as far as any outsider can see. I think Boyd's view of the role of the RJ is right on the mark. I also agree with his remarks about the TSA.
 
BestWestern
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RE: 2003 According To Boyd Group

Thu Jan 16, 2003 6:47 pm

I have been reading the Boyd Aviation weekly reviews for the best part of six months now, and they are usually well written, and written with conviction. But remember he is selling a service to smaller airports.
You are 100 times more likely to catch a cold on a flight than an average person!
 
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PW100
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RE: 2003 According To Boyd Group

Fri Jan 17, 2003 4:04 am

Is this the same guy that has been yelling for over two years now that Boeing would axe the 717 within six months [meaning that it would have been closed down 18 months ago...]?

Interestingly, he observes that the regional jet [small jet providers] is/has become a very important asset for a typical hub operation, whereas some would have seen it as a major threat for hub operations by virtue of more point-to-point flying. If so, that will put even more strain in the future on the big hub airports [ORD, ATL, EWR]. I guess it will heavily depend on how scope clauses are going to develop, possible merged seniority lists from small jet to large long haul.

PW100
Immigration officer: "What's the purpose of your visit to the USA?" Spotter: "Shooting airliners with my Canon!"
 
B747-437B
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RE: 2003 According To Boyd Group

Fri Jan 17, 2003 5:01 am

Whereas I very rarely agree with Mike Boyd on anything, this time I must admit that I am in complete agreement with his forecast for UAL. It is simply a matter of time until they go under, UNLESS they make radical changes to their model.
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada
 
BA
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RE: 2003 According To Boyd Group

Fri Jan 17, 2003 8:09 am

Heh which is weird, of course, since most people I know in DEN love United, and speak poorly of the CO days.

That's very true.
"Generosity is giving more than you can, and pride is taking less than you need." - Khalil Gibran
 
cloudy
Posts: 1613
Joined: Sat Apr 06, 2002 3:23 pm

RE: 2003 According To Boyd Group

Fri Jan 17, 2003 9:15 am

------
Is this the same guy that has been yelling for over two years now that Boeing would axe the 717 within six months [meaning that it would have been closed down 18 months ago...]?
------

He also once said that TWA's death would be a plus for Boeing, since it could use the ex-TWA birds to fulfill existing orders and then shut down the line without disappointing anyone. Which shows that he doesn't know exactly how a production line dies. You kill off a line by simply not taking any more orders and shutting off production when the open orders run out...which is what Boeing did with the other MD narrowbodies and with the MD-11. You don't lose money (or don't lose much money, in the case of the 717) by simply letting the line run out. Assembly lines are costly to shut down as well as set up. To minimize closeout costs you have to do it in an orderly way. That means you normally keep building till all the orders are filled, even if birds are sitting in the desert. As long as you don't OWN the birds sitting in the desert. Even then, its sometimes better to build "whitetails" then incur the costs of a sudden shutdown of the line.

However, allot of things Boyd has said have proved prophetic. Continuous hubbing, the RJ revolution, as well as the steep decline of 19 seat service were all predicted by Boyd. I agree with about 90 % of what he says - the exception is that he does not understand the low-cost carriers, particularly Southwest and JetBlue.

 
MxCtrlr
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RE: 2003 According To Boyd Group

Fri Jan 17, 2003 12:34 pm

the exception is that he does not understand the low-cost carriers, particularly Southwest and JetBlue

The problem here is that Mike Boyd *hates* all start-up airlines and he probably still considers SWA a start-up (a frequent misconception among the media-types). Mike has a habit, while being "prophetic" about some things, of saying one thing and then contradicting himself later. He feels that start-ups that offer better service at reasonable prices will fail but turns around and says that's exactly what UAL needs to do to survive. Make up your mind, Mike!

MxCtrlr  Smile/happy/getting dizzy
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