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.