Boyd Group International Aviation Forecast Summit: Airline Passengers Down Through 2010

Fewer Passengers. U.S. enplanements will fall from 748.9 million in 2008 to 674.6 million in 2010, before beginning a slow rebound. Nevertheless, there will be 16 million fewer passenger trips in 2014 compared to 2008. "The airline industry is now more rational, and won't add back capacity very rapidly, even with an economic upturn," said Michael Boyd, president of Boyd Group International.

Different Aircraft. Fleets will restructure due to the declining economics of 50-seat jets, resulting in over 40% of these airliners being retired by 2014. Because there are no viable replacement airliners on the drawing board, this will mean that small community hub-feed routes longer than 500 miles will become increasingly problematic.

Increasing Dependence On Global Traffic. Another key forecast dynamic is the increasing dependence on international traffic to support airlines' domestic route systems. "Foreign visitors don't all stay at the gateway city," Boyd noted. "On average, each international passenger goes on to make at least 1.5 additional domestic enplanements. Result: over 25% of the nation's domestic air traffic is directly generated by international connectivity." This dovetails with another trend forecasted by Boyd Group International: the emergence of the global alliance as the de facto consumer product, with member airlines increasingly evolving into "metal neutral" lift providers. In ten years, the passenger may be booking on the alliance, not the airline. "Air service enhancement programs, even at small communities, must now work toward alliance-connectivity, instead of just airline brand connectivity," the forecast warns.

Global Overview. Because of strong domestic systems, U.S. airlines may not at the moment be as challenged as EU and Asian carriers, according to the forecast also presented at the Summit by ICAO. But all carriers face the challenge of generating sufficient cash to renew fleets in the future.

The Aviation Forecast Summit is held annually in October. This year, it was attended by over 250 leaders from airlines, financial institutions, airports, and suppliers. In addition to forecasts covering traffic, fleets, and airline trends, the event included in-depth discussion sessions with planning executives from Southwest, Republic, Delta, Continental, United and others. Airbus, Boeing, Bombardier all provided their own 20-year global aircraft demand forecasts as well. For additional facts and highlights, www.AviationForecastSummit.com.

Boyd Group International is a multi-dimensional aviation research and consulting firm headquartered in Evergreen, Colorado. Founded in 1984, it works with airlines, airports, financial institutions and other companies in forecasting and strategic planning.

CONTACT: Boyd Group International Michael Boyd (303) 647-2000 www.AviationPlanning.com

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