[FONT=Tahoma, Verdana, Lucida]The Boyd Group Advantage[/FONT]
Aviation Insight & Perspectives
Available Nowhere Else
[FONT=Tahoma, Ariel, Lucida]____________[/FONT]
Aviation Insight & Perspectives
Available Nowhere Else
[FONT=Tahoma, Ariel, Lucida]____________[/FONT]
[FONT=Tahoma, Ariel, Verdana]Hot Flash [/FONT]-[FONT=Tahoma, Verdana, Lucida] Monday, December 10, 2007[/FONT]
[FONT=Tahoma, Verdana, Lucida]Diffrn't Strokes For Diffrn't Airlines[/FONT]
[FONT=Tahoma, Verdana, Lucida]Pro-Actively Planning For A Downturn[/FONT]
[FONT=Tahoma, Verdana, Lucida]Diffrn't Strokes For Diffrn't Airlines[/FONT]
[FONT=Tahoma, Verdana, Lucida]Pro-Actively Planning For A Downturn[/FONT]
[FONT=Tahoma, Ariel, Lucida]While the me-too analysts have been chirping about the dangerous cyclicality of the airline business, and the inevitability of it driving carriers into mergers, The Boyd Group's forecasts have indicated that the US airline industry - particularly comprehensive network carriers - have never been in better shape to anticipate and pro-actively plan for when traffic softens.[/FONT]
[FONT=Tahoma, Ariel, Lucida]There's no dangerous overhang of net new capacity coming on line, and as our Fleet Forecasts have pointed out, virtually every major airline has cheap fleet capacity it can valve off quickly. More importantly, leadership at most carriers is now focused on stability, not willy-nilly market share.[/FONT]
[FONT=Tahoma, Ariel, Lucida]Delta Air Lines is cutting back on RJ markets, anticipating that higher fuel costs are here to stay. Within its small jet suppliers, the move is on to shift out of 50-seaters and into larger jets, adjusting the route system accordingly. Downside: more air service pink slips are in the mail.[/FONT]
[FONT=Tahoma, Ariel, Lucida]Northwest is actively engaged in bringing its small jet providers into larger jets. It also has the option of pulling down more DC-9 lift.[/FONT]
[FONT=Tahoma, Ariel, Lucida]American is quietly beginning to re-structure the Eagle system (aside from trying to sell it), which is saddled with too many 37-seat and 44-seat ERJs that were acquired to skirt union scope issues. (An expensive strategy, as it turns out.)[/FONT]
[FONT=Tahoma, Ariel, Lucida]Southwest is cautiously slowing expansion and is reportedly going to retire some airliners, presumably 737-500s.[/FONT]
[FONT=Tahoma, Ariel, Lucida]Frontier, looking way over the horizon, has eliminated some administrative positions, is re-evaluating its fleet needs, and has energized its employees to look for ways to increase revenues and reduce costs. As for the former, it has finally gotten its Lynx operation up and flying - which will be a net-new revenue generator for Frontier. (Frontier understands that the future depends not only on costs, but on revenue streams as well.)[/FONT]
[FONT=Tahoma, Ariel, Lucida]United. In an innovative move, United senior management lavished a quarter-billion dollars on shareholders. The fact United's employees have lost their pensions, taken pay cuts, and had their lives turned topsy to save United, apparently isn't a consideration in the front offices. Instead, United's executives seem to have determined that, yessir, there's nothing like happy hedge funds and stock speculators to get an airline through a traffic downturn. [/FONT]
[FONT=Tahoma, Ariel, Lucida]Or, maybe that's what the carrier's B-school advisors are telling them.[/FONT]
