Required Reading for all members!

Ok I'm giving an assignment to all members on this board and it is required that you do it. Mike Boyd is probably the most educated person on the earth when it comes to the aviation business. His predictions generally are on the money and he gives you a fantastic insight into the airline industry.

Read his 2006 predictions.
http://www.aviationplanning.com/Predictions2006.htm

For those who won't read it here's some highlights.

-Slower growth at secondary airports as LCCs move towards mainline airports. 1% growth seen in New England airports like PVD and MHT.

-Possible decrease in U.S Mexico traffic.

-No major airline mergers.

-EOS and Maxjet business plans failing.

-RJ fleets shrinking to less then 1200 nation wide.

-Fleet demand for 100 seat aircraft to raise.

-A380 production only reaching 300 airframes.

-737 replacement announced based on 787 technologies.

-If NW comes out of Chap 11 they will be in the best position for the exploding Asian market.

-Southwest is the airline to watch as it sets out to destroy competition like U.S Airways and Frontier. Possible new fleet type into the 100 seat market.

-DFW will be American's crown jewel linking an expanding economy in the southern U.S to expanding economies in Asia and South America.

Very interesting. Unfortunately I think some geo-political problems in the near future will throw it all down the toilet. :)

Tommy, thanks for sharing this, very interestimg reading !

LGA777

Asia is definitely where the WORLD is going to in the coming years, so I definitely agree with that. The outcome of the Wright Amendment debates will determine how much effort AA puts into Asian routes. Besides, international traffic is the only safe place for legacy carriers these days.

The A380 will be around of course, but will not be a queen of the skies like many think. It will do well only in more dense areas like Asia and the Middle East.

I don't know if I see Northwest emerging from Chapter 11 at all, so I don't know about that one.

I think drifting form RJs is smart, as they are just not as profitable unless there is extreme frequency.

Frontier will definitely need to get another aircraft tin order to expand at this stage in the game for them.

Where FlyI failed as an LCC, MaxJet and EOS will fail in the high-end market. Though a good product, the business of it will not allow them to succeed.

I live the Cliffs notes you posted Tommy! ;)


I am a bit surprised to see the comment about Mexico traffic-

And while I love hte idea of Maxjet, looking back at history, don;t see maxjet or the like flourishing, thought I would pay it!

interesting remarks about hte 380. I mean, its come out in an enviroment similar to Concorde's arrival in the 70s and seems it may face a simialr shortcoming...all in hte timing.

I like hte comment about hte 737 787.

Southwest will probably continue to be a top LCC

American still has to sort its priorities out.

I'll go hvae a read about think about hte other points.
For some reason I thoght I'd read more about Dubai....

Mike Boyd has been wrong before. He has no credibility within the airline industry--he is just another pundit.

While he makes some valid points, don't take everything he says at face value.

He did predict the end of US Airways way back when.

Happy New Year all.

Quote:

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Originally Posted by Art at ISP

Mike Boyd has been wrong before. He has no credibility within the airline industry--he is just another pundit.

While he makes some valid points, don't take everything he says at face value.

He did predict the end of US Airways way back when.

Happy New Year all.

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Well he doesn't have crystal ball, he simply runs a consulting firm that studdies the industry.

As for U.S, he was right. Doesn't matter how you look at it U.S Airways is gone.... America West purchased the majority of the assets of U.S Airways including the name which it decided to take on for brand recognition reasons. Otherwise the U.S Airways that was is gone, this is the exact same thing that happened with the AA and the TWA merger, but AA dumped the TWA name. If American so chooses they could have adopted the TWA name, (wet dream, lol) but they integrated TWA into AA. As for the new U.S Airways time will tell if the merger will work, they already said they will sustain loses through 2006 and they don't expect to make a profit to 2007. If Doug Parker can pull this off he'll be a god in the industry.

Tommy-

Do you think if AA kept the TWA name somehow because of namebrand, they would be a bit more succesful? Or would the "name" of TWA not match the quality service given by TWA through American?

Alex

There was no reason to keep the TWA name, the financial downfall of AA after 9/11 would have made any difference if they took the TWA name or not. In-fact it would have made it worse, just think of the costs to rebrand AA who at the time was the second largest airline in the world. Although one can debate whose name was more recognized TWA or AA? I'd say both airlines had equal brand recognition at the time. In-fact TWA's customer service and operating performance was far better then AA's.

Tbird,

In actuality it was a merger, not a buyout. US Airways had its own investors who chipped in to make one new company.

The fact that the majority of the management was from HP and that the HQ moved are merely business decisions (and smart ones at that).

Otherwise I am no fan of Boyd, he just likes to hear himself pontificate.

Regards,

Art

The investors U.S Airways found didn't invest in U.S Airways but the new holding company formed to facilitate the buyout. If you read the bankruptcy papers America West Holdings was given permission to acquire U.S Airways Inc and form "The U.S Airways Group Inc", which is the holding company. If I had scanner I'd scan the documents, its interesting reading if you like that kind of stuff. Press releases from airlines are worded very carefully. American and TWA called there coming together a merger, but it was a takeover, only American used its own capital and AMR Corp was the holding company who integrated or "merged" the two together.

If you want to get technical the new holding company merged the two together to form a brand new company but technically America West was granted permission to form the new company and the new company was granted permission to bring the two together.

Again however the old U.S Airways did disappear, its stock was canceled and only stakeholders and creditors received stock in the new company. While America West shareholders received shares in the new company. The shere fact only AWA shareholders received stock in the new company classifies this as a buyout. Also the old U.S Airways Inc. incorporation as public entity was also dissolved. Today's U.S Airways is an entirely new airline built upon the capital of America West and U.S Airways.