Boyd Conference Notes
I just returned today from Mike Boyd’s annual Airline and Airport Planning Conference in Park City, Utah. The day and a half conference covers a lot of issues about the industry today and what we will see in the next 2 years. One thing for sure is that the entire industry is doing better at least financially speaking. All network carriers have been getting their costs down, albeit at the expense of their employees and their suppliers.
While the overall industry is doing better there was a divergence of opinion on what has to happen in the future before the industry can get healthier yet. For me this issue was most keenly brought to light with discussions between Mike Boyd and Doug Parker, Chairman and CEO at US Airways. Mike Boyd believes that Capacity and Demand are in balance as evidenced by the 75-85% load factors being reported by the airlines.
Doug Parker believes that while load factors are high they are a result of too low of fares, which are a result of too low of fares, which result in miniscule profits for the airlines. Doug also went on to say that we are in good times now but when the next downturn comes, things will be worse and losses will again be substantial. Doug’s Premise is that further consolidation in the industry must take place to take excess capacity out of the market. Mike believes however that for now at least, things are good and getting better. Interesting stuff.We’ll see how it all plays out.
On the trip home from Salt Lake City via Denver, I met a gentleman from San Francisco going to CAK and it was his first trip using Frontier Airlines. He typically uses Southwest Airlines into Cleveland Hopkins. Guess what?The great Frontier service and experience of CAK has won another convert!
