Boyd Group President Michael Boyd suggested a major crisis is looming in the airline industry which may result in “another fundamental business model restructuring” that will not be solved by consolidation or mergers. Boyd cited the continuing ATC infrastructure deterioration, “really inept legislation” and oil as the catalysts. He indicated that the $9 billion the ATC system is costing the airlines will be compounded by oil prices reaching $80 per barrel, up from $58 earlier this year.
He said the industry and Congress are focusing on the wrong goal and should wrest control of ATC modernization from FAA, defining what it is the industry actually needs. “Instead of supporting re-labeled FAA modernization plans it is time for the airport industry, the airline industry, and general aviation to join together and take matters into their own hands,” he said. “The FAA's constant excuses over a period of years, and the dishonest ‘re-benchmarking’ deadlines, and negligently ‘re-defining’ ATC errors, all represent incontrovertible evidence that the FAA in its current structure is not capable of addressing the issue. The aviation industry needs to unilaterally begin to plan the ATC system that's really needed to meet the needs of all aviation sectors in the 21st century.”
He said the industry is “being side-tracked into silly internecine media battles between airlines and GA.” Boyd criticized airline PR efforts on reauthorization at a time when CEOs should be “storming the Administrator's office demanding results every time an upgrade program is again delayed. It is mind-boggling to find airplane seatback pockets stuffed with in-flight magazines featuring ghost-written editorials trumpeting how FAA reauthorization is the wondrous key to a new ATC system that will reduce delays and vastly increase the efficiency of air travel,” he said. “Based on the clear performance record of the FAA, that simply isn't going to happen. But the airline industry tolerates this fantasy, to the detriment of its own bottom line and to its customers. What's worse is that this ignores the economic impact to the nation resulting from the constricted, inefficient, and rationed air transportation system caused by the bungling of the FAA. The airline industry knows full well that the ‘NexGen’ system isn't new, and that the FAA isn't going to have any such thing in place in the next decade. What those happy-face, in-flight magazine editorials tend to gloss over is that, even if the FAA could actually do what they claim (which they've proven they cannot), it will be a decade before the ATC system is ‘fixed.’ The fact is, the US air transportation system does not have the luxury of being able to wait that long.”
He also said while Congress and consumers are focused on airline delays and passenger bills of rights, the real problem is growing given the decade’s long failure of the FAA to modernize. Related Story
Boyd noted that with staffing cut to the bone, labor costs minimized, he did not see where future cost cuts will come from leaving the only avenue the $9 billion the system is costing the airlines. “The airline industry may have run out of time,” he said. “Too many years wasted trusting the FAA to get the job done. Too many years of silly public relations events, lauding the FAA. Unless these costs can be offset by a combination of new revenues and lower costs, 2008 could shape up as another near-disaster year for the airline industry, contrary to what was foreseen just a couple months ago.” Related Story