OAG Releases H1N1 Tracker

Developed for government agencies preparing to fend off the spread of pandemics such as the H1N1 virus now circling the globe, OAG released a modeling tool this week that could be critical for airports, airlines and other travel companies. Having experienced dramatic passenger declines from the virus last spring, northern hemisphere operators are only now coming into the flu season and while the illness itself is not as severe as originally projected, the focus will be on stemming the spread with airlines expected to play a major role in that process.

It is already gaining increasing media attention in the back-to-school stories and we have already seen at least one story on H1N1 and airlines. In July, Delta reported a $250 million hit to 2009 revenues resulting from H1N1 fears last Spring. The International Air Transport Association said the flu accounted for a one-point passenger decline worldwide in May and, in Central America it took a huge toll accounting for a 62.4% fall in total passengers just in May alone.

The Air Transport Association (ATA) blamed its dismal May results on the impact of the H1N1 swine influenza outbreak in Mexico as partially responsible for the 9.5% drop in passengers. “The H1N1 influenza outbreak compounded an already weak demand situation, negatively impacting industry cash flow and forcing a closer look at current levels of flying,” said ATA President and CEO James C. May.

In a “worst case” scenario, the White House expects half of the U.S. population could become infected, which could result in 90,000 deaths. It is assuming that aircraft will play a major role in disease spread.

The disease prompted the Association of Flight Attendants to urge the FAA to require carriers to provide flight attendants with latex gloves, a move the FAA rejected. Related Story

Powerful Tool
Using worldwide flight schedule data, the tool visualizes the elapsed time of how disease is spread from any single airport in the world on any given day within the future schedules time frame, said OAG of its new product.

"The world is now truly a global village where it is possible to reach almost any other point on the planet by air within just one day,” OAG Aviation Senior Vice President, John Weber said. “Flu bugs don't buy their own tickets; they travel with passengers at the same speed as aircraft. Understanding the logical path of travelers over a global network of connecting flights could be a major milestone in helping to minimize the escalation of any new epidemic."

It allows planners to define any origin point, and, by using a slider bar for elapsed time from origin point departure, lets the user see how far a flu bug could spread in minutes or hours, presenting the results a graphic display or in data table format that can be exported for further analysis. With this information agencies can alert cities and airports as to the potential impact as elapsed time from departure increases. It will also alert airlines at down-line connection points as well as those that may already be impacted and estimate how many passengers will be exposed.

"We have been working on this prototype since the first outbreak of the H1N1 virus and are now in a position to engage more fully with organizations to help them with their preparedness plans,” said Weber. “Our initial discussions with government departments have confirmed our view that there is real value in using our data to predict where a virus may travel over the commercial air lanes. What we bring to the party is the reliability of our global schedules data, our experience with data integration and applications, and a very useful tool that allows planners to visualize the data in terms of global geography. Our technology is very flexible so planners can lift user defined portions of OAG data into an existing work environment."

Biggest Capacity Cuts in 60 Years
OAG Aviation Solutions said the industry is undergoing the worst retrenchment since World War II and, in an analysis for Bloomberg, said the six largest carriers will drop capacity another 6.8%, compounding the massive cuts imposed in 2008. That is equal to, said Bloomberg, “erasing the domestic network of US Airways,” the sixth largest U.S. carrier by traffic.

“That would be the most since a 12 percent drop in 1942, the first full year of U.S. involvement in World War II, according to ATA data,” said Bloomberg, noting the industry was 450 times smaller in 1942. “The ATA’s analysis means that the 2009 capacity cuts would dwarf airlines’ 3.9 percent pullback in 2002, the year after the Sept. 11 terrorist attacks, and the 4.4 percent drop in 1974 amid the oil-price shock.”

Despite the cutbacks, airlines still have no pricing power and in order to get it they would need double-digit capacity cuts, according to FareCompare’s Rick Seaney. He noted the three price increases this year pale in comparison to the 15 last year and 17 in 2007. Bloomberg noted that Continental reported the revenue per seat mile flown was down 18% for August, the eighth straight month of such declines, and quoted American Express which said business fares are the lowest in six years.

Green Shoots Little Comfort
The green shoots, such as the slowing of passenger declines and Airbus’s expectations for a 2010 recovery, provide little comfort to the ailing industry struggling to get through the hear and now. After all, Boeing doesn’t expect recovery until 2011. However, the company sees the industry returning to growth in 2012, which bests the estimates of 2014 made a year ago.

Cargo, however, said the company, is expected to lead the recovery in 2010. The segment typically leads passenger recovery by three to six months, it said. It anticipates 2009 will finish with a deep decline, following last year’s deep slide, which, it noted was the first time in history for back-to-back declines.

Speaking at Asian Aerospace Expo, the company said the Asia Pacific region will become the world’s largest market over the next 20 years, with a total aircraft need of 8,960 commercial jets valued at $1.1 trillion.

"Twenty years from now more than 40 percent of the world's airline traffic will begin, end or take place within the Asia Pacific region," said Boeing Commercial Airplanes Vice President - Marketing, Randy Tinseth, who indicated the region will become 41% of the world market, an increase of nine points. "That's a big leap for a region that was not even mentioned in our earliest Boeing market forecasts back in the 1950s." Passengers are expected to grow an average of 6.5% over the next 20 years from its current 1.2 million daily passengers.

Single-aisle aircraft are expected to account for half of deliveries at 5,600, said Boeing, overtaking large aircraft deliveries as part of an effort to switch to efficient mid-size twins and larger single-aisle aircraft. The company expects Asia Pacific airlines to take 2,590 twin-aisle aircraft, while regional aircraft will account for only 440. Eighty percent of deliveries will be aimed at growth as the fleet triples from 3,910 aircraft to 11,170.

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