STUFF I TALKED ABOUT IN THE 2nd HALF OF 2021

Jul: I want to get totally excited about the recovery that is underway. But if you cannot fill airplanes during the summer months then it is going to be one rough year.

Aug: Carrier choice might remain in many smaller markets; however, frequency and hub choice just might be less. Will the post-COVID network architecture require the same number of pre-COVID connecting hubs?

Aug: UA will abandon the small market strategy and look to the larger markets like Delta.

Sep: Viruses mutate. Hopefully the variant’s itinerary is a one stop to Delta and not a multi-stop destined for Omega over Lambda.

Sep: Call me crazy, but the catalyst [for consolidation] this time might very well be a stable of skilled human capital. The airline with the most pilots and mechanics wins.

Oct 11: The two biggest cost centers for an airline are labor and fuel. This industry is a pattern bargainer despite the economics.
The small jet that serves many smaller communities was a money-maker for nearly all at 2015 pilot wages and $50/bbl oil.

2021 Pilot Wages + $80/bbl oil = less small community air service.

The confluence of events this time feels totally different.

Oct: Opening borders to Europe, Asia & Oceania, and Canada means access to 60% of U.S. international traffic.

Nov: Going where I probably should not go – the consolidation of airport infrastructure. This is the third time a significant reduction in short haul/regional flying has occurred and a lifeline does not appear at the ready.

Nov: Before the industry gets too far down the road on future infrastructure planning, one fact needs to finally be embraced: simply one size does not fit all.

Nov: Like the railroads, airlines and airports should be granted immunity to determine where airports within proximity of one another might be consolidated into one serving a region.

Nov: there are alternative uses for smaller airports in the event they are abandoned. Companies have been seeking airports and infrastructure for a variety of reasons. If this means some discussion about Essential Air Service (EAS), then it should. It is time to define what is today’s “essential” and that is likely to be different than Jim Oberstar’s definition in 1978.

Nov: UNDERSTATEMENT OF THE YEAR: Thinking that ALPA, APA and others just might be able to say goodbye to the plethora of scope clause carveouts they have endured as networks are rebuilt. Further, I am confident that pilot labor rues the day when they allowed turboprops to connect to mainline airplanes nearly 40 years ago.

Dec: The penultimate chapter is being written about small jets and small community air service. The ultimate chapter = market exit.

Dec: Back to the future? The year began with AA forging alliances. The coolest announcement of 2021 from a commercial relationship perspective is Allegiant's (G4) announcement of an alliance with Mexican carrier Viva Aerobus. New ULCC strategy.

#swelbar