Cargo, not tourism, may drive aviation growth

DENVER — The aviation industry is growing — and cargo, not tourists, may be driving it.

Mike Boyd, CEO of Evergreen, Colorado-based Boyd Group International, said Monday that no major appliance, automobile or industrial equipment is made entirely in one country and that shipping components will drive some route decisions for air carriers.

Increased cargo routes should, in turn, drive passenger growth, Boyd said.

At the opening of his 23rd annual International Aviation Forecast Summit in Denver, Boyd spoke about the metrics and dynamics of the industry. But historic dynamics to forecast where and how the industry will grow no longer apply, he said, because there are many new variables affecting it.

As the shipping of goods becomes more important, speed has become the new imperative, Boyd said, with companies like Amazon guaranteeing overnight delivery of products.

“The economics of air logistics will be increasingly critical and need to be lightning-fast to respond to changes,” Boyd said.

The new airline economics will lower the cost of travel, he said, particularly for long-haul flights. Leisure travel and travel to visit friends and relatives are major segments in the expansion of passenger growth. Ultra-low-cost carriers are taking advantage.

On the 40th anniversary of airline deregulation, more people than ever before are flying, with projected growth at every major U.S. airport, including McCarran International Airport in Las Vegas.

Boyd said trends in the evolution of communication and globalization and airline disrupters like Spirit Airlines and Las Vegas-based Allegiant Air are changing commercial aviation.

The top ultra-low-fare carriers — Allegiant, Spirit, Frontier and Sun Country — are fixtures at McCarran.

Boyd said about 99.3 percent of seats to markets were flown by traditional mainline air carriers in 2000, with the rest flown by ultra-low-cost carriers. Today, mainline carriers provide 92.1 percent of the seats and ultra-low-fare carriers fly 6.9 percent.

Advancements in communication technology have reduced some travel as businesses take the less expensive route of conducting meetings over the internet instead of in person.

More than 300 airline, airport and aircraft manufacturing executives are attending the two-day summit at which Boyd will deliver airport and fleet forecasts and airline leaders will discuss some of their plans.

Allegiant Air

Las Vegas-based Allegiant Air is anticipating a shift in profitability next year after the company retires its gas-guzzling MD-80 jet fleet by the end of 2018.

Trent Porter, senior vice president of finance for Allegiant, told Boyd conference attendees that the airline now serves 120 cities with more than 400 routes. While Allegiant’s headquarters is in Las Vegas, it serves the most metropolitan markets — 40 — from Orlando’s Sanford International Airport. It serves 36 markets each from McCarran International Airport and St. Pete-Clearwater International Airport.

While costs will decline with the airline’s fleet transition to Airbus twin-engine jets, operational costs are increasing with new labor contracts with pilots and flight attendants.

Porter said Allegiant is optimizing flight schedules by seeking opportunities to fly more twice-weekly flights in non-competitive markets.

Southwest Airlines

Southwest Executive Vice President and Chief Revenue Officer Andrew Watterson offered few new details about the Dallas-based carrier’s highly anticipated Hawaii service scheduled to begin late this year or in early 2019.

The company already has announced that it will fly routes to Honolulu, Lihue on Kauai, Maui and Kona on the Big Island from San Diego, Oakland, San Jose and Sacramento, California.

Watterson said the airline, which is the largest operator in seven of the 10 California markets it serves, would increase its fleet to add its Hawaii service rather than reducing flights in other markets.

Eventually, Southwest plans to fly Boeing 737 MAX jets on routes.

Southwest, which is the busiest operator at McCarran International Airport, will offer more weekend and seasonal flights to Caribbean and Mexican beach cities once the Hawaii service is established.

Frontier Airlines

Another ultra-low-cost carrier, Denver-based Frontier Airlines has made a major push into Las Vegas in the past year.

Senior Vice President Daniel Shurz said the company is focusing on taking advantage of weaknesses in other airlines’ programs to generate customer loyalty.

While some ULCCs offer a list of ancillary services customers can buy, Frontier has bundled several of the most popular into two categories. The airline’s “Perks” bundle provides no cost for a checked bag, a carry-on, best available seats and priority boarding up until check-in. The more expensive “Works” bundle offers that list, plus changeability and refundability on tickets.

Frontier also is veering away from its Denver-centric scheduling and has experimented with more point-to-point flights, including the recent announcement of seasonal service between Las Vegas and Calgary, Alberta.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

Business
Auto repair shortage affects Las Vegas
The auto repair industry is facing a national shortage of workers.
Franchising industry booming
Experts say Las Vegas is a hotbed for the franchise industry.
Africa Love owner talks about his store in Las Vegas
Mara Diakhate, owner of Africa Love, gift and decor store, talks about his store in Las Vegas. (Bizuayehu Tesfaye/ Las Vegas Review-Journal) @bizutesfaye
Developer gets approval to build homes at Bonnie Springs
The Clark County Planning Commission has approved a plan to build 20 homes on the site of Bonnie Springs Ranch. (Michael Quine/Las Vegas Review-Journal)
Dig This opens new location In Las Vegas
Remember when you were a kid and played with construction toys in the sand box? Dig This Las Vegas has the same idea, except instead of toy bulldozers, you get to play with the real thing. (Mat Luschek/Review-Journal)
Town Square developer Jim Stuart building again in Las Vegas
Las Vegas’ real estate bubble took developers on a wild ride, something Jim Stuart knows all too well. (Las Vegas Review-Journal)
Salon opens at Veterans Village
T.H.E. Salon, owned by Nicole Christie, celebrated their opening at the Veterans Village with a ribbon cutting ceremony.
Southwest Airlines considering Las Vegas-Hawaii flights
Southwest Airlines CEO Gary Kelly says the airline is "very focused" on Hawaii. Hawaiians have a strong presence in Las Vegas.The city’s unofficial status is “Hawaii’s ninth island.” In 2018, at least 2,958 people from Hawaii moved to Nevada. Of those, 88.7 percent moved into Clark County, according to driver license surrender data. According to the Las Vegas Convention and Visitors Authority, 310,249 people came to Las Vegas from Hawaii in 2018.
Fewer Nevadans are celebrating Valentine's Day
Fewer Nevadans are celebrating Valentine's Day. About 1.2 million Nevadans are expected to celebrate this year, a 5 percent drop from 2018. A growing number of people consider Valentine’s Day over-commercialized. Others weren’t interested in the holiday or had nobody to celebrate with. But spending is expected to rise. Those who do celebrate are buying for more people. The average American is expected to spend about $162 this year for Valentine’s Day, a 57 percent jump from a decade prior. Katherine Cullen, director of industry and consumer insights at NRF
Foreclosures of mansions in Las Vegas
Las Vegas was ground zero for America's foreclosure crisis after the housing bubble burst. (Eli Segall/Las Vegas Review-Journal)
Rick Helfenbein talks about the impact of tariffs on the clothing industry
MAGIC fashion convention showcases men's clothing trends
The MAGIC fashion convention has come to Las Vegas at the Mandalay Bay Convention Center to showcase some of the hottest clothing trends for men. (Nathan Asselin/Las Vegas Review-Journal)
Allegiant Air flight attendants learn how to handle a water landing
Field instructor Ashleigh Markel talks about training prospective flight attendants for Allegiant Air getting live training with a raft for a water landing at the Heritage Park Aquatic Complex in Henderson on Monday. (John Hornberg/Las Vegas Review-Journal)
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery talks about Las Vegas return
Michael Feighery, CEO of Smith & Wollensky Restaurant Group, discusses the restaurant's upcoming return to the Las Vegas Strip.
Apartments to Come to Hughes Center
Developer Eric Cohen discusses his current building project at the Hughes Center office park in Las Vegas, Thursday, Jan. 31, 2019. Caroline Brehman/Las Vegas Review-Journal
Stratosphere to rebrand to The STRAT
The Stratosphere, a 1,150-foot-tall property in Las Vegas will be renamed The STRAT Hotel, Casino and Skypod.
Local designers’ picks for the Las Vegas Market
The trends that local interior designers are noticing at the Las Vegas Market this year. (Rachel Aston/Las Vegas Review-Journal)
Trends in bath products at Las Vegas Market
Camille Herd, the showroom manager for European Bath Kitchen Tile & Stone, talks about the popularity of free-standing bath tubs. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Kitchen trends at Las Vegas Winter Market
Las Vegas Winter Market displayed kitchen trends that mirror common dining accessories at Strip eateries. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Emerging trends in gifts at Las Vegas Market
Julie Smith Vincenti, curator for the First Look showroom tour on gifts and lifestyle, talks about the emerging trends in those categories for this season. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Las Vegas house prices are rising
Southern Nevada home prices were up 12 percent year-over-year in November.
Caesars Republic Scottsdale
Caesars Entertainment Corp. is building its first non-gaming hotel in the United States in Scottsdale, Arizona. (Caesars Entertainment Corp.)
Interior designer Mikel Welch talks about trends for Las Vegas Market
Interior designer Mikel Welch, who also is the on-camera designer for TLC’s Trading Spaces, discusses the trends he sees for the 2019 Las Vegas Winter Market. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
SHOT Show 2019: MEGGITT Virtual Training
MEGGIT showcases its virtual training system at SHOT Show 2019 in Las Vegas.
MGM delivers 700 meals to TSA workers at McCarran
Chefs at Garde Manger at Mandalay Bay provided 700 meals to federal employees who are affected by the government shutdown. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
SHOT Show 2019: A "nonsemi-automatic” weapon
Brandon Dunham of Nevada-based Franklin Armory show off the company’s new rifle prototype it calls a “nonsemi-automatic” weapon. The gun does not use a gas system to fire.
Las Vegas-based concrete repair company knows how to beat the heat
ART Concrete Solutions, a Las Vegas concrete-repair firm, addresses the challenges of construction in the extreme heat and sun of Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas based company brings color to concrete in the desert heat
Semco Modern Seamless Surface, a Las Vegas surface engineering company, knows how to put color in concrete construction in the Vegas heat. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
ad-high_impact_4
TOP NEWS
News Headlines
Home Front Page Footer Listing