Plane Conversations

A strong Commercial Aviation Industry portends a strong private aviation industry.  This article features data from Honeywell Business jet forecast which correlates with the FAA forecast for 2011 through 2031 for commercial aviation.

Social Flights was launched at precisely the right time with up-to-the-minute social technology tools and business methods for aggregating large fleets of private aircraft and building out public charter routes that can meet customer needs.

According to Honeywell Aerospace’s Annual Business Outlook, business aviation is poised for recovery beginning in 2012.  The Honeywell forecast is based on surveys of more than 1,500 flight departments around the world.

The World According to FAA.gov

The carriers have stopped less profitable routes, retired older aircraft, and unbundled services while initiating new services that passengers were willing to pay for such as WiFi.  There is optimism in the industry that the next decade will show sustaining profits as the industry continues to grow in the long term.

The 2011 FAA forecast now calls for one billion passengers to be flown in 2021, two years earlier than projected in last year’s forecast.  Growth over the next five years will average 3.7 percent per year, with average annual growth of 2.5 percent per year for the remainder of the forecast period.  The level of activity and demand is expected to eclipse those published in last year’s FAA forecast. 

Some of the reasons include stronger than expected traffic and higher expectations of economic recovery.  As such, available seat miles (the benchmark for industry capacity) is expected to increase globally by 4.5% next year after years remaining flat or decreasing.  The global market is expected to increase at 3.1% through 2031.

In the domestic market, capacity grew 2.9 percent in 2011 and is expected to grow to 3.0% in the long term.  For the regional carriers, the domestic capacity will increase at 3.8% over 2010 rates.

The average size of domestic aircraft is expected to increase to 122.0 seats from just over 121.7 seats currently. The demand for 70-90 seat aircraft will continue to grow.  The FAA expects the number of 50 seat aircraft to fall (and many will become available for lease or purchase).  The average regional jet size will increase to 54.6 seats while the average length of the trip will increase.

The profitability of all air carriers will depend on stable fuel prices, increase in demand for business travelers, and the willingness of travelers to continue to accept higher prices for less services.  In order to keep costs low, the carriers will need to better match their routes, aircraft capacity, and their markets (supply and demand).  they will need to ground older aircraft, drop low margin routes, and pressure regional carriers to accept lower fees.

 This is where social flights comes in:

All this is bad news for 6-60 passenger scheduled service. However, Social Flights can effectively join these two forecasts by providing public charter services across industries.  The weakness of one mode can be hedged by the strength of the other, and vice versa.  This makes for an excellent investment opportunity in social organization methods for air transportation pioneered by Social Flights.

There is an entire segment where Social Flights can capture market share that commercial carriers would willingly cede to Social Flights in order to keep THEIR own costs low.