1 / 26

Biography for William Swan

Biography for William Swan.

foy
Download Presentation

Biography for William Swan

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Biography for William Swan Chief Economist, Seabury-Airline Planning Group. Visiting Professor, Cranfield University. Retired Chief Economist for Boeing Commercial Aircraft 1996-2005 Previous to Boeing, worked at American Airlines in Operations Research and Strategic Planning and United Airlines in Research and Development. Areas of work included Yield Management, Fleet Planning, Aircraft Routing, and Crew Scheduling. Also worked for Hull Trading, a major market maker in stock index options, and on the staff at MIT’s Flight Transportation Lab. Education: Master’s, Engineer’s Degree, and Ph. D. at MIT. Bachelor of Science in Aeronautical Engineering at Princeton. Likes dogs and dark beer. (bill.swan@cyberswans.com) • Scott Adams

  2. 5 Surprises & OneWish • Consolidation is a myth • Airlines a Birth-and-Death process • Hubs are here to stay • Heaven or Hell? connect in FRA first • Bigger is not better • No trend, no reason driving to bigger planes • Smaller is better • Quieter and maybe Cheaper • Fares declining gracefully • Yields plunge, Fares decline • Trust the trends • But make a Forecast

  3. Consolidation is a myth • Venerable Heritage Carriers Dying • 40% of 1981 airlines gone in 2001 • Vital Start-up Carriers Rising • 30% of current ASKs on new airlines • Lots of new Routes • 40% of growth is added airport pairs • Diverted Travel off Old Routes • Secondary hubs bypassing Gateway hubs

  4. Increasing Regional Competition

  5. Rising Competition in Long-Haul Flows

  6. Hubs are Here to Stay • Half of air travel is connecting • Long-haul often more than once • Growth is higher is small markets • Stimulated by direct and cheaper service • Small markets pay premium fares • Covering cost of connecting services • Evolution of Networks: • Gateway hubs • Regional hubs • Rolling hubs?

  7. Half of Travel is in Connecting Markets

  8. Fares Higher in Small Markets

  9. Three Kinds of Hubs • International hubs driven by long-haul • Gateway cities • Many European hubs: CDG, LHR, AMS, FRA • Some evolving interior hubs, such as Chicago • Typically one bank of connections per day • Regional hubs connecting smaller cities • Most US hubs, with at least 3 banks per day • Some European hubs, with 1 or 2 banks per day • High-Density hubs without banking • Continuous connections from continuous arrivals and departures • American Airlines at Chicago and Dallas • Southwest at many of its focus cities

  10. Hub Concepts • Hub city should be a major regional center • Connect-only hubs have not succeeded • Early hubs are centers of regional commerce • Early Gateway Hubs get Bypassed • Early International hubs form at coastlines • Interior hubs have regional cities on 2 sides • Later hubs duplicate & compete with early hubs • Many of the same cities served • Which medium cities become hubs is arbitrary • Often better-run airport or airline determines success • Also the hub that starts first stays ahead

  11. Bigger is not better • Trend is no growth in airplane size • Big markets do not mean big airplanes • Markets with big airplanes do not stay big • New markets do not use small airplanes • Bigger airports do not use bigger airplanes

  12. Forecasters in 1990 Were Confused

  13. Seat Count is -4% of World ASK Growth Smaller Airplanes - 4% Longer Ranges 13% New Markets 41% Added Frequency 50%

  14. Largest Routes are Not Growingas bypass flying diverts traffic

  15. Big Routes Do Not Mean Big Airplanes All Airport Pairs under 5000km and over 1000 seats/day

  16. Big Aircraft Markets Do Not Stay Big

  17. Small Airplanes Not in New Markets

  18. Big Airports Do Not Mean Big Airplanes Top 12 Airports in 12 World Regions

  19. Congestion is Not Driving 747 Shares UP

  20. Smaller is better • Small Airplanes are Quieter • Big Airplanes turn Slower

  21. Noise Per Seat Lowest for Small Airplanes

  22. Big Planes Turn Slower Define S = airplane seat count, as provided by airline and airplane type D = the distance in kilometers of the flight segment preceding the turn T = the turn time, in minutes Then T = 24 + 0.115 · S + 0.0088 · D Results from regression of same-flight number through flight ground times This says that turn times are equal to 24 minutes, plus 11.5 minutes for every 100 airplane seats, and 9 minutes for each 1000 km of average stage length. This means a 100-seat airplane with a 1000-km inbound flight turns in 44 minutes. A 200-seat airplane on the same route would seem to need 56 minutes, and a 400-seat airplane would require 79 minutes. A 4000-km transcon would require almost half an hour more time.

  23. Fares are declining gracefully • Yields ($/km) plummet at 2-3% a year • Discount fares declining 1%+ per year • Unrestricted fares flat with inflation • Discount mix increasing • Stimulation with fare declines • More leisure demand • Long Haul share increasing • With lower “yields”

  24. Cost Reductions Keep Coming

  25. One Wish • Atrend is a projection of past growth • Lots of “forecasts” are trend projections • Look at the trends • A forecast includes reasons why • When reasons change, forecast changes • Do not change trend without reason why • The future includes acts of will • For example, some hubs are made, not born • If you build it, they might come

  26. William Swan: Data Troll Story Teller Economist

More Related