Houston becoming an "Emerging Global Portal"Michael Boyd is an aviation expert and consultant who is frequently quoted in articles on the airline industry. He posted today on emerging trends from his recent Boyd Group Aviation Forecast Conference:
International-generated traffic is now the #1 most important sector for airlines.Not sure how Detroit got on that list, given that they have minimal nonstop international service to Asia, Europe, or Latin America. But Houston definitely has tremendous potential here. If you use a string on a globe to find the shortest "great circle" route from the Asian Pacific Rim to Central America and the most populated parts of South America, you'll find it goes right through Houston. I've heard before that there is actually a reasonable amount of traffic that connects through from Continential's Tokyo flight on to Latin America. Asian trade with Latin America is increasing dramatically as they supply China and other countries with much-needed food and raw materials.
The Emerging Global Portal. Because of growing intra-regional traffic flows, particularly between Asia and Latin American, certain US points have potential to become "international" connecting hubs, or Global Portals. These will inter-connect traffic from points just as do domestic hubs, but will do so between points in each region which by themselves cannot support nonstops.
The net result will be enormous economic growth for the cities where the Global Portals are located. This is because, just as domestic hubsites are over-served by virtue of the inter-connecting traffic support, the Global Portal will have far more international service access, supported by the feed traffic going through the hubsite. Potential Global Portals: AA/DFW, NW/DTW, CO/IAH, and DL/ATL. These will also enhance the value of alliances, both domestic and international.
This will be key to Houston supporting nonstop flights to China, since, geographically, we are badly positioned to feed domestic traffic there. Now that Continental has been awarded slots to both Beijing and Shanghai from Newark, we have to hope that they will apply for future slots from Houston.
Competition will be stiff. American is at a bit of a disadvantage with DFW, because most of their Latin America flights are concentrated out of Miami, and there also seems to be some issue in their pilot contract which prevents flights to China because they're too long. But Delta is growing strongly out of Atlanta, not only to Europe and Latin America, but they were also recently awarded a China slot starting next year - and they already have flights to Tokyo and Seoul. We have the natural advantage with more regional ties, more Latin American flights, and the port, but they're a bigger hub with more total flights and destinations, and certainly have the potential to beat us to "global portal" status if we don't move aggressively.
Are you listening, Continental? Maybe time to order some more 787s?...