Letters to Media

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NBAA Letter to Stanford Transportation Group (STG)

June 19, 2008

From: Hubbard, Dan
Sent: Thursday, June 19, 2008
Subject: Follow up to our call....

Dear Mr. Bernstein,

As a follow-up to our conversation earlier today, I'd like to renew my request for a copy of the study referenced in a press release issued earlier this week by your organization, concerning supposed trends among commercial airline and general aviation passengers. If, as you seemed to imply during our phone call, you based your press release more on spreadsheets and other data rather than a traditional “study,” please provide those materials instead.   

We are anxious to see your supporting data because many of the items in your press release run contrary to other published studies on the subject and are at odds with our understanding of business aviation and trends affecting first-class airline travel.  

For instance, your press release makes no mention of the well-known factors that are clearly impacting first-class travel in the United States, including:

-The airlines' replacement of large jets on many routes with regional jets or discount subsidiaries (e.g. United’s Ted) that do not have first-class sections. Without a first-class cabin, the option of purchasing a first-class ticket becomes unavailable. These passengers aren't necessarily switching to business aviation; they're simply not holding a ticket for first class, because the big airlines are no longer making it available on many routes.   

-The rise of the discount carriers like Southwest and JetBlue which also do not offer first-class cabins.

-The increasing influence of loyalty programs, designed by the airlines themselves, which promote alternative purchasing decisions for first-class travel. As you know, competition among airline loyalty programs has led the carriers to offer large companies and individual consumers the opportunity to purchase a regular ticket, then receive an upgrade to first class at no little or no cost. Your sample only counts first-class passengers as those who purchase first-class tickets in the traditional manner, when most companies in the United States are sophisticated enough with loyalty programs or discount programs to arrange for their employees to upgrade into first class on coach tickets.   

-The increasing use of technology to reduce travel requirements. Your press release overlooks alternate options to first-class airline travel that consumers are certainly taking advantage of, especially in these challenging economic times. These include, but aren’t limited to, teleconferencing, video conferencing and online communications. In other words, some consumers who are no longer flying first class may not be flying at all.  

In addition to the failure of your press release to articulate the factors mentioned above, we feel your release also fails to accurately address business aviation realities. For example:

-The true measure of business aviation activity in the United States is the annual number hours flown, not the number of airplanes parked at airports around the country. In our phone call, you indicated that the data provided in your press release was based in part on the size of the business aviation fleet. This is not a good measuring tool because not all airplanes fly the same number of hours per year. In general aviation, the older a plane becomes the fewer hours it flies. Government data show that hours of business aviation flight have been relatively steady in recent years. In fact, because of passenger demand, it’s the airlines’ hub-to-hub flights that have dramatically increased.   

-The use of NBAA data without verification or approval. NBAA long ago discontinued using or promoting the old “NBAA data” cited in your press release because of problems discovered in the methodologies used to develop that data. It’s unfortunate that we were not contacted to approve your use of the old data, because we would have told you about the inaccuracies therein.    

Along with these concerns, we note that your press release fails to mention other independent studies, which provide a vastly different assessment of trends regarding airline and business aviation travel. For example, a study by Charles River Associates shows that the marginal loss of the airlines’ first-class ticket sales is attributable a number of factors, some driven by the airlines themselves. However, to date, we have seen no evidence, other than the claims made in your press release, that business aviation has any relation to airline passenger trends.

Lastly, while I understand your claim, made in our conversation, that your press release wasn’t meant to imply a direct, causal relationship between first-class airline and business aviation travel, that seems to be the conclusion many are drawing from it. Equally troubling, our conversation led me to believe that in promoting your press release, none of the factors cited above was discussed with members of the news media, or anyone else who might have inquired with you for more detail.

As I stated before, we at NBAA would like to review all of your research in regard to these matters. Although I am concerned that my request for a copy of the full study your release references, or any underlying data that supports it, was met with a tepid response, I am hopeful that you will provide the relevant information promptly.

Thank you.

---dan

Dan Hubbard
Vice President, Communications
National Business Aviation Association
1200 18th Street, NW
Suite 400
Washington, DC 20036
202.783.9360-w
202.431.5970-m