Moving pieces. Third Quarter U.S. GDP growth was revised down to 4.9% from November’s 5.2% second estimate. The National Association for Business Economics is expecting 2024 GDP growth to slow to 1% with a recession risk in the next 12 months under 50%. As inflation slows and with a “soft landing” in sight, the Fed […]
Rail traffic volumes remain challenged while Air Carriers face capacity constraints as they attempt to meet the rebound in domestic and international flights. United reported solid domestic and record-breaking international performance with third-quarter revenues up 12.5% year over year. The company set a record for the highest-ever daily average of revenue passengers carried in a quarter […]
Equipment and crew availability affect service levels for both Aero and Rail. Both Rail shippers and the flying public are interested in consistent, reliable service. Rail transit times from pick-up to the last mile are particularly important. The Surface Transportation Board (“STB”), responding to Shipper Rail service complaints, issued a Notice of Proposed Rulemaking (Ex Pate No. […]
Most Aircraft operating leases provide that the lessee is responsible for maintaining leased aircraft to required industry standards. To ensure flight safety the FAA issues Airworthiness Directives (ADs) and aircraft manufacturers issue Service Bulletins (SBs). ADs are legally enforceable regulations meant to correct unsafe conditions. Airframes, engines, avionics, and other aircraft components (landing gear, auxiliary […]
Pent up demand from pandemic lockdowns. Government stimulus ($5 Trillion). The Fed’s past abnormally low interest rate policy. These are the causes of the current distortions in economic activity. U.S. annual Core consumer price inflation remains high, 5.3%[1]. Wage growth continues. American Airlines pilots agreed to a new contract that boosts pay by 21% in […]
Locomotives, typically classified as 50-year assets, are primarily electrically driven. Despite the common label as ‘diesels,’ they are better described as ‘hybrid-electric’ vehicles. This is because their diesel engine powers an alternator which generates the electricity required to operate the electric traction motors mounted on the locomotive’s axles. As reported by the American Association of […]
Weight and balance limits of aircraft are crucial for ensuring flight safety. Incorrect weight distribution significantly impacts flight performance, and neglecting or performing incorrect preflight calculations can have fatal consequences. From 2008 to 2016, approximately 136 general aviation accidents were likely caused by pilots failing to complete or conduct preflight performance calculations for weight and […]
On March 23rd, 2023, the Federal Reserve voted unanimously1 to raise the interest rate paid on reserve balances by a quarter of a percentage point to 4.9%, marking the highest level since 2007. Although the federal funds rate range of 4.75% to 5% is above the Federal Reserve’s 2% target inflation rate, the annual inflation […]
After increasing 3.2% in the third quarter year, the U.S. economy grew at a 2.9% annual rate in last year’s fourth quarter. The Federal Reserve’s preferred price index slowed to 3.2%. Inflation appears to be cooling, but labor, and supply chain challenges remain. Higher interest rates are impacting demand in manufacturing and services. The labor […]
The International Air Travel Association expects the global aero industry to earn a $4.7 billion profit in 2023. U.S. and major European air carriers are better off than Asian (particularly China) carriers. Coming out of the pandemic, pent up air travel demand increased domestic load factors. Equipment and labor became operational challenges. As capital costs […]
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Growing Aero and Rail InvestmentsMarch 19, 2025 - 8:09 amBoeing delivered 45 jets in January[1]. That’s 19 more than Airbus’ January deliveries. COMAC and Embraer each delivered three aircraft in January 2025. Airbus plans to deliver 820 commercial aircraft in 2025, 7% more than in 2024 (Boeing delivered 348 in 2024). Boeing’s 737 deliveries remain capped at 38 aircraft per month. The newly appointed […]
2025 Core Themes for Aero and Rail InvestmentFebruary 5, 2025 - 9:27 pmStrong GDP growth, sticky inflation, and a soft landing–core themes for aero and rail investment. The economy’s performance in 2025 will drive the Fed’s future interest rate decisions. Higher ticket revenues and lower energy prices (jet fuel is expected to be less expensive in 2025) will benefit air carriers. The International Air Transport Association estimates the […]
Looking Forward to 2025 Aero and Rail InvestmentJanuary 7, 2025 - 7:37 pmNovember’s jobs report exceeded expectations (payrolls increased by 227,000[1]) yet the Fed lowered its benchmark interest rate December 18th by a quarter of a percentage point (to between 4.25% and 4.5%). Fed Chairman Powell’s recap: “I think we’re in a good place, but I think from here it’s a new phase and we’re going to […]