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Israel is once again warning that it may have no choice but to preemptively attack Iran’s nuclear facilities to prevent Tehran from developing nuclear weapons. And its air force is becoming more capable of executing such a challenging mission than ever before.

In late April, Israeli Intelligence Minister Eli Cohen warned that a “bad” nuclear deal between the United States and Iran “will send the region spiraling into war.”

“Anyone seeking short-term benefits should be mindful of the longer-term,” he said. “Israel will not allow Iran to attain nuclear arms. Iran has no immunity anywhere. Our planes can reach everywhere in the Middle East – and certainly Iran.” 

In the mid to late 1990s, successive Israeli governments, both Labor and Likud, expressed concerns about Iran’s nuclear program as well as its then fledgling ballistic missile program which it was developing with North Korean assistance. The prospect of a preemptive strike by the Israeli Air Force (IAF) first came up at that time.

In 1981, the IAF attacked Iraq’s Osirak reactor. In 2007, it also destroyed a Syrian nuclear reactor. In both those cases, however, the strikes targeted a single facility. Iran’s nuclear program consists of several facilities spread across the country which are much more adequately protected than either the Iraqi or Syrian facilities were. They are also much further away from Israel.

In 2005, when asked how far Israel was prepared to go to stop Iran from developing nuclear weapons, the then Chief of Staff of the Israel Defense Forces Dan Halutz responded literally: “Two thousand kilometers.” That is approximately 1,200 miles, roughly the distance IAF jets would have to fly to attack Iran’s main nuclear sites.

In 2008 over 100 IAF F-15s and F-16s flew 900 miles across the Mediterranean with tanker aircraft in a clear demonstration of their capability to reach Iran.

Two notable things have changed since that time: Israel acquired a fleet of stealthy fifth-generation F-35 Lightning II jet fighters, many of them unique F-35I ‘Adir’ variants built to incorporate Israeli-built systems, and Iran greatly improved its aged air defenses. 

Iran’s air defenses were so antiquated in the mid-2000s that they had trouble even detecting, never mind tracking and targeting, various aircraft operating inside Iranian airspace.

“The country’s radar network was in such a poor condition that it proved incapable of tracking most of the U.S., Israeli and allied unmanned aerial vehicles that frequently made forays deep inside Iranian air space,” wrote military aviation expert Tom Cooper. “Similarly, USAF tankers supporting combat operations over Afghanistan and Iraq sometimes spent up to two hours inside Iranian airspace – without ever being detected.”

Since then, Tehran has acquired highly formidable high-altitude S-300 air defense missiles from Russia and developed several similar systems of its own that could pose a significant challenge to any IAF strike using F-15s or F-16s. Consequently, Israel may well have to rely heavily on its radar-evading F-35s.

In 2019, Israeli Prime Minister Benjamin Netanyahu declared that Israel’s F-35s “can reach any place in the Middle East, including Iran, and of course also Syria.” 

However, the F-35’s approximate range is 650 miles when armed, which is insufficient for a round trip from Israel to Iran’s nuclear sites.

Therefore, these fighters would need to be accompanied by tanker aircraft for mid-air refueling, especially if they are operating from Israeli airbases rather than from another country much closer to Iran. Use of non-stealthy tankers could reduce the element of surprise, a crucial element for the success of any Israeli first strike. 

Israel is already addressing this problem by developing external fuel tanks that will almost double the combat radius of its F-35s, making them capable of longer-range missions. 

It already has a lot of experience modifying its fighters in such ways. After all, Israel turned its F-15s into highly-capable bombers long before the U.S. – which originally used the jets solely as an air-to-air fighters in strict adherence to the mantra “not a pound for air-to-ground” – developed the Strike Eagle. 

The fuel tanks Israel is presently building for its F-35s are most likely conformal. Such external tanks are designed in a way that won’t seriously undermine the fighter’s critical stealth capabilities, which regular drop tanks undoubtedly would. 

F-35Is outfitted with conformal fuel tanks would ultimately require fewer aircraft, and no tankers, for a strike mission against Iran’s nuclear facilities. That could prove highly advantageous for the attacking IAF jets since it would reduce the likelihood of Iranian radars detecting them early in their mission.


As a result, in the near future, Israel will be more capable than ever of carrying out its frequently repeated threat of preemptively attacking Iran’s nuclear program if it believes Tehran is on the verge of developing nuclear weapons.

The Boeing

BA
Company today issued the first assessment of workforce diversity in its 105-year history, presenting a mixed picture of inclusiveness that senior management says is roughly on par with the rest of the aerospace industry.

The research, which was begun early last year, found that 22.9% of the company’s workforce are women, including nearly one in three (31.8%) executives and over one in five (22.2%) managers.

With regard to racial and ethnic diversity, the report found that Asian Americans are significantly more represented in the Boeing workforce than in the general population (14.2% versus 5.4%). Likewise, they are statistically over-represented among executives (8.3%), managers (7.9%), engineers (17.6%), and production workers (16.6%). Asian Americans are also 13.9% of new hires.

The numbers for African Americans and Latinos were less positive, with Black employees representing 6.4% of the overall workforce and Latino employees 7.0%.

The percentage of African Americans who are executives (6.5%) and managers (6.0%) is consistent with the aggregate for the overall workforce, but that number falls to 4.4% for engineers and rises to 7.6% for production/maintenance workers. The percentage of Black executive council members, the top internal management body, is an unusually high 25%. Meanwhile, 8.3% of board members are Black.

Latinos are largely missing from the upper ranks of management—only 4% of executives are Latino—but they are 6.2% of managers, 7.6% of engineers, and 7.2% of production workers. As in the case of Black managers, these percentages significantly trail the share of the general population that is Latino, currently estimated to exceed 17% (Black Americans are 13%).

Some of these findings may reflect where Boeing workers are concentrated in the U.S., home to all major Boeing production and engineering facilities. For instance, 40% of the Boeing workforce is located in Washington State, a state in which African Americans are under-represented and Asian Americans are over-represented relative to the national population.

However, Boeing management is not making excuses. In an email sent to employees, Boeing CEO David Calhoun observed that “we are on a par with the aerospace industry, and we have made advancements in some areas, but we are not where we want to be.”

The company last year put in place an “equity action plan” to raise the presence of under-represented groups in its workforce, and has established a Racial Equity Task Force as an internal think tank to develop inclusion mechanisms.

Calhoun said in his email that Boeing has a zero-tolerance approach to discriminatory behavior. Since June of 2020, Boeing has terminated 65 employees and taken corrective action against 53 others for behavior deemed to be racist or hateful.

The company acknowledges that its assessment of workforce diversity is incomplete, and plans to expand efforts at inclusion in the future. Boeing’s chief human resources officer, Michael D’Ambrose, told me Thursday that he views the first report as “putting a stake in the ground, from which we can improve.” The numbers are important, but D’Ambrose says the real goal is to change Boeing’s culture because the research on how diversity and inclusion can improve a company’s performance is “compelling.”

One area where Boeing wants to do better is in tracking the progress of LGBTQ+ employees within the company. It expects to generate metrics on that facet of the workforce in future reports. Some companies in aerospace, most notably Raytheon, have been recognized for their welcoming approach to LGBTQ+ employees.

Raising the presence of historically disadvantaged racial or ethnic groups may be more of a challenge. As an initial step, management has set a goal of increasing the representation of African Americans within Boeing by 20%. Today’s report lists over a dozen initiatives aimed at promoting diversity, all of them seemingly tied to D’Ambrose’s emphasis on cultural change.

The fact that Boeing pursued its diversity assessment in the midst of one of the worst years in the company’s history presumably reflects the priority it assigns to becoming more inclusive. Like the rest of America, Boeing is waking up to ways in which it can better tap under-utilized talent in the nation’s population.

The U.S. Navy has destroyed a surface target with a swarm of drones for the first time. The strike, disclosed in a briefing on April 26th, was carried out during the Unmanned Systems Integrated Battle Problem (UxS IBP) 21 exercise conducted off the coast of California.

The swarm attack was one of unmanned systems operations during the exercise. These included a combination of unmanned aircraft and boats identifying a surface target so it could be engaged with an SM-6 anti-ship missile from the guided-missile destroyer USS John Finn.

“Our goal for this exercise is to evaluate these unmanned systems and how they can actually team with manned systems,” Rear Adm. Jim Aiken, technical manager for the exercise told a press briefing.

While many of the other unmanned systems have been described in some detail, officials remain vague about the swarm involved. It had previously been disclosed that the exercise would include an element from the Navy’s Super Swarm project. This is exploring how massive swarms – which may include drones, unmanned submarines, and unmanned surface vessels – can co-ordinate their attacks against ships for greatest effects. And also how the Navy can defend against them. The Navy researchers have declined to discuss this work.

We do not know the size, type or numbers of drones involved in the swarm. However, much of the Navy’s previous work on attack swarms has involved Raytheon’s Coyote, a 13-pound tube-launched drone with five-foot pop-out wings which now comes with swarming capability as standard. Coyote can carry various payloads including electronic warfare devices or an explosive warhead. The Navy’s LOCUST program – a contrived acronym for Low-Cost UAV Swarming Technology – has previously demonstrated swarms of up to 50 coyotes coordinating their attack.

The idea with this type of swarm is to overwhelm defenses by hitting them with more attackers than they can deal with. Low cost is a key feature; the idea of LOCUST is that the entire swarm will cost less than a conventional missile. The small warheads can knock out radar and other vital systems, leaving the target open to attack by larger weapons. (A swarm may also be able to do more serious damage with multiple precise strikes on vulnerable points).

The swarm has another advantage over conventional missiles: a swarm of 50 drones can attack 50 small targets, such as fast attack craft or unmanned surface vessels.

The report fails to disclose how the swarm was launched. LOCUST was originally designed to be launched from surface vessels, but the Navy is also developing submarine-launched swarms.

The swarm may have come from aircraft. In 2020, the Navy revealed that Super Swarm testing included the launch of a record-breaking 1,000 CICADA drones from a C-130. CICADA – another contrived acronym, standing for Close-in Covert Autonomous Disposable Aircraft – is a miniature glider with a six-inch wingspan carrying an electronic warfare payload or delivering a ground sensor to a particular spot. CICADA has participated in various Navy experimental programs over the last 15 years and is a useful surrogate for more expensive craft.

The target of this type of exercise is clear. China is developing so-called anti-access/area denial defenses – layered missiles and radar to keep American aircraft and warships out of the South China sea. The latest exercise, and the swarm attack in particular, suggest that America is preparing to respond. Unmanned systems allow military actions to be taken without risking sailors’ lives, or with the danger of escalation that comes with human casualties. And unlike a missile, a swarm attack is scalable and can escalate to any level of conflict.

A swarm can simply harass a target by flying around it, irritate more seriously by jamming radio systems and navigation, step it up a gear by knocking out a radio masts or other infrastructure – or deliver a knock-pout blow of sinking a vessel as just demonstrated. Whatever form a conflict takes, swarming weapons will be able to play a role when other weapons are useless. Remember though, that the Chinese have drone swarms too.

Israel has produced a highly formidable air defense missile system and a lethal high-tech loitering munition, both of which are battle-tested and available for export. 


In April, Israel tested the new Extended Range version of its Barak 8 air defense missile system. 

Developed by Israel Aerospace Industries (IAI), the Barak 8 is designed for shooting down aircraft, drones, helicopters, cruise missiles, and even ballistic missiles. 

The earlier Barak interceptor missiles have respective ranges of 35 to 70 kilometers (approximately 20 and 40 miles). The new Barak 8 ER has a much greater range of 150 kilometers (approximately 90 miles). 

In the April live-fire trial, a Barak 8 ER missile successfully intercepted a ballistic target at an altitude of 10 km (roughly six miles). IAI noted that this is “a typical range” of such targets. 

Furthermore, the company added, “The intercepted target was specifically developed for the trial series based on IAI’s system and it represents a true threat.” 

It also said the successful test served as “further proof” of the system’s “advanced capabilities to handle a variety of threats and missions at different ranges.” 

The system is presently available for export and is already in service with India’s air force and navy. IAI has sold approximately $7 billion worth of Barak 8 missiles to foreign countries but has not, as is customary with Israeli arms sales, publicly disclosed who its clients are.

The Barak 8 is believed to have made its combat debut in Azerbaijani service when it reportedly shot down a Russian-built Armenian Iskander ballistic missile during the 2020 Nagorno-Karabakh conflict. 

About a dozen land and sea-based Barak 8 interceptors could enable a country to adequately protect installations and areas of civil, economic, or military importance at land and sea from a variety of aerial threats.

Israel itself is outfitting its new Sa’ar 6 corvettes with the naval version of the missile, that will greatly enhance its navy’s capability to defend its territorial waters, which may prove increasingly necessary for, among other things, protecting offshore gas rigs from any potential Hezbollah missile strikes in the event of another dangerous war. 


While IAI designed the Barak 8 for defense against various aerial threats, it also designed a formidable weapon system for offensive missions. 

The IAI Harop loitering munition (or “suicide” drone) was primarily designed for Suppression/Destruction of Enemy Air Defense (SEAD/DEAD) missions. It can, however, also be used against an array of other ground targets.

It’s launched into the air from a canister (pictured below), which can be on a truck or even fitted on a warship. The Harop has folding wings. Its relatively small size and low radar cross-section — its radar signature is reportedly the size of a small bird — enable the loitering munition to evade many types of surface-to-air missile systems, especially basic ones designed primarily for tracking and targeting much larger and faster aircraft or cruise missiles.

The Harop can autonomously destroy enemy air defense systems using its anti-radar homing system. Its operator can also use the drone’s powerful cameras to locate and destroy other types of targets. The Harop can even strike moving targets. 

After locating and locking on to a target, the loitering munition initiates its speedy attack run, often descending almost vertically, and self-destructs on impact. Azerbaijan used them to successfully knock out at least six of Armenia’s formidable high-altitude Russian-built S-300 air defense missile systems during last year’s conflict.

If the Harop fails to find any target, it can safely return to base for use in another mission. 

As with the Barak 8, IAI also developed a naval version of the Harop, which it unveiled in 2017. In February 2021, the company announced that it had sold naval Harops along with traditional ground-based versions to an undisclosed country in Asia. 

According to an IAI press release, the naval Harop “gives mission commanders in a fleet of ships the capability to independently and organically collect intelligence, assess targets and strike.” 

“The intelligence gathered by the Harop is directly integrated in the vessel’s control room and allows for quick, accurate and lethal decision-making,” the press release added. “Use of the Harop on naval platforms is an operational alternative and complementary element to using sea-sea missiles, with a wide range of uses and with optimal cost-efficiency for the navy.” 

Military analyst Joseph Trevithick noted that while the Harop’s payload isn’t enough to singlehandedly sink enemy warships, swarms of these loitering munitions “attacking from different vectors could do considerable damage and blind them by knocking out their radars or other sensors.” 

“This could result in a mission kill and make the target vessel vulnerable to other types of attacks or take it offline for a prolonged period of time,” he added. 

Such a scenario is possibly what IAI envisioned when it mentioned the naval Harop’s usefulness as a “complementary element” to ship-to-ship missiles. 


When deployed by the same military, these systems’ respective specialized defensive and offensive capabilities can adequately protect a country’s armed forces and territory from various aerial threats while simultaneously enabling it to strike strategically-important targets deep inside enemy territory. 

Such capabilities, which many countries can now acquire, could, and in some respects already have, change the way many wars, both big and small, are fought and ultimately won in the not-too-distant future.

When Americans think about the contributions of immigrants to the defense of the nation we should recall there was a time when it appeared unlikely America would even be a nation. Alexander Hamilton played an important role in America’s early years and Thomas Paine galvanized public opinion with Common Sense, but Friedrich von Steuben played the most critical military role of any immigrant during America’s fight for independence. In a way, he was America’s first employment-based immigrant.

In 1777, Friedrich von Steuben, a former Prussian officer, met with Benjamin Franklin, the colonies’ ambassador to France, and Franklin’s chief agent in Paris, Silas Deane, and impressed them enough that they, in effect, recruited him to help the Continental Army. While Steuben had served admirably as a Prussian officer, by 1777, he was out of a job and agreed to travel to the colonies, present himself with Franklin’s recommendations to the Continental Congress and, it was hoped, become a paid officer for General Washington.

Franklin and Deane’s introduction to the Continental Congress overstated Steuben’s background. Moreover, Steuben did not possess the money to travel to the colonies. Pierre-Augustin Caron de Beaumarchais, a French playwright and friend of Steuben, gave him a loan.

What Steuben lacked in wealth and status, he made up for with other qualities. Nearing the age of 50, Steuben had amassed experience from many of Europe’s best military minds. “What set Steuben apart from his contemporaries was his schooling under Frederick the Great, Prince Henry and a dozen other general officers,” writes Paul Lockhart, author of The Drillmaster of Valley Forge. “He had learned from the best soldiers in the world how to gather and assess intelligence, how to read and exploit terrain, how to plan marches, camps, battles and entire campaigns. He gleaned more from his 17 years in the Prussian military than most professional soldiers would in a lifetime. In the Seven Years’ War alone, he built up a record of professional education that none of his comrades in the Continental Army—Horatio Gates, Charles Lee, the Baron Johann de Kalb and Lafayette included—could match.”

In December 1777, when Baron Friedrich von Steuben arrived in America, a colonial victory over the strongest empire on the globe looked uncertain. “Since losing a series of battles and being driven from New York the previous summer, Washington and his closest advisers had been uncharacteristically flummoxed by Gen. Sir William Howe, who led the 30,000 strong British expeditionary force in North America,” writes Bob Drury and Tom Clavin, authors of Valley Forge. “Throughout the spring and summer of 1777, Howe had orchestrated a series of feints that forced Washington into exaggerated countermeasures. He had dispatched some companies of his exhausted Continentals from their camp in Morristown, New Jersey, through rainstorms in searing heat as far north as the Hudson Highlands and as far south as the lower Delaware River.”

General George Washington, the commander-in-chief of the Continental Army, chose to winter his troops at Valley Forge. Although the army had achieved surprising victories at Trenton and Princeton, the British occupied Philadelphia and Washington had yet to decide how next to deploy the Continental Army. In fact, the larger problem remained the state of the Army itself.

Steuben found the Continental Army at Valley Forge in bad shape. “What [Steuben] discovered was nothing less than appalling,” according to Thomas Fleming, author of Washington’s Secret War: The Hidden History of Valley Forge. “He was confronting a wrecked army.” How wrecked? “The baron found soldiers without uniforms, rusted muskets without bayonets, companies with men missing and unaccounted for,” writes Erick Trickey for the Smithsonian. “Different officers used different military drill manuals, leading to chaos when their units tried to work together. If the army had to fight on short notice, von Steuben warned Washington, he might find himself commanding one-third of the men he thought he had. The army had to get into better shape before fighting resumed in the spring.”

Steuben grasped the key problems the army needed to overcome if it was to have a chance to defeat the well-trained and more experienced British Army. “Without ever having seen them fight, Steuben intuited that the resiliency the Americans had exhibited to this point in the war was offset by their professional limitations,” writes Drury and Clavin. “At less than three years old, the Continental Army lacked an institutional memory; its soldiers were no more adept at fighting a practiced, dedicated foe than its commissary officers were at feeding and clothing them. What few drills the army practiced were a mélange of the whims of individual state commanders whose influences, such as they were, ranged from bits of French, English and Prussian field guides to homegrown backwoods fighting techniques.”

Steuben understood his role could decide the outcome of the war. “It was only the Americans’ spirited tenacity that had prevented them from being completely swept away by polished British and Hessian soldiers at Brandywine and Germantown,” according to Drury and Clavin. “Such hardiness had been responsible for the surprise victories in Boston and at Trenton and Princeton. But Steuben knew that the Continentals’ tendency to expose the flanks of their long files of Indian style marching columns, for instance, or their inability to form swiftly into disciplined lines of fire, would ultimately lead to catastrophe.”

Steuben decided he needed to instruct the troops in drilling to instill discipline and professionalism in both soldiers and officers. He chose to “train” the trainers, teaching a twenty-man squad that could then be used to instruct other troops. He started with the proper standing position and moved to “dressing their ranks” or proper alignment, then the marching step. “The speed of the marching was entirely new to the soldiers . . . Finally, the men were taught how to face 90 degrees to the right, 90 degrees to the left, and to face to the rear, which must always be done by spinning 180 degrees clockwise on both heels,” writes Lockhart.

Baron von Steuben demonstrated drilling himself and punctuated his instruction with entertaining profanity in French or German, translated to the troops. He oversaw the drilling and showed unique insight into the character of the American troops, notes Lockhart. He understood American soldiers where not like European soldiers who were mostly peasants and naturally deferential, ready to obey those with higher social rank. “The genius of this nation is not to be compared . . . with that of the Prussians, Austrians or French,” Steuben wrote to a Prussian friend following the war. “You say to your soldier, ‘Do this,’ and he does it; but I am obliged to say, ‘This is the reason why you ought to do that,’ and then he does it.”

George Washington recorded favorable first impressions of Steuben but it was the former Prussian officer’s results that most gained Washington’s confidence. “Washington had ordered the cessation of all drilling not overseen by Steuben or his subinspectors,” according to Drury and Clavin. And this confidence in Steuben extended beyond drilling. “So meticulous was Steuben’s process, so indefatigable his diligence, and so burgeoning his influence that Washington was soon issuing a series of general orders suitable for, and nearly indistinguishable from, the Prussian army’s boot camp directives.”

The change was remarkable. “They went from a ragtag collection of militias to a professional force,” according to historian Larrie Ferreiro. “[It was] Steuben’s ability to bring this army the kind of training and understanding of tactics that made them able to stand toe to toe with the British.”

In addition to preparing the Continental Army to defeat the British army and win independence, Steuben made two other important contributions to America. First, he wrote the field guide for the army. “[That] spring the resulting Regulations for the Order and Discipline of the Troops of the United States would be circulated among general Smallwood’s troops in Delaware as well as Continental regiments in New Jersey,” writes Lockhart. “The work eventually constituted the United States Army’s primary field guide for decades and its unique rationale—that European military methods could be integrated into a thoroughly independent-minded Army—may be Steuben’s greatest gift to his adopted country.”

Steuben also contributed as a leader on the battlefield. He undertook the defense of Virginia and was at Yorktown for the final victory over the British. “Steuben’s division was still in the trenches two days later, on the nineteenth, the day designated for the surrender ceremony,” according to Lockhart. “The Baron planted the American flag on one of the captured British redoubts with his own hands. A small satisfaction, perhaps, but satisfaction nonetheless. After he had done so much to make this day possible – both by training the victorious army and by holding Virginia until Lafayette could take his place – Steuben no doubt felt that he deserved the honor.”

Steuben made two critical recommendations that became another contribution to his adopted country. First, he formulated plans for a small professional army that could be supplemented by reserves. Such an army could act as a deterrent to European powers. “His notion of a small peacetime army, supplemented in times of war with a national militia, would . . . serve as the underlying foundation of the American military establishment for many decades to come,” writes Lockhart.

Second, he recommended a military academy and suggested a curriculum. “West Point, and indeed all of the American service academies are products of the Baron’s agile mind,” according to Lockhart. “Above all other contributions tower the concepts of discipline and professionalism in the army as a whole and in the officer corps in particular.”

“The Baron de Steuben’s is the classic ‘coming to America’ story writ large,” writes Paul Lockhart. “Like so many immigrants before and since, he cut himself loose from the Old World and journeyed to the new intending to reinvent himself. He did just that.” Friedrich von Steuben may have been America’s first employment-based immigrant, and, like many immigrants, his achievements benefited America.

While airlines aren’t out of the woods yet, the recent uptick in booking volumes are a welcome sign for the industry. So, as airlines emerge from this “holding pattern” of hyper-focus on cash conservation and survival, some interesting and potentially long-lasting dynamics are developing. One of those is airlines’ approach to the business travel segment, and how they are adjusting their strategy in response to its recovery.

Leisure gaining more mindshare from airlines

Pre-pandemic, market share growth in the business segment – given its high yield, relative inelasticity and very loyal nature – was front and center for most large US carriers. While we’re seeing some positive signs of its rebound, resurgence of business travel will likely be gradual. On the other hand, the strong growth in leisure demand has prompted airlines to bolster their leisure routes and schedules – a major shift away from their pre-COVID strategy. United Airlines’ announcement in March to serve non-hub, leisure destinations from Cleveland, another non-hub city, is a prime example of this shift, as an action like this was inconceivable a year ago. Delta and American Airlines made similar announcements to serve and expand service to traditionally leisure routes. Southwest, a predominantly leisure and domestic focused airline, will return to 96% of pre-pandemic capacity by June. As global vaccine roll-outs continue to expand and foreign entry rules begin to ease, we will see a similar trend with international travel as well. United’s decision to serve Iceland, Greece and Croatia are an indication of that. These network changes are also having downstream implications on other commercial functions. For instance, some airlines are adjusting their value propositions by allowing the use of corporate program discounts for leisure travel. Most have increased focus on key sales channels for this segment – not only online travel agencies, but also specialty channels such as wholesale/tour operators and consolidators. We can expect to see more of this in the months to come.

The new “commuter” segment

An interesting development emerging from the pandemic is the potential change to the make-up of the “traditional road warriors” customer segment. New and well-functioning working models, enhanced technology, work-life balance preferences and cost savings for companies will likely to lead to a reduction in travel by consultants, sales reps and other such profiles that make up this segment. While this may pan out to be true, a new segment – the “commuters” segment – could (positively) offset some of this decline. During the pandemic, most large companies declared a transition to the work-from-home or hybrid working model for the foreseeable future requiring employees to be in the office for only a few days a month. Technology companies, for example, were at the forefront of this. As a result, many employees relocated away from large metros such as the San Francisco Bay Area to smaller cities around the country is pursuit of lower taxes, proximity to close ones or for a better lifestyle. But as physical offices begin to open, employees will likely have to frequent their companies’ offices. Google went as far as to announce limits on the future of remote work. This shuttling from their new locations of residence to their office locations will create a new segment of “commuter” travelers opening the door to service or increased frequency to/from new cities – hubs to/from Billings, Montana or Salt Lake City, Utah, for instance. Carriers can also pursue new customers with their loyalty programs and status levels, and even tweak their value proposition to address the needs of this new business travel segment.

New airline-corporate partnerships

Even as airlines bring back much of their capacity, they aren’t flying to the same destinations, with the same frequency or with the same schedule as they were prior to COVID. As a result, many airline agreements corporations previously had, largely driven by the fit of their the needs and locations with an airline’s route network, may not be optimal anymore. So, corporations may shop around for new partnerships uprooting the previously, relatively well set corporate-airline preferred relationships. In addition, if the commuter segment grows into a noteworthy component of corporate travel programs, it will further upend status quo, setting the stage for a major shake-up in corporate-airline relationships. But while this poses a threat to all airlines, it is also a once-in-a-decade-or-two type opportunity for airlines to win and penetrate corporate accounts they have been vying for many years.

(Even more) Focus on SME

While business travel as a whole shrank substantially, the Small and Medium Sized Enterprises (SME) sub-segment within business travel has been a relative bright-spot in the industry, not just for airlines but across the travel industry. Given the current demand constrained environment, the focus on this segment has moved up on the priority list of many companies. But while this is and always has been an extremely attractive business travel segment given its aggregate value, it is highly fragmented and relatively unmanaged making it difficult to target, capture and retain. Pursuit of this segment will require meaningful investment in developing supporting organizational, technological and analytical capabilities – a potential roadblock in these cash-strapped times.

Some of these shifts will be temporary and airlines will revert to pre-pandemic ways in a few areas. But others will require more foundational and systemic changes that will be difficult to reverse and will have more sustained implications than many believe today.

What is the fastest growing airline in the biggest U.S. market? Vasu Raja, American Airlines chief revenue officer, had an answer on American’s earnings call Thursday. noting, “American and JetBlue together is the fastest growing airline in the whole Northeast corridor.”

Like the other two U.S. global airlines, American has thrown capacity at domestic and short haul international leisure destinations this summer while awaiting the restart of business flying and the reopening of long-haul international flying —particularly to the United Kingdom, which appears likely within months. Those strategies are similar.

However, during the pandemic, American, Delta and United have sought to remake themselves in different ways. Among the famous quotations from Winston Churchill, cited recently by United CEO Scott Kirby as an inspiration, is this one: “Never let a good crisis go to waste.”  In their responses, the carriers have taken different paths.

American cemented alliances with JetBlue and Alaska, boosting its presence in the Northeast and West Coast, where it was the weakest of the three global carriers. Delta uniquely kept its middle seat open for about a year, farther boosting its credentials as the premium U.S. airline.

United, under a new CEO who took over in May 2020, seemed to focus on improving its image with customers and its relationship with pilots. United articulated new policies to increase diversity among new pilots and pursue ambitious carbon reduction goals, while its negotiations with its pilots union generally seemed to accommodate both sides. Also, like American and Delta, it voiced support for voter equity and drew harsh critiques as a result.

Executives of the three carriers discussed their crisis responses on earnings calls during the past week.

On the Delta call on April 15th, President Glen Hauenstein said the airline lost $100 million to $150 million in revenue by not selling middle seats in March. Delta will end the policy, which it began early in the pandemic and pursued longer than any other airline, on May 1. Delta has long sought to distinguish itself by a revenue premium.

“Our brand came out of this very strong,” Hauenstein said. “If we had the choice of whether to do it again, we would do it in a heartbeat.”

For United, “A key pillar of returning to new is changing how customers feel about United, so they choose to fly United,” Kirby said on the April 20th call. Besides operational improvements, the carrier has sought to promote its commitment to the environment and diversity.

As for strategic changes, Kirby said United has altered its approach in Latin America. “We’re going to take our Latin system from very Houston-centric to more diversified across the entire United network,” he said. “We’ve taken the opportunity in the recent months and going forward to diversify that portfolio to now include more out of Los Angeles, Washington and New York and our intention is to keep that.”

Regarding American’s new Northeast Alliance with JetBlue, the carriers on Wednesday announced 24 new routes including JFK-New Delhi on American, thrice-weekly starting Oct. 31. Additionally, on November 2, American will add Boston to Cincinnati, St. Louis and Toronto, as well as LaGuardia to Houston, Oklahoma City and Omaha.

Meanwhile, JetBlue will add 17 new routes including Boston to San Antonio, Kansas City, Milwaukee, Vancouver, Asheville; JFK to San Pedro Sula, Puerto Vallarta, Kansas City, Milwaukee, and Vancouver, and six domestic routes from LaGuardia. Earlier, JetBlue added JFK-Boise, starting in July.

Raja cited JFK-Boise and Boston-Cincinnati as examples of routes enabled by the alliance. They are “services that American Airlines wouldn’t have thought possible and JetBlue wouldn’t have thought possible,” he said. “JetBlue is now our largest global code share partner.”