Your Airline Industry Predictions for 2016


Happy New Year, everybody2016 Airline Predictions. Hopefully you’ve had a good holiday season so far, and now you’re ready for some football. (I’ll be at the Rose Bowl today. Go Card!)

Let’s start 2016 off with some predictions for how the next 364 days will go. If you’d like some inspiration, here’s the review of 2015’s picks. Remember, you’re limited to 3 predictions here, so get your best together, and we’ll talk about them at the end of the year.

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65 comments on “Your Airline Industry Predictions for 2016

  1. There will be a collision between a plane and a drone, there have been a number of close calls and it seems inevitable at some point.

  2. – Baltia goes under and its 747 heads to the scrapyard.

    – A ME3 carrier takes a small equity interest in one of the following US-based airlines: Alaska, Jetblue, or Virgin America.

    – Airbus announces the A380neo.

  3. OK crystal ball dusted off and here goes!

    1. There will be no major changes to any of the 3 big airlines’ award charts redemption levels (AA, DL, UA) as they let the dust settle from the previous devaluations and wait for the numbers to be crunched. Instead, they will mess with availability especially in business & first class trying to find the sweet spot that saves them money yet doesn’t alienate customers and banks who buy their miles. It may be too late as customers fed up with lack of availability flock to Southwest, JetBlue and Norwegian.

    2. At least one low-cost carrier will introduce new routes between the USA & Europe, maybe Southwest or JetBlue. The fares will be less than the cost of YQ surcharges on economy award tickets and this will be advertised to the public causing a mass exodus from loyalty programs.

    3. A major US bank will shock the miles & points world with a huge devaluation to a very popular credit card. It will be worse than the Club Carlson Visa devaluation.

  4. OK crystal ball dusted off and here goes!

    1. There will be no major changes to any of the 3 big airlines’ award charts redemption levels (AA, DL, UA) as they let the dust settle from the previous devaluations and wait for the numbers to be crunched. Instead, they will mess with availability especially in business & first class trying to find the sweet spot that saves them money yet doesn’t alienate customers and banks who buy their miles. It may be too late as customers fed up with lack of availability flock to Southwest, JetBlue and Norwegian.

    2. At least one low-cost carrier will introduce new routes between the USA & Europe, maybe Southwest or JetBlue. The fares will be less than the cost of YQ surcharges on economy award tickets and this will be advertised to the public causing a mass exodus from loyalty programs.

    3. A major US bank will shock the miles & points world with a huge devaluation to a very popular credit card. It will be worse than the Club Carlson Visa devaluation.

  5. Barring a crash or terrorism, I expect 2016 to be a relatively quiet year for the industry.
    1) Delta will continue to confound and perform. I’ve had no luck predicting what these guys will do, so all I’ll say is that they continue to be unpredictable. Something has to happen in Seattle, though. Right?
    2) United will find stability in the C-suite, although that won’t translate immediately to improved operating performance.
    3) Southwest across the Atlantic or some other LCC with ambitions taking on “the pond.”

  6. 1. Up to two large regional airline bankruptcies. Regional pilot shortage continues.

    2. ?Tough year for ULCCs. Frontier and Spirit feel continued RASM pressure and look to return aircraft to accommodate for the too-large orders placed in the previous years. Allegiant’s used aircraft philosophy protects them, but operational challenges continue.

    3. ?Oscar returns at United and positive changes continue. By December, United widely considered having the best US legacy leadership.

  7. 1. Delta and Alaska will finally separate and begin divorce proceedings
    2. JetBlue and Alaska will begin a codeshare that leads to a merger, but Delta wants them so bad that they take everyone to court over it.
    3. Southwest still won’t have a labor deals that get approved and still make incredible profits.

  8. 1. Malaysian airlines files for bankruptcy; Allitalia and Aer Lingus go through restructuring, possibly through new shareholders or alliance agreements 2. Russian airspace becomes restricted: Russian commercial air traffic continues but international commercial flights are no longer allowed to cross or enter Russian airspace; non-commercial air traffic continues but requires extra authorization 3. Liquid restrictions at airport security are lifted (more wishful thinking than belief)

    1. “Russian airspace becomes restricted”
      Won’t happen, all those transit fees are paid in US dollars or Euros.
      Vlad will swallow his pride. US aircraft have been flying through Cuban
      airspace during the embargo.

    1. I have no idea why boeing spent so much on 737 and so little of 757. 757 is a much better plane and prefered by airlines and crew. Although both planes are too narrow for 3 x 3 seating for long flights. Seat are around 17.2 inches wide versus 18.5 on 767, 777. Seats are 18″ on MD88 and MD90. Being a bit wider myself, that 1 inch makes a difference!

      1. The 757 production line and supply chain are gone. Reviving those would cost the same as building a new airplane, so a 757NG does not make any financial sense.

      2. The 757 has higher costs, both to buy as well as operate. Other than a few niche markets (shorter transatlantic flights with lower passenger numbers, possibly improved high-altitude performance) the largest 737s or 767/787 can replace it. It wouldn’t be worth making a 757NG just for those markets.

  9. 1. AS will end relationship with DL and find a merger partner with HA or B6.
    2. WN will charge for 2nd checked bag and start assigning seats when they start a true business cabin.
    3. Regional pilot shortage will cause more mainline flights between smaller airports and hubs, upgauge in capacity with less frequency in hub to hub flying and several regional airlines will fail. Congressional action to reduce 1500 hour rule will happen, but it’s too late.

  10. 1. United’s service and product continue to improve, as the executive office door keep revolving.
    2. United reduces ps frequency from EWR to the West Coast.
    3. Spirit and Frontier get hitched; the honeymoon is rocky.
    4. Judge rules against DL at DAL.
    5. DL and AA’s Basic economy product fizzles out.
    6. DL keeps trying, but isn’t gaining major market share against AS in SEA on competing nonstop routes.
    7. AA introduces a complimentary snack in economy similar to DL and UA.
    8. Loyalty programs loose customer loyalty.
    9. SWA will drop at least one former AirTran city.
    10. SWA will not fly to Hawaii or Alaska.
    11. Fuel prices go up, airline stock prices drop slightly.

  11. 1. SWA will finally get Union unity with several contracts agreed upon, as well as announce assigned seating and some type of upgraded seating option with actual different seats; the Max 8 seat will trickle down slowly to the entire fleet.
    2. United will continue to do better operationally and the CEO, (Oscar) will become much hated by Wall Street, and much loved by the employees, ultimately to his demise.
    3. Delta’s operational excellence will fall, and Wall Street will notice and begin to ask questions that relate to costs, primarily, why so many different fleet types, leading to a fleet simplification announcement toward the end of the year.

  12. 1. Frequent flyer programs will be further dismantled. Delta has started by eliminating upgrades to first class for elites, United is holding more R class seats until the last few days before the flights.
    2. Credit card companies will find cash back more attractive to new customers than frequent flyer miles which will be largely useless to most customers.
    3. United will stop blindly following Delta and will improve its customer experience and, baring labor disputes, will win over Delta frequent flyers.

  13. My 2016 airline predictions:

    1. Hawaiian will find a new 100 seater that can equal the 717’s performance on Inter-Island flights.
    2. One of the US3 will get split up due to an antitrust complaint by the LCC’s & ULCC’s.
    3. Allegiant gets grounded by the FAA.
    4. United orders the CSeries.
    5. 747 production ends (It’s only a matter of time…).
    6. Bulk of US regional flying goes to mainline.

  14. 1) United’s customer service scores will improve with new leadership, but employee relations will continue to suffer through 2017.

    2) Rumors will swirl about Alaska and JetBlue flirting, but it goes nowhere.

    3) Southwest announces it’s acquiring Sun Country.

  15. More consolidation in Europe. Some of these are deliberately OTT, because fun.

    WizzAir will be bought by easyJet as Ryanair start competing more directly with easyJet.

    IAG will add rescue Cityjet creating Fortress London City.

    LH and AF will start merger talks.

  16. Three predictions for 2016. Here it goes –

    1. Due to horrible performance and zero customer service, more and more airports opt out of TSA. Anyone that has flown out of ROC, SFO or MCI notices a difference.

    2. There is an incident at the backdoor of an airport with a food delivery, parts delivery, fuel delivery etc. These folks do not go through passenger security and it is a weak spot of airport security.

    3. There will be an incident where communities and airports intersect. I am not sure what it will be – but something where a plane must land on a shorter than usual runway because it is after midnight or noise reduction where pilots pull back on throttle while climbing.

    First 2017 Prediction –

    1. With record profits in 2015 and 2016 – labor unrest at many carriers. Delta flight attendants finally unionize in early 2017.

  17. 1. An airline trade group or at least one individual airline will push Congress for relief from the 1500 hour ATP rule, possibly by arguing that training performed by the airline itself in an airline environment is superior to conventional training, and thus something MPL-like is brought to the US. A catalyst for change will be an incident where a pilot is found to have pencil-whipped considerable flight time.

    2. Believing that Delta’s EMB-190s are destined for the west coast, and having already serviced every city a 737 can reasonably service from SEA, Alaska orders a 100-seat class aircraft. Alaska starts seeing losses in revenue per ASM to Delta’s growth, but Delta’s much higher labor costs means Alaska has the better profit margin on competing routes.

    3. One or more of the ME3 will puppet an Asian airline, and if it’s not one of Thai, Cathay, or Singapore it will mean the end of them as relevant players. Meanwhile, improved contracts among American carriers brings many expats back to the States, and the ME3 suffer for it, limiting branded growth. Emirates outsources its cargo operation to Atlas to preserve staffing for passenger ops, but Atlas struggles to staff it, too.

  18. 1. Delta expands basic economy to all routes, frustrating corporate travellers who are forced to take the lowest fare, but still fly Delta.

    2. Delta’s pilots strike when they dont get insane raises

    3. AA creates an operations guarantee like DL and UA, but none of them pay out anything significant due to technicalities.

  19. 1. Delta finally gives up on Love Field…takes it out on Alaska by breaking up with them.

    2. AIRBUS says no new A380. Tim Clark starts talking to Redmond…

    3. Republic files for bankruptcy. Congress is unmoved and fails to loosen things up regarding the 1500 hour rule.

  20. West Coast predictions:
    AS and DL formalize their divorce;
    AS adds real F to a subset of their Q400s for 1-2hr routes like PDX-OAK; crippling DL’s ability to complete on those routes
    WS joins OneWorld; is forced to add 3 rows of real F and starts code-sharing with AS (as AS’ defence against DL).
    More and more people abandon AC Rouge; and AC is forced to return mainline to a number of [non-holiday] routes (already happening)
    Allegiant will stumble in a big big way when the price of oil goes back up.
    After a bad start the C-Series turns out to be a pretty decent airplane, and sales explode as mainline carriers realize they need something smaller than a 738/320; but the mainline carriers are crafty in the implementation, creating a pay scale quite a bit below their current payscales for this airplane.

  21. 1 (and I hope this doesn’t happen): DL formally de-hubs CVG. Heck, it’s done pretty much everything short of making a formal announcement and updating the route maps so that CVG is just another dot. Maybe it retains unofficial “focus city” status but I think 2016 is the year DL finally ends the charade.

    2: AA grows PHX and CLT

    3: United makes yet another change at CEO.

  22. Geez, I was what, 0-24 last year? Hey, these are still fun to put together…

    1) The federal judge rules in favor of DL in the DAL gate sharing dispute. WN starts making noise about either lifting the 20-gate cap at Love Field, or beginning a small secondary operation at DFW.
    2) Southwest still shuns bag and change fees, but announces the introduction of an extra legroom section available for an additional fee.
    3) DL finally experiences a spate of operational issues. To their credit, they quickly apologize and offer compensation to their customers, minimizing pushback.

  23. 1) A new all biz class or E+ transatlantic airline will launch (or be announced) with an idiotic business plan. Like all others before it, it will falter and eventually fail, though it may not fail before the end of 2016.

    2) A drone and a commercial plane collide. No fatalities save for the loss of civil liberties and the expansion of another bureaucracy at the FAA.

    3) The TSA will continue to fail to spot 70-95% of all weapons. Speeches are made, talking heads fret, but a few days later the only people who remember it are politicians bankrolled by private security companies.

    4) (since the previous one is a gimme) A terrorist attack will be attempted against a commercial flight (maybe cargo), but will fail because of dumb luck or because the terrorist(s) are stupid (think shoe bomber). Nonetheless, the TSA and NSA take all the credit and argue for massive budget increases.

    5) Planes begin to be “drone tested” (similar to bird tests), by seeing what happens when they hit consumer level drones. Damage occurs, but not as much as during bird strikes.

  24. A view from down under

    1) Delta will start flying LAX-MEL or SEA-SYD. United get IAH-AKL going.

    2) Completely agree that a drone and plane will collide. I’d add to that that there will be a lithium battery fire on an aeroplane this year.

    3) Many more flights from second (and third) tier Chinese cities to the US west coast and Australia

  25. Avatar airlines starts flying A380’s from Fresno to Reno.

    American continues to print money, adds more Asia routes, pisses off the naysayers by keeping PHX and CLT as hubs, finally adds a nonstop to Europe from PHX, and inner China flights from LAX.

    More 787 problems with batteries and systems.

    Cuba is open, American gets most slots, including MIA, DFW, LAX and JFK, DL gets slots from ATL, JFK. UA gets slots from IAH, EWR.

    Eastern Airlines goes bankrupt, but keeps flying, but not for long.

    Long lines at LAX

    Many near misses and near catastrophes at Allegiant, causing more FAA scrutiny.

    Spirit will have terrible dispatch issues, but cheap fliers will still book them..and complain about the price.

    More pieces of the MH 777 will be found, but still no smoking gun.

    Virgin America, emboldened by low fuel prices will add more unprofitable routes and drop them when fuel prices rise.

    Once again, I predict that US pilots will lose their endless seniority issues with HP pilots, leading to a seniority integration.

    A350 will prove to be a much better plane than 787, as more planes go into long distance service with few dispatch issues.

    Southwest loses battle at Love, DL gains slots.

    Airlines cancel flights to Brazil, as their economy tanks further.

    New version of A380 is cancelled.

    737 Max and A320 Neo have very few problems, turn out to be good planes.

    No one will try to resurrect Brannif, or MarkAir, McClain, RootsAir, USAfrica or JetTrain.

  26. I reiterate my prediction from last year.

    IAG will buy Finnair.

    This year Finnair is turning a profit but they need a stronger European operation to support their expanding Asian operation. The Finnish government is willing to divest their 56% share and this would give a great boost to IAG’s Asian operation.

  27. 1. Delta establishes a new focus city in SJC and initiates intra-Cal flying causing WN to face new competition in monopoly markets.

    2. There will be a US merger outside of the big 4 (WN, AA, DL, UA) as the smaller players try to gain scale.

    3. The judge finally rules in the Love Field case and DL gains the right to continue to operate.

  28. 1. Unfortunately there will be a collision between a drone and an aircraft with people on board.
    2. United sees modest gains in operational performance but still has plenty of work to do.
    3. At least one regional folds.

    Bonus predictions
    – WN will continue not flying to Hawaii
    – MH370 still not found but a couple small pieces of debris washes ashore
    – If #1 hasn’t happened (and I hope it doesn’t), California will have an incident of a drone grounding firefighting aircraft during a wildfire. This has happened before, but unlike in the past, this grounding will cause loss of property or life and will see prosecution/litigation that draws modest press coverage.
    – At least one of the legacies will announce new plans to add <110 seat aircraft at lower frequencies to offset reduced regional flying

  29. 1. Settlement in Dallas Love Field fight adds 2 more gates to the airport for DL. After work is complete, Virgin America realizes it’s never going to make money at Love and drops service, allowing WN to grab those gates

    2. AS continues its solid performance, despite DL’s best efforts to win SEA. DL shareholders begin to show frustration with management for growing losses at SEA, the first time they’ve been vocal about Richard Anderson’s strategy. QX adds a regional jet to its fleet after contentious negotiations with its unions, allowing AS to add more intermediate cities.

    3. Both Boeing and Airbus surprise analysts with new customers for the 747 and A380, while C Series finally has a breakout sales year, landing 2 major customers in the US

  30. 3 predictions. what, r u getting ideas from the legacies….limit carry-on bags….next you’ll charge us for the predictions.

  31. Top 10 Predictions:

    1) The new government of Portugal trys to buy back TAP Portugal, but because of the European Union and the austerity measures they don’t succeed.

    2) American Airlines futher expands in asia from LAX as they look to solidify their “hub” there.

    3) British Airways partners with China Eastern angering Air France-KLM and putting pressure on China Eastern and its relationship with Skyteam.

    4) Aer Lingus rejoins OneWorld and adds more transatlantic routes.

    5) Delta finalizes buying 49% of AeroMexico and essentialy takes it over as it did Virgin Atlantic.

    6) Latam reveals its new livery in the month of February towards the middle of the month.

    7) S7 expands to more international destinations, mostly essential ones to fill the gap by Transaero. This however will probably only be around two destinations because of how troubled the economy is.

    8) VivaCAM starts up and is a success, but faces competition as Avianca trys to squash it.

    9) Malaysia Airlines and Thai Airways financial trouble lessens and Thai might even become slighly profitable. Malaysia Airlines adopts a more Sharia compliant nature to boot out Rayani Air.

    10) United and Delta introduce Premium Economy on their planes to compete with American

    Unrealistic hope: American starts africa Service

    *I posted this in the wrong discussion earlier*

  32. Emirates splits an order between Airbus and Boeing

    Delta announces service to New Zealand

    The Hawkeyes win, err, get crushed at the Rose Bowl

  33. 1. American and Emirates agree to ‘closer ties’.
    2. Virgin America is aquired by Delta.
    3. People with an interest in aviation learn to count to 3.

  34. 1 – Alaska will announce plans to add 787’s. I am probably dreaming but wish they would up the seats on the busier cross country routes! Too bad the 757’s are not really an option any longer … I don’t see them going with A350’s due to Seattle ties.
    2 – Malaysia 370 will be located.
    3 – DL – AS divorce is final.

  35. 1. another commercial flight will be shot or blown out of the sky by a terrorist (I hate writing this one, but I believe it to be true)
    2. American will significantly marginalize one of its newly acquired USAir hubs. My guess is CLT, but there are reasons to do PHX also
    3. Southwest’s thusfar successful entry into international flying (via its acquisition) will spur it to greatly increase flying throughout the Caribbean, Mexico, and beyond.

  36. 1) United will order 100 seat aircraft

    2) Labor relations at United will improve with flight attendant contract ratified; other groups ratified.

    3) Delta will put in a true premium economy international product

    4) Hints of airfare wars from the past will surface in various markets spurred on by AA.

    5) United will introduce new BusinessFirst seat on A350 but will not be all aisle access design.

    6) United’s domesticated 777 fleet will draw attention to some flyers as being a little “retro” feeling of the good old days. Most travelers will still struggle to know that they are even flying on United, American, or Delta as they can’t tell much difference between them.

    7) Smaller communities will feel the pinch of larger planes and lower frequencies. I’m forecasting 3 – 7 communities losing air service altogether in 2016.

    8) JetBlue makes a play for Europe.

    9) At least one of the US – AUS/NZ flights fizzles out with too much competition.

    1. NO CHANCE of number 2!!! I will even predict that the flight attendants will not even have something to VOTE on in 2016. BTW if there were to be a TA on which to vote, it will be voted down-barring any chicanery……

  37. CSeries will receive way more orders

    A350 gets more European orders

    Vietnam Airlines announces route to US or Canada-US

    New Flight Simulator comes out to follow the footsteps of FSX

    1. Matt –

      I like your #2 prediction. I already made my 3 predictions, but if I had a mulligan or an aborted takeoff (are those allowed?) I would substitute this prediction –

      Airbus will establish itself as a more viable option than Boeing in 2016. The reason, they have better planes. A321 is better aircraft than the 737. A330 and A350 match up well if not better than 777 and 787. The A380 is a niche aircraft but has not competition. With Delta buying Airbus now it shows Boeing does not have a stronghold on US carriers like Airbus has on European carriers.

      – Jeff

      1. My extremely crazy prediction is that Boeing will concentrate on military and space business and sell off the commercial division. Lockheed Martin will be the buyer.

  38. 1. Delta terminates its CPA with Shuttle America (Republic Airways)
    2. Southwest finally announces service to Hawaii
    3. Boeing announces an end date for the 747 production line

  39. 1) United announces 1-2-1 business configuration
    2) Delta and Alaska end their partnership
    3) American launches PHX-LHR and PHL-NRT
    4) American dehubs JFK, consolidating its northeast ops at PHL
    5) JetBlue and Virgin America announce merger
    6) Delta officially cancels its 787 order
    7) American does not match United’s plan to reinstate complimentary economy snacks
    8) The USA enters another recession, forcing airlines to make cutbacks
    9) Southwest announces service to Hawaii
    10) TSA ends liquid restrictions (wishful thinking)

    1. Delta is going to convert the 787 order into more 737s. Airbus will do all of the long haul flying and Boeing the short haul.

  40. Southwest drops service to Flint, Wichita, Dayton, Columbia SC and Portland ME. They will also add flights from MKE to capture more activity from folks in Lake and McHenry counties, who don’t want to drive thru the traffic to Midway – assuming Allegiant doesn’t start service there first.

  41. 1. One of the European “Big 3” (IAG, LH, AF/KLM) or Etihad will (try to) buy (a part of) LOT.

    2. Airbus will launch A380neo with a +10 order from an airline that is NOT located in the Middle East (UA? AA? LH?)

    3. Oil price stays low, airlines still don’t lower fares, will make huge profits but still don’t lower fares.

  42. SWA – Randy Bobbitt resigns. Decisions will be made as to whether the number driven initiatives are still the way to go. can current management adjust as they’ve asked labor.

    UA – will shrink by putting even more flying on regionals and eliminating some unprofitable long distance flights as they retire 767/757. Decision time for CO vp big cheeses….leave or stay and stink-up the joint. More importantly, does new CEO or acting CEO have the guts to communicate and hold top brass accountable for their actions which are measured against healthy standards.

    AA – pulls the covers off the strategic initiatives. w labor contracts in place they’ll rally the troops to storm the beaches of LAX and JFK. Miles program gets a major change, more flexible fares accompanied by hard product enhancements. their goal is to weaken the enemy lines and give the troops confidence to regain lost territory.

    DL – ladies and gentleman the captain has said we’ve reached cruising altitude; the captain has turned off the seat belt sign but we recommend you remain buckled-up, we’ll be coming to serve beverages. In reality, the 747 has began it’s descent.

    Spirit/Frontier – publicly announce merger intentions and the merged spirit of the frontier becomes a public company.

    Alaska/Jetblue – conduct strategic merger reviews and begin non-public merger/alliance discussions. UAL on the top revenue side and frontier/spirit on the low side will affect pace and details of the merger.

    virgin america – who knows.

  43. last ones…..airlines will provide a hassle free service to CF’s concierge service :-)

    30+ year prediction. CF will change his name to HF as he mellows out with age.

  44. seriously, CF thanks for keeping this blog which has helped me to vicariously stay connected to the industry i worked right out of college.

    i don’t read airline blogs but when i do i read…..remain thirsty my friend.

  45. These are my more realistic predictions for 2016.
    1. Delta will replace the 787 order with more 737s.
    2. If Trump gets elected, expect a more hostile environment towards the ME3.
    3.United will still be the worst airline in the US but will show signs of improvement.
    4.Allegiant will be grounded due to operational issues.
    5.No mergers!?

  46. Marco Polo Club. Cathay Pacific will lose a significant percentage of MPC members especially Diamonds (OWE) and Golds (OWS) flying PEY/Y based outside of Hong Kong and to a lesser extent in Hong Kong after the MPC changes in April.

    These ‘lost’ passengers will continue to use the CX First Class and Business Class lounges with entry granted by top tier status on AA, BA, and QR, to the continued annoyance of MPC elites, but CX’s delight in getting payment for access from the other One World partner programmes.

    CX will not notice (nor care) as they will be replaced by mainland China travellers.

    Nicc HK

  47. United drops the act and reliquishes its “hub” @ LAX. It will drop capacity as it focuses it’s Asia operations in SFO. The only services it will reatin are hub connections and pacific service. Some flights to larger non-hubs may also stay.

  48. My predictions, sorry it is late…

    1 – Boeing will announce the MOM airplane at some point this year, too many lost orders to Airbus and the A321neoLR. The real question will be if it is a 737MAX stretch (unlikely), 757MAX (maybe), 767Mini (my idea, take sections out, gives them a temp MOM), New Sheet Design (2018+, too many other projects right now).

    2 – Delta and Alaska will go all out war on one another at SEA; partnership done. I am going to say that Alaska will be on the short end of this war and ends up merging with….AA. However a better fit would be jetBlue.

    3 – Sadly I don’t think they will find much of MH370, the search will end in May/June.

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