Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Taking off in Toulouse (and Seattle)
The Economist (print edition) ^ | Apr 28th 2005 | Staff

Posted on 04/28/2005 10:06:54 PM PDT by Paleo Conservative


The giant flies

Just as Airbus's super-jumbo makes its maiden flight, Boeing bounces back

WHEN the new A380 took off from Airbus's French production base in Toulouse on April 27th, it should have been the European aircraft manufacturer's big week. The successful first test-flight of a 555-seat super-jumbo was quite an event. Instead, Airbus's American rival Boeing almost stole the show. On April 25th, Boeing said that, if all the options are taken up in a new order for widebody jets from Air Canada, the value at list prices would be around $15 billion—making it one of the biggest aircraft orders ever. The following day, Boeing landed a second huge order from Air India. Soon it will announce a third, this time from Northwest Airlines for its new 787 long-haul aircraft.

The timing may well have been deliberate. Nevertheless, the three orders are more than marketing hype, and should worry Airbus. They all come from airlines that have long been big Airbus customers, and they reflect a new sense of purpose at Boeing, which now looks like outselling Airbus for the first time in recent years under its new super-salesman, Scott Carson. They also bring the tally of launch orders for Boeing's new 787 to over 200—impressive for a new plane which has been on the market for only a year. Airbus, by contrast, has only one customer for its rival A350 long-haul plane, and sees orders for the A380 obstinately stuck at 154.

Boeing sorely needed a boost, not least to spread cheer at its civil-aircraft base in Seattle. Airlines have stopped ordering the venerable 747, except in cargo versions, and the firm may soon have to close the production line, along with those of several smaller planes such as the 717 and the 767.

Boeing clings to the hope that the 747 will survive in a new advanced version, carrying 450 passengers (instead of the usual 416), using composite (weight-saving) technology and engines developed for the 787. British Airways, Cathay Pacific and Japan Airlines—three big carriers that have conspicuously avoided signing up for the new Airbus—are understood to be potential launch customers of the new Boeing jumbo, if it ever flies. Several earlier attempts to upgrade the 35-year-old 747 have flopped.

Unless Airbus can soon unveil some new orders for the A380, possibly at the Paris air show in June, scepticism will grow that the €12 billion ($15.7 billion) project will never earn a profit. Airbus needs to sell around 500 (out of its target sales of 700 over 20 years) to earn a real return on the investment.


TOPICS: Business/Economy; Government; US: Washington
KEYWORDS: 747; 747advanced; 777; 787; a380; airbus; boeing; breakeven; roi; trade
So now the number of A380s Airbus needs to sell to sell just to make the money invested back is double the original estimate of 250 and over a period of 20 years.
1 posted on 04/28/2005 10:06:57 PM PDT by Paleo Conservative
[ Post Reply | Private Reply | View Replies]

To: Jim Robinson
€12 billion

I guess the Euro sign is an illegal character on Free Republic.

2 posted on 04/28/2005 10:08:12 PM PDT by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: COEXERJ145; microgood; liberallarry; cmsgop; shaggy eel; RayChuang88; Larry Lucido; namsman; ...
Ping!

If you want on or off my aviation ping list, please contact me by Freep mail not by posting to this thread.

3 posted on 04/28/2005 10:14:46 PM PDT by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Paleo Conservative
I think the biggest problem (literally!) for the A380 is the fact airports will have to redo their runways, taxiways and parking gates just to accommodate this huge plane, a process that is not in the cheap department.

On the other hand, the current 777 and future 787 planes are easily compatible with current international airport infrastructure, so there's no need for expensive reconstruction just to accommodate the Boeing planes (most airports did the upgrades back in the 1970's to accommodate the 747).

4 posted on 04/28/2005 10:28:51 PM PDT by RayChuang88
[ Post Reply | Private Reply | To 1 | View Replies]

To: Paleo Conservative

Would anyone like to be among 800 passengers on the sasme plane? How long would it take to get off and on, never mind getting luggage? They would have to offer a lot of extras to First and business-class passengers.


5 posted on 04/28/2005 10:41:39 PM PDT by RobbyS (JMJ)
[ Post Reply | Private Reply | To 1 | View Replies]

To: RayChuang88

I can't see airports in the middle of the US making the modifications. DFW doesn't currently have any 747 passenger service. I don't think IAH will make any modifications for the A380 either, and both airports were built to accomodate the 747. IAH opened about a year before the first 747 entered revenue service, and DFW opened about three and a half years after the 747 came into service with the airlines. Both airports were built with much room for expansion unlike most other airports in the US. Airlines at IAH are more interested in having multiple departure times to allow more flexibility for their business customers than having one big plane that arrives and departs once every day. I'm sure DFW would just be happy to get one 767 or 777 flight a day for the same international destinations available from IAH.


6 posted on 04/28/2005 10:46:57 PM PDT by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
[ Post Reply | Private Reply | To 4 | View Replies]

To: RobbyS
Would anyone like to be among 800 passengers on the sasme plane?

It's bad enough being on a full 747.

7 posted on 04/28/2005 10:47:52 PM PDT by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
[ Post Reply | Private Reply | To 5 | View Replies]

To: Paleo Conservative

--" I guess the Euro sign is an illegal character on Free Republic." --



It looks fine on preview.


8 posted on 04/28/2005 11:27:07 PM PDT by PAR35
[ Post Reply | Private Reply | To 2 | View Replies]

To: Paleo Conservative

The A-380's meant for slot restricted airports like Tokyo Narita and London Heathrow, not necessarily the New York to Dallas market. It makes sense on some routes (like Tokyo to London) but not on most. I wouldn't expect Dallas or Houston to rebuild for the A-380 unless American or Continental buy it. And I doubt they will. Memphis might, if FedEx actually takes delivery of them.

As you said, the recent U.S. trend has been for increased frequency with smaller planes and increased flights to European non-hub airports. Most American carriers don't even fly the 747 any more, opting to fly 767, 777s and A-330s overseas. Continental has even begun flying 757s to some secondary European airports from Newark.


9 posted on 04/29/2005 1:29:57 AM PDT by conservative in nyc
[ Post Reply | Private Reply | To 6 | View Replies]

To: conservative in nyc

A-380 is the last nail in Airbus's coffin, the damn EU Socialist deserve it too, IMO of course! Think I will check the Boeing stock prices today.


10 posted on 04/29/2005 2:16:12 AM PDT by iopscusa (El Vaquero.)
[ Post Reply | Private Reply | To 9 | View Replies]

To: conservative in nyc
Continental has even begun flying 757s to some secondary European airports from Newark.

Which makes me think Boeing will make sure the 737/757 replacement narrow bodied aircraft will have wing and gross weight options early on in the design and manufacturing process to allow range for trans Atlantic operations. Don't be surprised if the next narrow bodied aircraft has a twin aisle design.

Remember the 757/767 were never designed or intended for transoceanic operations. Back in 1978 when the design process started, they were intended for domestic and other routes with diversion times less than 60 minutes. If Boeing had known back then that the 767 would replace the 747 as the most common trans Atlantic aircraft they probably would have made the cross-section wider to accommodate standard freight containers in its belly. It is the lack of freight capacity that has killed demand even for newer models of the 767 compared to the A330.

11 posted on 04/29/2005 5:03:43 AM PDT by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
[ Post Reply | Private Reply | To 9 | View Replies]

To: conservative in nyc
The A-380's meant for slot restricted airports like Tokyo Narita and London Heathrow, not necessarily the New York to Dallas market.

But which begs the question. Why are those airports slot limited? Prior to the introduction of the 747 there weren't any aircraft with the range for Dallas to Tokyo or Dallas to London flights. People from the middle of the country wanting to travel to Europe tended to fly first to JFK to catch another plane to a major hub on the other side of the Altantic or to LAX or Seattle to go to destinations in the Pacific. Many of the people flying to Tokyo were actually continuing on to other destinations.

With 180 minute and longer ETOPS, and longer ranged smaller planes, someone flying from Dallas or Houston can fly directly to Seoul, Honk Kong, Bejing or other Asian destinations without first flying through two hub airports first. This decreases demand for 747 or A380s flying from LAX or SEA to NRT.

This process is also happening in the UK with charter operators moving operations out of London airports like Heathrow and Gatwick. They are flying directly to tourist destinations like Cancun and Orlando and various cities in Europe. This eliminates traffic on London to Mexico City and London to Miami routes.

12 posted on 04/29/2005 5:30:24 AM PDT by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
[ Post Reply | Private Reply | To 9 | View Replies]

To: Paleo Conservative

"Would anyone like to be among 800 passengers on the sasme plane?"


The seeting arangement must be allot like sitting in a crowded movie theater. 800 people at bagage claim must be allot of fun in it's self.


13 posted on 04/29/2005 5:41:10 AM PDT by NavyCanDo
[ Post Reply | Private Reply | To 7 | View Replies]

To: Paleo Conservative
The reasons for the landing slot restrictions are 1) reduce noise levels around airports (less planes flying in and out means lower overall noise) and 2) reduce the air pollution from jet engine exhaust.

In Europe and much of Asia, they have no more space to build the type of expansive airport that can support large numbers of takeoffs and landings per day. As a result, the only way to increase capacity is to fly larger planes, hence the reason why the medium-range version of the 777-300 has sold very well in the Asian market and why the majority of Asian airlines are buying the A380-800. Here in the USA, we have a very large number of airports with commercial airline service operating point-to-point flights, hence the reason for the success of Southwest Airlines, JetBlue Airways and AirTran.

14 posted on 04/29/2005 6:33:39 AM PDT by RayChuang88
[ Post Reply | Private Reply | To 12 | View Replies]

To: Paleo Conservative

I wonder airbus is going to hold back on announceents in order to have them "appear" at the paris airshow.


This does not cover the "order wars" success that Boeing seems to have had of late.


15 posted on 04/29/2005 7:26:56 AM PDT by longtermmemmory (VOTE!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Paleo Conservative

I wonder how much of that decreases traffic on the trunk routes and how much of it expands the overall market by bringing cheap tourists to destinations they wouldn't have considered before. I think that a lot of the package trips to Cancun and the Dominican Republican from Europe are tapping into new markets by attracting people who would have otherwise gone to Ibiza or the Canaries on a similarly priced package, or maybe nowhere at all.


16 posted on 04/29/2005 7:43:26 AM PDT by HostileTerritory
[ Post Reply | Private Reply | To 12 | View Replies]

To: RayChuang88
In Europe and much of Asia, they have no more space to build the type of expansive airport that can support large numbers of takeoffs and landings per day.

There are already quite a few old air force bases available in Europe to be converted into airports. A lot of the difference has to do with less centralized political and economic systems in the US compared to Europe and Asia. The US tends not to favor economic development of its capital at the expense of other parts of the country unlike France and other countries.

17 posted on 04/29/2005 8:21:24 AM PDT by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
[ Post Reply | Private Reply | To 14 | View Replies]

To: longtermmemmory
I wonder airbus is going to hold back on announceents in order to have them "appear" at the paris airshow.

And wait for another hundred orders of 787s?

18 posted on 04/29/2005 8:22:38 AM PDT by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
[ Post Reply | Private Reply | To 15 | View Replies]

To: RobbyS
Would anyone like to be among 800 passengers on the sasme plane? How long would it take to get off and on, never mind getting luggage? They would have to offer a lot of extras to First and business-class passengers.

As I understand it, part of the gate modifications for the A380 include 3 jetways for loading/unloading, so that's only 260 per jetway, a normal load.

Same for the baggage area, a fully loaded A380 is like having two 747s arriving at the same time. You will just have to have several carousels for the different class passengers.

Several US airports have already begun the modifications necessary for the A380.

However, I don't think there will ever be enough destinations to justify a fleet of 500 A380s in the world.

19 posted on 04/29/2005 9:42:19 AM PDT by Yo-Yo
[ Post Reply | Private Reply | To 5 | View Replies]

To: Yo-Yo

Almost like berthing a ship.


20 posted on 04/29/2005 10:01:37 AM PDT by RobbyS (JMJ)
[ Post Reply | Private Reply | To 19 | View Replies]

To: Yo-Yo

There is one hitch.

Customs.

I do not see ANY plans to change or increase the lines at customs clearing.

They could offload the entire plane only to have it bottlenecked at the customs counter.


21 posted on 04/29/2005 10:28:36 AM PDT by longtermmemmory (VOTE!)
[ Post Reply | Private Reply | To 19 | View Replies]

To: Paleo Conservative

The 787 and 747 kickers address the dispersed American model, whereas the 380 addresses the concentrated Asian model.


22 posted on 04/29/2005 10:57:13 AM PDT by GOP_1900AD (Stomping on "PC," destroying the Left, and smoking out faux "conservatives" - Take Back The GOP!)
[ Post Reply | Private Reply | To 6 | View Replies]

To: conservative in nyc

380 will be very popular in the inter-Asian market as well.


23 posted on 04/29/2005 10:58:31 AM PDT by GOP_1900AD (Stomping on "PC," destroying the Left, and smoking out faux "conservatives" - Take Back The GOP!)
[ Post Reply | Private Reply | To 9 | View Replies]

To: Paleo Conservative

The answer is simple, with the notable slight exception of Japan (e.g. Osaka), Asian countries don't have Dallases, Denvers or Detroits. Such airports do not exist there. In Asia, airports are either behemoths, or, places that can barely take a 737.


24 posted on 04/29/2005 11:01:58 AM PDT by GOP_1900AD (Stomping on "PC," destroying the Left, and smoking out faux "conservatives" - Take Back The GOP!)
[ Post Reply | Private Reply | To 12 | View Replies]

To: RayChuang88; Paleo Conservative

Bingo!


25 posted on 04/29/2005 11:03:19 AM PDT by GOP_1900AD (Stomping on "PC," destroying the Left, and smoking out faux "conservatives" - Take Back The GOP!)
[ Post Reply | Private Reply | To 14 | View Replies]

To: Paleo Conservative

Narita is slot limited because it has just one runway, they have tried for years to get a second one, but the farmers in the area have balked. Great airport though, one of the few big ones that still has an outside observation deck. Heathrow is slotted because of space, gates and number of flights, its a big airport and has lots of movements.


26 posted on 04/29/2005 12:14:07 PM PDT by Central Scrutiniser (Remember when conservatives embraced the rule of law? (Do ya?))
[ Post Reply | Private Reply | To 12 | View Replies]

To: Central Scrutiniser
Narita is slot limited because it has just one runway, they have tried for years to get a second one, but the farmers in the area have balked.

It's about time Japanese consumers were able to buy rice on the world market. Texas or California rice costs a tenth what Japanese rice costs. If Japanese farmers weren't coddled so much, there wouldn't be any problem getting land for an additional runway at Narita.

27 posted on 04/29/2005 1:55:45 PM PDT by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
[ Post Reply | Private Reply | To 26 | View Replies]

To: Paleo Conservative

Strong Indications Of Purple Kool-Aid
And, Don Corleone As Sales Director

Airbus rolled out the A-380 last week, with one heck of a welcoming party. Judging by what went on, the late Reverend Jim Jones was manning the cocktail bar.

In what appeared to be the biggest political circus since Monica's blue dress came back from the dry cleaners, the Europeans all joined together to celebrate, nay, worship, the A-380 WhaleJet. Sort of like a coming-out party for a five-ton overweight debutante. Over 5,000 people were reportedly there. Lots of speeches. Enough dry-ice fog to look like an outtake from Saturday Night Fever. Confetti falling from the ceiling. Music. The heads of state from all over the Continent - enough political suits to fill the Big 'n Tall section at Men's Wearhouse.

And everybody, apparently, was drinking Rev. Jim's Purple Kool-Aid. You just gotta dig some of the grand pronouncements at the gala...

"Under the name of Airbus, Europe has written one of the most beautiful pages of its history," gushed Airbus chief Noel Forgeard.

Jacques Chirac, entertaining all, added to global warming with jingoistic speeches about the glory of France, as if anybody cared.

"We need many other projects of this size and of this ambition," Chirac gurgled, as he called for "a great European effort based on the strength of our businesses and of our laboratories that allows our industries to be at the forefront of innovation and at the heart of tomorrow's markets."

All-in-all, a gutsy demand from a guy running a country with an enforced 35-hour limit on the work week and a legislated month of vacation time. It's a wonder this thing ever got out of the hangar. A gutsy statement, too, about an airplane that is essentially not much more than a composite 747 on steroids.

The Glory of France, England, and Europe First. Market Analyses Second. The whole show looked like a junior high pep-rally that got way over budget. The real story wasn't the airplane. It was the high-level politicos and various other luminaries that surrounded it, and what they really said. Aside from all the gush, the message seemed to be some adolescent chant, "Golly-gee, we got one bigger than Boeing."

We Heard All This 40 Years Ago. Take all those quotes, and it sounds distantly familiar. Just replace "Airbus" with "Concorde" and you've just done a time-trip back to the 1960s, when the whiz-kids of Europe announced a supersonic jet program that was aimed at one thing: Showing the US that Europe could build really fancy machinery. Economic viability wasn't the issue - just the dream was enough. They wanted to show the US that they were big boys, too.

And they did - heck, the Concorde was an airplane that even by today's technology would be tough to build. A 1.5 mach airplane is possible right now. But a 2.0 rocket like the Concorde is a geometric jump. Trust us - we've done the feasibility studies for aircraft manufacturers - the Concorde is a technological wonder for today, let alone the 1960s.

Yessir, the Europeans achieved their goal. They built a supersonic airliner before the US did. In fact, the US never built one. The Russians did - the TU-144, which is best remembered for coming completely unglued in the sky over the 1973 Paris Air Show.

Unfortunately, just building the Concorde was the alpha and the omega of the program. Market demand, mission viability, and economic realities weren't addressed. The result was what is now considered one of history's greatest planning disasters.

See, the Concorde had the operational economics of a flying brick. Far from being the 707 replacement they predicted, the Euros got just 16 of these contraptions built before they tossed in the towel - something that at least the French seem to excel at doing, by the way. Britain and France then effectively gave the airplanes to their respective state carriers, and dropped the whole thing.

So here we are 20 years later, and notwithstanding the success of the superb A-320 and A-340 programs, the Euros still have a bad case of US-envy. So, they went ahead and built a jet that was bigger, taller, longer than anything the US has put out. Voila! The A-380. They want to out-do the 747. What they missed is that the 747 is a 1970s concept that may not have much viability in the 21st century.

Some Reality Please. But back to the roll-out gala. The purple Kool-Aid was flowing, jumbojet fans. See, this A-380 sucker is big. Really big. So big that Virgin Airways' CEO declared that he's thinking of installing exercise rooms and casinos and all sorts of other stuff on his A-380s. Just what premium passengers want. A roll of the dice at the crap table, a spin on the Lifecycle, and a trip to the massage parlor, all surrounded by comely female flight attendants in designer uniforms.

Wow, can't wait. It'll kinda be like the Playboy Mansion, 'cept that it flies and won't have Hef wandering around in pajamas looking for a Viagra tablet. Gee that'll really do wonders to the ASM costs of the A-380. (Remember the piano lounges on American Airlines' 747's in the early 1970s? There's a reason they're not there anymore. Come to think of it, there's a reason there's no 747s, period, at AA anymore.)

Let's Get Back To Reality. There's no doubt that the A-380 will be a technological marvel. But the open question is whether Airbus can sell enough of them to make economic sense. They say gazillions. But looking at traffic flows and airport facilities, we can see, best case, 350-400 A-380s over the next 15 years. As for the initial sales announced, nobody knows what the terms were, and when over 25% of the sales are to one carrier - Emirates - one has to question how firm these sales are.

EU: Making Offers Other Nations Can't Refuse? Then we have the issue of the European Union doing the Don Corleone routine on foreign nations to buy the A-380. It's been reported that Thailand has been strong-armed, with an offer they can't refuse. Buy some A-380s, and you won't have any tariff problems with some Thai imports into the EU. Or, China. Remember that arms embargo resulting from the 1989 Tien An Men Square affair? Well, just sign on the dotted line for a fleet of WhaleJets, and everything will be okay, by and by. Don't think for one second these types of EU-government shake-downs aren't in the cards to peddle these A-380s. Remember, it isn't an airplane. It's the honor, the glory, and the reputation of all Europe that's on the line.

In the interests of historical perspective, virtually every new airliner that's come on the market since Wilbur and Orville was declared "too big" by one or more sections of the Luddite community. "Hey, how ya going to fill 21 seats? That DC-3'll never make it..." It was certainly said about the 747, and the years immediately after its introduction seemed to initially prove it. But things are very different now. The R&D costs, the total sector expenses, the capital required, not to mention the issue of airport facilities, all point to a much more limited demand for the A-380 than Mr. Chirac and his buddies seem to think.

"...the A380 superjumbo -- overweight, overbudget, but hailed by its makers as a major European feat that will reshape aviation..." Reuters, January 20, 2005.

The Concorde was supposed to reshape aviation, too.

(c) 2005, The Boyd Group/ASRC, Inc. All Rights Reserved


28 posted on 04/29/2005 10:54:22 PM PDT by hattend (Alaska....in a time warp all it's own!)
[ Post Reply | Private Reply | To 1 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson