Re: FT: Virgin interested in Superjumbo

From:         wangermn@barder.Princeton.EDU (Pablo Wangermann)
Organization: Laboratory for Control and Automation Princeton University
Date:         21 May 96 11:10:50 
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In article <airliners.1996.715@ohare.Chicago.COM>,
John Witherspoon <JW6191A@american.edu> wrote:
>Somebody wrote:
>
>>>The report also states that estimated development cost for Boeing's
>>>747-600X is $2 billion, while Airbus would
>>>have to develop an all new aircraft at a cost of $8-12 billion.
>
>I would think this means that Boeing would have to be crazy NOT to
>build the plane, whereas Airbus would be crazy TO build the plane.
>I can see the Qantas planes now -- with "Bigger Top" painted on them.
>
>A Boeing 6-fold cost advantage would seem insurmountable to me -- am
>I missing something here?

It all depends if Airbus can create an aircraft that is
_significantly_ better than a 747 dervivative so that it makes
6 to 12 times the earnings.  While the A320 has sold well, it didn't
kill the 737 or MD80 series.  However, both the 777 and A340 have
effectively killed MD11 sales (unless MD have something up their sleeves.)
Frankly, I can't see what new technology or design Airbus could apply
to a VHCT to make it that much better than a 747X, short of a
flying wing proposal (see some of Airbus' studies in the last few years)
or a decision to a make a significantly _larger_ aircraft to capture the
very top end of the market (aimed at intra-asian and a few other routes).

I think most airlines would love Airbus to develop a 747 competitor to
keep prices down and spur Boeing.  From an economic point of view, it
makes more sense for Airbus to plow the money into derivatives of
of A300, A310, A320, A330 and A340 to keep them all competitive.
(See Boeing and the 737 for a great example of how to keep a product
successful.)  Politics, however, may still strongly influence a
decision to cry to capture the "top" of the market.

John Wangermann