Re: Why a new super-jumbo isn't going to be built anytime soon.

Date:         23 Apr 97 02:58:16 
From:         tassio@watson.ibm.com
Organization: IBM T.J. Watson Research Center
References:   1 2
Next article
View raw article
  or MIME structure


Malcolm Weir <malc@mci2000.com> wrote:
>British Airways COO Dr. Alistair Cumming stated in a conference in LA
>that "BA is committed to the need of aircraft larger than the 747
>because of the approaching saturation of airports(...)

Look at these airports which are approaching (I mean, are past) saturation
and the situation of competition around them.

Start with London Heathrow. Fifty percent of traffic coming from North
America into it on BA is connecting. Why don't these folks connect
somewhere else? Because (i) BA got a lot of frequency (ii) BA got a
good product and (iii) BA got the most comprehensive network of any
airline in Europe. Will BA always be in this comfortable position? Nah.
There is NW-KLM eating up the connecting traffic. There is UA-LH,
with LH's network measuring up to BA's. Hopefully some day AF will
also get in the fight. That's why BA wants American - without the
alliance they won't be able to keep their market share. If the upcoming
competitors push for a lot of frequency, they'll forget the large
capacity plane. Running three large capacity planes between Dallas
and London won't be competitive compared to LH+UA having twice
as many 777s doing Chicago-Frankfurt. BA will be forced to develop
into airports other than Heathrow (and Gatwick).

HongKong & Singapore. After HongKong gets a new airport, the
situation won't be solved but it will improve. Meanwhile, the
infrastructure in the area will improve too. There will be a huge
airport in Malaysia and a lot of airport construction is going on in
Southern China. The pressure will be off.

Tokyo. Japan is the only place where I don't see airport
constraints being relaxed. The competition will come from Seoul.
Using a huge new airport, airlines in Korea will connect the
Japanese to secondary airports. Korean already serves 12
destinations in Japan.

In general, a lot of the traffic in crowded airports nowadays
is connecting traffic. This is fickle traffic, which will end up
partly spilling to neighboring facilities. The BA COO even
mentioned that BA pulled out of the 747 stretch when the
costs became unatractive. If saturation were really the problem
they'd go for even a slight improvement on seat-per-mi costs
over the 747-400.

The hardware-software analogy needs an additional element to
hold. The traditional hardware (mainframe = 747-400) needs
the cheap competition to knock out the aquisition cost.  Now I'm
trying to figure out the airplane equivalent of a PC.
Tassio