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

Date:         30 Apr 97 03:19:10 
From:         "P. Wezeman" <pwezeman@blue.weeg.uiowa.edu>
Organization: The University of Iowa
References:   1 2
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On 15 Apr 1997, Malcolm Weir wrote:

> The change here, though, is predicated on the fact that contemporary
> aircraft are extremely efficient... BUT the realities of ground
> handling are beginning to take their toll.
>
> British Airways COO Dr. Alistair Cumming stated at a conference in LA
> that "BA is committed to the need for larger aircraft than the 747
> because of the approaching saturation point of airports and the
> infrastructure.  Only one thing can help the industry grow in this
> context, and that is larger aeroplanes.  The industry cries out for
> more efficient use of flights and slots by the provision of larger
> aircraft".
             ----snip----
> It seems to me that the real unknown in the equation is whether the
> growth of hub by-pass and point-to-point routes was a result of market
> demand for such services, or a result of an inability to supply an
> effective hub-and-spoke operation within the constraints of capacity
> controller airports.
                 ---snip---
   I think that hub and spoke route systems are themselves a cause of
airport congestion. They require that many flights converge on a single
airport in a short time. Hub-and-spoke operation is an example of how
the interests of airlines and passengers are not in complete alignment.
The passenger wants to fly from place to place, and the airline wants
to provide that service, but for a given profit margin, the airline can
equally well either fly more passengers, or fly the same number of
passengers a greater distance. An airline has no inherent objection to
flying from Boston to New York via Chicago is the passengers are willing
to pay for the seat miles involved.
   A hub-and-spoke system is very good for connecting many points where
no origin-destination pair has enough traffic to justify a direct flight.
Hub-and-spoke operation is the keystone of Federal Express and its
competitors. But it is not for everyone. Take the hypothetical example
of Antarctica. Suppose we wanted to set up airline service between each
of the coastal research bases on that continent. Ignoring the difficulties
of servicing planes at one hundred degrees below zero Fahrenheit (I have
read that sixty below zero at the coast can feel colder than one hundred
below at the south pole because the air is denser and more humid) we could
route each flight through the south pole station. Each day a jumbo jet
leaves each base and makes a round trip to the south pole, where
passengers change planes. Suppose there is no more than one half a
jumbo-load of traffic between any two bases. But suppose we have a plane
half the size of a jumbo, with 50 per cent higher costs per passenger
mile. For flights up to about halfway around the continent, the smaller
plane would be the same cost or less than the jumbo because of the shorter
distance resulting from a direct flight versus a dog-leg route, and
would also have the advantage of time savings.
   Given that we have hub-and-spoke systems connecting all cities, the
efficient thing to do is to put in a direct flight with a suitably sized
plane for all city pairs with enough traffic. Naturally, we could also
add flights with one or more intermediate stops where this would also be
a net advantage over a flight through the hub. In marginal cases, individual
passengers would make choice between faster direct flights and cheaper hub
flights based on the comparative value of money and time to them.
   Now that we have efficient regional jets that are accepted by the
public, we should see more direct and near-direct flights and less
reliance on hubs. This seems to be what is happening. The major hubs will
handle flights between low traffic city pairs and flights where the route
through the hub is reasonably direct. Also, a person leaving a given city
does not have an equal probability of wanting to go to any city in the
whole country. Rather, most travel is to cities no more than 600 miles
away. For this reason, we may see the development of regional hubs which
would handle most of the non direct route traffic.
   To the extent that airport capacity is limiting long range traffic,
we should start to see older B747's being taken out of storage and
replacing the twin engine planes that do the bulk of the transatlantic
flights. The lower seat mile costs of the twins would be offset by the
greater total revenue from the bigger plane.
   I agree that Airbus needs a 747 sized plane to be a full-line
competitor to Boeing, and it might as well be somewhat bigger. This is
separate from the question of whether the world needs it.

                        Peter Wezeman, anti-social Darwinist

                             "Carpe Cyprinidae"