Re: Fracturing the Pacific

Date:         27 Aug 97 03:57:53 
From:         Bob Mann <rwmannco@interport.net>
Organization: R.W. Mann & Company, Inc.
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Karl Swartz wrote:
> >> Considering the benefits of twins, would investing in a bit of concrete
> >> not be advantagious by the airlines with large Asia-America traffic?
>
> >If we were in the early "facilitation" age of aviation, a la Pan Am
> >Clippers paving the way across the Pacific, I'd say yes, but with the
>
> >economics of today's industry, no.  Given the expected low utilization
> >rates of these facilities, there is no non-safety related return on the
> >investment, by either airline or public entity.
>
> I disagree.  I know various countries, including Russia and China,
> charge for flying over their airspace.  Tomorrow's Wall St. Journal
> (Wednesday, August 20) just happens to have an article on p. A16 (in
> the Western Edition) titled "Air Santa? Siberians Are Seeking Pie in
> the Sky By Marketing Routes to Asia Via the North Pole" which has some
> real numbers.
>
> That article says "the Russians charge an estimated $1,800 a flight
> for the limited flights they allow in an effort to get hard currency"
> plus extra "royalties."

Let's not confuse enroute fees, which are standard world-wide now
proposed in the US and defray ATC operating and upgrade costs with fees
to create and maintain "brick and mortar" airport facilities
investments.

And, for this to be a viable commercial alternate, we are talking more
than ILS and pavement:  all the various governmental (FIS equivalent)
and airport ground services and logistics/hotel services that carriers
would rely on.  Figure Bangor, ME as the rough minimum requirement.  The
investment required for the landside portion of the minimum facility
requirement is a multiple of the airside.

Again, and with all due respect to your in-the-money routing comments,
reinforced by today's WSJ article, given the low utilization of these
facilties I still can't see thge viability of such an investment.

Further, I can't see any carrier agreeing to a precedent of regional
aviation authorities charging enroute fees for ground services; the "me
too" stampede to charge such fees would be audible over the jet blast of
carriers fleeing the sectors where the fees are charged.  Instead of the
estimated 18 minute breakeven shorter flying time, we're talking a
multiple of this required savings.
--
- Bob Mann
  R.W. Mann & Company, Inc.
  Airline Industry Analysis and Consulting
  Port Washington, NY  11050  USA
  office 516-944-0900, fax-7280, mailto:rwmannco@interport.net
  http://www.interport.net/~rwmannco/