Re: 30-year-old technology

Date:         20 Mar 97 02:34:55 
From:         matt@firstsol.com (matt weber)
Organization: 1st Solutions Inc.
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In article <airliners.1997.689@ohare.Chicago.COM>, Chuanga@cris.com says...
>A few days ago, I read a report in which a BA executive criticized
>Boeing for shelving plans to build superjumbos.  Also, he suggested
>that Boeing should have a all-new superjumbo design instead of
>derivatives based on the 30-year-old B747 design.

It was reported previously that Sir Colin Marshall was interested in the
derivative 747, Robert Ayling was reported as not interested.

In the past, new generations of aircraft offered dramatically Avaialable Seat
Mile cost reductions over the preceding generation (707 to 747). This no
longer appears to be the case.


My own belief is the underlying problem is money. I've done some thumbnail
calculations that have been 'interesting'. The first observation is that
capital cost is a surprisingly large portion of Available Seat Mile cost. I
don't claim to be an expert, but unless I have really fouled up, on a 747-400
it is about 1.5 US cents per Available Seat Mile. this is about 20% of typical
ASM costs. Based upon the preliminary cost estimates, the capital cost per ASM
on the next generation of aircraft is going to be higher, not lower. Based
upon the 747-500/600 estimated pricing reported in the press, using the same
assumption  used for the 747-400 ASM costs, produces a capital component in
the ASM cost of about 1.8US cents. The anticipated direct operating cost
improvement suggested to date are on the order of 20%, which is not very
impressive.

Given that manufacturers estimates of direct operating costs of aircraft not
yet even launched tend to be rather optimistic, the problem becomes clear. It
isn't obvious that the super-jumbo is going to offer much of a cost advantage,
and if Boeing continues to ruthlessly attack manufacturing costs on the
747-400, the operating cost advantage may in fact end up in favor of the
747-400.


If you start talking about an all new aircraft, the development costs are
going to be huge, and under current treaty arrangements, the European
Governments cannot be as generous in subsidizing these costs as they have been
in the past. I.E. Airbus ends up with a funding problem similar to  Boeing's.

I doubt Airbus can build an aircraft that has an appreciably different capital
cost than Boeing.

Until someone figures out how to build a super-jumbo that makes economic
sense, I don't think anyone is going to getting orders.

my opinions anyway.