Airplanes vs. Airplanes

Everyone has heard of the Airbus A380 - you know, the "Superjumbo" - which is supposed to revolutionize air travel with its double-decker frame that will accommodate between 555 and 853 passengers (555 is based on a standard 3-class configuration). You may also know that the plane has been plagued by massive production delays, thanks to a complicated and political production process whereby parts of the wiring for the plane were produced in Germany, and the frame in France. When the two parts (frame and wiring) were connected, they didn't line up. Not that simple, but that's the gist. . .all because the German plant was using a different version of modeling software.



Anyway, Boeing has had the 787 "Dreamliner" in the works for a while. It's Boeing's big-project version of Airbus' A380, but it's based on a different view of the future. The 787 is a wide-body aircraft but can't nearly hold the passenger load of the A380 - the 787 will hold between 210 and 330 passengers. Recently, thanks to Airbus' production problems, analysts and writers think Boeing is poised to strike.




However, the real long-term story probably isn’t with Airbus’ manufacturing problems but rather whether clients (aka airlines) will opt for hub-and-spoke operations or point-to-point service (or maybe the two can coexist). Regardless, it seems like a more interesting story not to focus on Airbus' production problems, which should eventually be fixed, but whether or not they made the right decision to go with the Superjumbo A380 in the first place.

I was opposed to the A380 idea from the start, simply because I dread pulling into an airport along with a few other A380s, with all of us 2,000+ passengers rushing customs at the same time. I can’t wait to wait in line at the food court before taking off. . .

It also seems a little archaic to fly to San Francisco from Mexico when your final destination is Phoenix, or to Chicago from Frankfurt when you’re trying to go to Boston. The A380 reinforces the hub-and-spoke concept, not only because of the volume of passengers but because of necessary runway and gate accommodations. Runways will have to be reinforced and gates need capabilities to load and unload from the A380’s two levels simultaneously (the 747, the only other double-decker passenger aircraft, only loads and unloads from the first level). Thus, the number of airports economically capable of affording the upgrades for the A380 are few – in the US, probably fewer than 10 airports will ever see the A380 thanks to both the necessary passenger demand and airport costs associated with upgrading.

However, there are obvious benefits to the A380. First, it assists airlines in simplifying their route networks by funneling passengers through theoretically efficient airports (although ironically, large airports can often be the most complicated to navigate). Second, it allows airlines to cut costs by lowering the per-mile cost per passenger compared to the current version of the 747, the 747-400. Third, it’s an innovation; the completely double-decker aircraft excites airlines, passengers and enthusiasts alike. It actually looks different than a normal airplane, and people and companies are curious. Change can be a great thing, although there are always risk.

The argument for the 787 is indeed different because it seems the 787 is a new strategy in long-distance travel. The 787 can connect mid-sized airports with locations overseas. Although smaller, the 787 has a range farther than the A380 (up to 8,800 nautical miles, compared to the A380’s 8,000 nm). Thus, instead of flying from Houston to Manila, stopping in L.A. to board an A380, customers in Houston could fly directly to Manila aboard the 787. The 787 also allows airlines to cut costs by being the most fuel efficient airline made, and Boeing touts its new composite (instead of metal) frame will cost less to maintain and repair.

A new option

Boeing, smelling blood from Airbus (whose first A380 is delayed at least two years) recently introduced its newest 747, the 747-800 (first delivery not for a few years). By incorporating the new engine design engineered for the 787 and by making the plane larger, the 747-800 now is more fuel efficient, emits fewer emissions, has a range equal to the A380 (8,000 nm), and can carry 467 passengers (assuming a 3-class configuration), more passengers than any of its previous versions. 467 is a significant number: it is only 83 passengers less than the A380’s capacity. This newest 747 was originally thought only to attract freighter orders, but Lufthansa recently put in an order for 20 passenger versions and it's thought other airlines, troubled by Airbus’ delays, may switch some of their orders. Over 70 orders have been placed for the 747-800 in 2006, the most orders for any 747 since 1990.

Final thoughts

The A380 will be put in service and tested, and will certainly coexist for some time with the 787. But Airbus may have staked too many eggs in one basket: while the A380 will be great at hauling massive amounts of passengers halfway around the globe, Boeing’s 747-800 will be there to compete in a market it has been familiar with since 1969. In addition, Boeing’s 787 will be flying around the globe with fewer passengers to more specific destinations that asymmetrically competes to the A380. Further, the 787-3, set to be released in 2010, is a shorter-range version that directly competes with Airbus’ shorter-range aircraft. The new efficiency and technology of the 787 makes both Boeing’s and Airbus’ mid-distance planes (like the Boeing 767) look like (albeit reliable) dinosaurs.

Boeing has the upper-hand now thanks to an Airbus production problem. But they may have the upper-hand for the next decade because Airbus has a vision problem. Hopefully Airbus can regain that vision, because when only one company dominates a market everyone (save that company’s employees) loses.

See the New York Times, “Far From Extinct” by Leslie Wayne on 12/7/06
http://www.nytimes.com/2006/12/07/business/worldbusiness/07boeing.html?_r=1&oref=slogin