Unlike this time last year, probably not much. There was some momentum for change last year that really doesn’t exist this year. Airlines will continue to fight to hold their own in the marketplace and with the reduction in capacities, even the worst of the lot will likely cling to life this year.
North America:
Major airlines of North America have made all the changes they can and all are managing their businesses and cash very closely right now. I don’t expect much, if any, change to develop in the next 12 months but let’s take a look anyway.
American Airlines has some labor issues to address but with the current economic climate, they have been getting away with their efforts to defer those issues. Labor unions would like to push a few issues with American but they’re smart enough to realize that now isn’t the time. Most likely they’ll continue their face saving efforts at making a point with their members but I don’t expect any real labor action at this airline this year. Perhaps, if things get better, we’ll see some movement in the 4th quarter.
United Airlines, my least favorite legacy airline, has similar issues that American has with labor but, again, those labor issues aren’t likely to see much movement either. I suspect that United will continue to move more of their flights over to regional airline partners because its worked (for now) and their customers will find themselves on more and more regional jets. Since price is the prime driver for customers right now, they’ll accept that move and hate the flights as much as they always have.
Delta/Northwest should see more of its operatioins combined and, possibly, a unified single operating certificate by the end of the year. That doesn’t mean much for their customers since Northwest aircraft are being painted into Delta colors at a furious rate. The service product is already being harmonized to a fair degree and it’s a good one already.
I don’t see any major aircraft purchases and I remain interested in whether or not they’ll keep their 787 orders. There has been rumour and innuendo that they won’t but I kind of think they will keep them. Their 767 fleet is old (except for the 767-400) and I can’t think of a reason why you wouldn’t want to have the 787 begin filling the role of those aircraft. I’ve wondered if their hints aren’t just an opportunity to get Boeing to get interested in offering a better deal for more aircraft.
US Airways needs two things in this next year. First, they need their pilots to get together and start operating as a single group. As dangerous as it is to try to interfere with a union group, I wonder if US Airways won’t wade into the problem in an attempt to have a final resolution. Certainly they could argue that they’ve been patient enough.
They also need to manage their cash very, very closely. Cash is blood to an airline and US Airways has a bit of risk in this department. Should cash holdings be depleted more, they’ll have to start seeking that merger partner again and no one appears interested in marrying with them. This is another reason it needs resolution for its labor problems. That said, I don’t see US Airways disappearing or filing for bankruptcy again.
Continental Airlines has felt the hurt this past year and its unlikely to feel much better this year. Their business model depended a bit more on business class travel and the economy hurt that demand the most. That said, I can’t imagine a better group of managers for keeping that airline on track through the rest of the downturn. Things will hurt and belts will be tightened a bit more but I don’t see the service product changing. When the economic downturn does really turn the corner, Continental will be better placed to succeed than many.
Despite their recent move to the Star Alliance, I do *not* see Continental getting any closer to United Airlines whatsoever.
Low Cost Carriers / Regionals:
Southwest Airlines continues to manage itself to the tune of its own drummer and the results of their long(er) term thinking are showing left and right. They’ve managed to make solid overtures to business clientele in areas that, I suspect, count more day in and day out.
I don’t see a merger partner in the future for them except, possibly, for Sun Country Airlines. For some reason, I see this as a real winner for Southwest in that it gives them space and routes in Minneapolis / St. Paul, a labor group that is accustomed to delivering Southwest style service and which can be harmonized into the Southwest labor groups relatively easy. There is no rumour of this purchase but Sun Country has its own problems and it’s a match that fits the Southwest acquisition model.
I think Southwest will remain persistent in its Denver expansion and will work hard to create a network in the upper midwest states of Wisconsin, Minnesota, Illinois and Missouri. The wild card, in my mind, is the Washington D.C. area and the NYC/Boston areas. Shuttle type service is what Southwest knows very well and I wonder if they won’t try very hard to organically grow their flights in these areas. If so, Southwest needs to find an “in” at Washington Reagan airport. To do this, they would need to buy a shuttle operation from US Airways and/or Delta. Perhaps US Airways will be interested in such a sale if their cash holdings erode more.
Frontier/Midwest/Republic: I don’t know what happens here. Midwest really isn’t an airline anymore. It really isn’t even a brand anymore. It’s a name for selling tickets. Frontier remains an airline and a brand and Republic seems to want to continue caring for both. Since Republic is managed by very smart people, I kind of think that they may look for a way to wind down the Midwest name over the next 12 to 18 months and make Frontier the primary airline. A tasty cookie isn’t a good reason to keep the Midwest name around.
Airtran deserves some applause. This airline has managed to grow itself some, find new markets and earn some money during one of the worst downturns in the airline industry.
Their move into Milwaukee has succeeded and promises to continue to succeed. Milwaukee is a loyal city, to be sure, but it is a city that appreciates value even more. Airtran has managed to offer great value, good service and appeal to a city that just a couple of years ago was kind of anti-Airtran. The one obstacle in their way is the arrival of Southwest, another airline very good at offering value and appealing to the Milwaukee kind of customer. I think Airtran has the upper hand but they are by no means the sure winner in this market. Southwest may be able to beat them with frequency.
Virgin America keeps showing up and usually right after I become convinced they’ll disappear. I still don’t know what this airline does best and I still don’t see them as being a scrappy enough operation to fight their way into the cities it needs to be in. Virgin continues to dance around Chicago (claiming they can’t get space but if they wanted it bad enough, they could). Their product would servce cities such as Dalllas, Denver, Houston, Chicago, Atlanta, Baltimore, Philadelphia, and, perhaps, Cleveland/Cincinatti very well.
Instead, they added flights from the west coast to Fort Lauderdale and talk about adding service to a Texas city such as Austin. This is too timid. The CEO, David Cush, seems afraid to compete against his old employer (AA) and that is a shame since they have a very competitive and attractive trans-continental product. I would speculate on VA being bought by another airline but . . . why? They just don’t have much there and seem to have little interest in exploiting real advantages that they do have. Maybe they’ll just run out of money and get shut down.
Alaska Airlines has felt the heat from Virgin America but they continue to do pretty well with their little airline and they continue to do it without being aligned with a major. I don’t see much changing for Alaska Airlines. They’ll continue to be a scrappy airline with good service to a limited number of destinations. And, somehow, that seems OK when it comes to Alaska.
The Boeing 787 and Airbus A350xwb are commonly compared to each other over the past few years but are they really similar aircraft?
In one sense, yes, they are. Both aircraft make substantial use of CFRP for instance. Boeing makes the fuselage of the 787 as a full “barrel” and Airbus plans to use CFRP panels using an more conventional structure underneath. Both will also use similar engine and engine technologies although Boeing is using a system that eliminates “bleed air” from its systems for the first time while Airbus retains it.
They are both aimed at the medium to long range market although Boeing’s 787-3 (if it ever comes to fruition) is aimed at domestic markets primarily in Japan with a planned range of about 3000 nautical miles maximum. When the introduction of this aircraft was delayed in favor of the 787-8 and 787-9, Japan Air Lines transferred its orders to the 787-8 and All Nippon Airlines reduced its order and transferred the remaining to the 787-8. Ultimately, I suspect this aircraft may be developed to offer trans-Atlantic, US transcontinental and Japanese domestic capability. That would mean a range increase of probably as much as 1000 nautical miles which would still be 1500 or more nautical miles less than other 787 models.
Both were initially introduced as 3 models. Boeing has firmly offered the 787-3/8/9 and Airbus has firmly offered the A350-800/900/1000. However, the variants of each manufacturer do not match up one for one.
The 787-3 and 787-8 will be a bit smaller than the first A350-800 model. Instead, Airbus targeted its A350-800 model to match up against the 787-9. The A350-900 and 1000 more accurately match up against the Boeing 777-200/300 aircraft.
What drove the development of each of these aircraft is more important and shows the difference. Boeing needed a replacement for both the 767 and the 757. Those models were more than 20 years old and had issues with continuing to be capable aircraft for airlines. The 767 was unable to carry cargo competitively with the A330 and A300 Airbus models and its engines were becoming fuel inefficient for many routes. The 757 had morphed to a medium haul / trans-Atlantic model but didn’t quite have the legs to reach Europe except from extreme East Coast destinations.
Boeing already had the 777-200 which filled a gap between its 747-200/400 models and it didn’t need to replace it since the 777/200ER was quite young and it had the 777-200LR coming online shortly. It needed an aircraft that was capable of carrying a passenger load from 230 to nearly 300 with a full cargo load on at least medium range routes of 5000 nautical miles or more.
In addition, airline trunk routes were fracturing so it needed its next aircraft to be capable of flying much longer routes so the new aircraft had to be capable of flying routes from 5000nm to 8000nm efficiently. Something that the 767 wasn’t capable of and the 777 wasn’t very suited to capacity wise for the shorter ranges. So Boeing defined the 787 to fill that gap.
Airbus was faced with a different problem. The A330 was and is still a strong seller and an excellent competitor for the 777-200 on medium range routes. It had the A380 coming online as a competitor to the 747 which left a large gap between the A380 and A330 because airlines had never really bought into the A340 model line. The A340 was an inefficient competitor to the 777-200/300 line of aircraft because it used 4 engines (as opposed to 2 engines) and possessed a fuselage that was slightly too narrow to be stretched for more capacity without other problems cropping up.
What Airbus didn’t have was a real 777 competitor and that’s what it needed. After going through several definitions of the new aircraft, it arrived at the A350xwb. The A350xwb-900/1000 compete directly with the 777-200/300 models in capacity and range. However, where customers are already seeing a deficiency is in cargo capacity.
Although the A350 is not yet completely defined, it appears that while it may have lower costs per available seat mile, the 777 will continue to be able to lift and carry several tons more cargo in addition to its passengers. In real world operations, the two may be very even competitors unless and until Airbus is able to offer higher thrust engines (100K pounds of thrust or better), this deficiency will remain. Currently, Rolls-Royce has shown some willingness to build to that thrust capability (borrowing on their engine technology for the 777) but GE has shown no interest in developing a new engine using GEnx technology to meet the specifications of Airbus’ A350-1000 model leaving a large gap. GE sees such an engine cutting into its current customer base on the 777. Current 777-200LR and 777-300ER models have GE engines capable of 110K and 115K thrust respectively.
Both models promise to be excellent, successful aircraft because they fill needs for each manufacturer’s customers. Both brands needed those models to fill very important places in their lineups. Even airlines see these aircraft as more complimentary than competitors as evidenced by many large airlines ordering both models.
The Boeing 787 promises to be successful with US, European, Japanese and, possibly, Australian airlines. South American airlines will likely follow in 5 to 10 years. This aircraft will serve airlines whose routes are either long and thin or those that have high frequency.
The Airbus A350 will serve routes that are fat and long primarily and will likely be used by airlines based in the Middle East, South East Asia, India, Australia and by some in Europe. This aircraft is more a trunk route airliner that will serve routes with lots of density, low to medium frequency and of 5500nm distance (at the least).
It is notable that Airbus faces an issue that Boeing doesn’t have with the 787 and that is customer base. Nominally, both companies have a healthy order book for each respective aircraft. The 787 has well over 800 orders and the A350 has well in excess of 500 orders. Both have an average of 15 orders per customer even. However, the customer base for the A350 is really quite a bit more narrow than Boeing’s.
Airbus has roughly 505 orders for its A350 aircraft line up and of that, the only truly significant large quantity orders come from a few airlines based in the Middle East or South East Asia. More than half of those orders (284) are attributed to just 13 customers from Africa, the Middle East and South East Asia. Of those 13 customers, 7 customers should be considered as somewhat dubious in light of the present world wide economic climate in the airline industry. Of the remaining 6 customers, 3 airlines and one leasing company (Emirates, Etihad, Qatar and DAE Capital) account for 205 of those orders. The A350 will need to find a wider customer base for all its models to reduce the risk the order book currently has. Those three main airlines are each based in the UAE (United Arab Emirates) and while successful today, have dubious opportunities for their continued growth over time.
Boeing’s order book is stretched more evenly across airlines of the world and on most continents. While Boeing does have some dubious order holders, they are fewer overall and comprise a vastly smaller portion of the order book both percentage-wise and in total orders. Boeing has much less risk in its order book.
Boeing should begin deliveries to customers in the 4th quarter of 2010 or about 10 months from now. With a second production line expected to come online in 2 to 3 years, Boeing is well placed to fill its orders and have enough production slack to fill new orders from major airlines. Within the next 2 years, expect to see the 787-10 defined and design work begun. The 787-10 will likely be a 777-200 competitor in some respects but it also allows Boeing to define a new 777 or replacement model that reaches further upwards in capacity in the future.
Boeing’s next moves are likely to be, in order, the 787-9, the 787-10 and then either a refresh of the 777 model as a next generation enhancement with extensive use of composite materials, new engine technology and likely following a systems approach similar to the 787. If it isn’t a refresh of the 777, it will be a new model to replace the 777 with capacities just above the present 777-200 and finishing with capacities a bit past the current 777-300. A 737 replacement should follow once that 777 issue is nearing production.
Airbus currently has the A330 and plans to continue production for several more years. However, Airbus is due to be left with two serious gaps. First, the gap between the A321 and the A330 which nominally should be filled with a 787 competitor. This is likely where Airbus goes next but not before 2015 or later. Then, Airbus also has a bit of a gap between the A350-1000 and the A380. This gap really isn’t so important for the next 10 years but its one they’ll have to watch since Boeing will be positioned to offer a right-sized aircraft in that market in the form of a 777-refresh, 777 replacement and their about to be introduced 747-8i. After filling the A321/A330 gap, Airbus will likely go to work on their A320 series replacement which, I suspect, will be sized at slightly larger capacities than the current A318/319/320/321 lineup.
For more than 10 years, much has been made of the “launch aid” given to EADS/Airbus for producing new aircraft. A recent preliminary WTO (World Trade Organization) ruling has said that the aid given for launching and producing the A330 was illegal.
Europe/Airbus has prosecuted a counter-claim to Boeing stating that the tax incentives given by both states and the federal government as well as defense industry contracts illegally aids Boeing.
To a lot of people, it seems as if both sides have a point. To Louis Gallois, CEO of EADS/Airbus, it certainly seems that way. He’s actively pursued independent negotiations to settle the issues away from the WTO. Boeing, on the other hand, has remained steadfast.
Like a lot of conflicts such as these, there are valid points on both sides. I think the best way to look at the issue(s) is to test them according to a standard of transparency and economic competitiveness.
Airbus actively competes with Boeing around the world and does a fine job of it as well. There is no doubt that their aircraft are world class and quite capable of competing in the marketplace against Boeing’s products. An airline who buys Airbus isn’t putting itself at a disadvantage.
It’s how Airbus got there that rankles most. Originally a state financed consortium of aerospace manufacturers, Airbus received open funding from national governments to produce aircraft. Ordinarily, this tends to be a bad idea since the product produced is often not market competitive. That certainly wasn’t the case with Airbus’ products. They sell on features and capability. The A320 series can be considered the equal of the Boeing 737 series. The same is true across the line.
It was important to Europe to find a way to continue building airliners and there is a good argument that the rise of Airbus has kept Boeing (and, previously, McDonnell Douglas) honest. I would certainly agree with that. Indeed, one could say that the demise of McDonnell Douglas’ commercial aircraft business was due, in part, to the rise of Airbus since MD found it very difficult to compete against Airbus’ aggressive pricing strategies in markets where McDonnell Douglas was the legacy supplier (Europe and parts of Asia as well as the United States.)
The line was crossed when Airbus didn’t transition to a self financing entity as the A330/A340 aircraft were being developed. Airbus didn’t have to go to the market to borrow money, they went back to the respective European governments for more “aid”. And the biggest part of the problem is that the aid wasn’t exactly required to be paid back. The conditions were that *if* Airbus sold that line into profitability, the governments would start receiving a portion of those profits.
That’s a big if. Indeed, the current Airbus A380 program points to the problem with such a murky requirements. This is an aircraft that, at best, has an extremely limited market and continues to struggle even with low volume production. Deliveries are massively delayed and Airbus continues to depend on orders from a relatively few airlines to support the production. At the same time, there is no pressure from the financial markets and/or shareholders to justify the production with potential profits. Lacking that pressure, Airbus continues with a program that could never last in the United States.
The same was true for the A330/A340 program. While the A330 is an unqualified success, the A340 never was. The problem with this program is that the A330 succeeded not just on capability but price. Airbus didn’t have to pay the rent on the money it borrowed to develop and sell the aircraft and was able to offer a capable aircraft at a price competitive with the Boeing 767. It’s notable that, in many respects, it should have been competing on price with the Boeing 777 instead.
In the United States, it’s true that we do support our manufacturing base with certain tax incentives. However, it is notable that while Boeing might not have kept its production in Washington state, its laughable to believe it would have traveled outside of the United States. Those tax incentives merely kept production where it was inside the US and even those incentives no longer seem to be enough. Witness Boeing setting up a second production line for the 787 in South Carolina.
When Boeing needs to raise money to launch such a venture, it has to go to the international capital markets and borrow money. Boeing must pay market interest rates for that money and, most importantly, it must make a solid case for the product they want to produce and its potential profitability. I assure you that capital markets are an unforgiving place and without justification for their request for money, no one would loan it to them.
Boeing does receive research and development funds for defense work that does contribute to its body of knowledge for building commercial aircraft. Boeing’s capability in manufacturing CFRP (Carbon Fibre Reinforced Plastic) derives from such defense programs. However, there is a difference in how Boeing gets those funds.
Boeing must compete with a number of aerospace companies for those funds and justify its ability to deliver. Those aerospace companies are largely US based but also include companies from Europe such as BAE, Airbus and others. In order to receive that funding, the companies must make a financial case for them being the best to receive funding and if those companies prove incapable of delivering results on a funded program, it usually is terminated by the government. The US Defense Department doesn’t just continue to fund a program for the sake of funding it.
The difference in these arguments about illegal funding between Boeing and Airbus is really about transparency and competitiveness. Boeing must be transparent and routinely demonstrate to the markets and the US government that it is not only doing what it said it would do but also succeeding in the world market place. Airbus, on the other hand, answers to governments whose prime interest is in supporting an aerospace industry and has yet to have to justify itself to the world marketplace.
I suspect that if the European governments involved in Airbus had adopted a hands off approach with the A380 program, the US government and Boeing would have declined to pursue a WTO case against Airbus. I think some sort of arrangement would have still been possible if Airbus had justified their new A350 program in the world marketplace but they once again gratuitously accepted launch aid from governments who brazenly offered it in spite of their pledge to be fair participants within the WTO.
Both France and Germany have been particularly bad in their behaviour on all things Airbus. National leaders of both governments have been known to fly to countries where Airbus is competing for a sale and nakedly pitch the Airbus product as a national interest priority and make the sale with inducements such as defense sales and other side trade agreements. The United States has been known to flirt with this but never has engaged in such open pimping of their own industries.
The KC-X tanker program is the next battlefield. Pitched against the DoD’s desire to have a real competition for the program (there are only two remaining manufacturers in the world capable of producing the aircraft: Boeing and Airbus) and the fact supported case that the Airbus A330 derived tanker was and continues to receive state sponsored support and aid.*
What happens? The United States has a decision to make in the next 2 to 3 years. It either aggressively stops the unfair trade practices of the European governments (primarily France and Germany) or it must decide to fight fire with fire. Wisely, the US government wants to avoid having to resort to the same tactics to support the US aerospace industry because they know the consequences are potentially very bad. Competitiveness in our aerospace industry is, quite literally, what has kept us on the top of the hill when its comes to our nation’s defense.
Those same European aerospace industries supporting Airbus, also participate in the US defense contracts and have become essential to the US defense. Companies such as BAE Systems are now prime contractors producing for the US and to ban them from competition is both bad for the US as well as the US industries. Such is the web a global marketplace produces.
My guess is that the US will seek to defend its ground by offering even more support to businesses and governments around the world in the form of low cost or no cost financing. US Trade Representatives will be empowered to offer better and better terms to facilitate those sales and its hard to compete with the financial might of the US government.
Until the US starts to aggressively combat EADS/Airbus and their supporting governments, the practices won’t stop. Those governments have always pursued such policies and have never stopped engaging them until it became unprofitable to do so. There is no historical precedent for them to play “fair” with, possibly, the exception of the UK.
* Nominally the KC-X tanker program is a competition between Boeing and Northrup Grumman. However, Northrup Grumman essentially is the “front” for Airbus where Airbus will produce the base airframe and Northrup Grumman will do the conversion modifications in Alabama. NG and Airbus have promised to ultimately produce the A330 in Alabama after the first 20 or so airframes are built. However, the A330 airframe isn’t that much younger than the 767 and the market for the aircraft is already quickly diminishing with the rise of the 787, A350 and even the 777. The idea that a single tanker program could justify setting up such an assembly line without commercial demand is far fetched at best. It’s a promise that is easily taken back after production started.
It’s been two days since the 787 took flight for the first time and it certainly was one of the most anticipated first flights of an aircraft. Anyone who has followed the development of the 787 program certainly knew that it would indeed be a special aircraft and no one would doubt that there is a lot of promise in it.
Although I’ve seen countless photographs of the first aircraft, ZA001, I was pretty surprised by a couple of things. First, the wing flex. All the promotional photos for the airplane showed it but , intellectually, I didn’t believe it would look like that. But it was, if anything, even more dramatic than renderings in my opinion.
Second, if you saw video of the take-off, how about how they time the chase planes? Those T-33 jets were just the right whipped cream for that take-off.
At some angles, the 787 reminds me more of the 757 than the 767. At others, it reminds me of the 777. Those huge Rolls-Royce engines throw me off because they are much larger in proportion to the airplane than any other common aircraft. They look larger than the 777 engines (but aren’t.)
Here are two the better videos I could find of the take-off:
I genuinely look forward to seeing that airplane land at DFW airport one day.
One note: My wife and a couple of friends commented on the fact that all photos of the plane show its landing gear extended. Typically the landing gear is left deployed on a first flight simply because it provides a little extra margin of safety. Most likely, the gear was left deployed the entire first flight or, at best, cycled once and then left deployed again. As the testing continues, the gear will be retracted and the normal “envelope” of handling for the aircraft will be found through more and more tests.
The Associated Press is reporting that United has decided to order (25) Boeing 787-8 and (25) A350-900 aircraft with deliveries starting in 2016. Options for 50 additional aircraft (of each type) are also included.
The order isn’t a surprise in that it has been commonly known that United was considering a purchase. Even the split between types doesn’t really come as a surprise. United Airlines is already an Airbus customer and United Airlines is *not* a party to the gentleman’s agreement to buy only Boeing aircraft. American Airlines, Delta Airlines and Continental Airlines are parties to that agreement which gives them access to early positions on the production line(s) and preferential pricing. That is how AA managed to land early delivery slots when they made their order for the 787 earlier this year.
Some will be surprised that United didn’t buy more 777 aircraft but I’m not sure that would have made sense for them. They don’t necessarily need the cargo lift that a 777 offers and, frankly, this order wasn’t for 777 replacement aircraft. These aircraft will replace 747s (with more frequency) and 767s (one for one) as United retires those two types from its fleet.
I suspect United decided to not keep all their eggs in one basket and chose the A350 because it would be newer and more efficient for the type of routes United serves. Nothing more, nothing less.
Lack of a firm offering for the 787-10 is starting to become visible. This is the dawn of that omission and it will be a glaring one in another 12 to 18 months. Airlines would like to have some confidence that they can purchase a fleet that spans the three basic types for various missions and which doesn’t require a different pilot rating for each type. Confirming the 787-10 and preparing an offer to airlines wouldn’t be an unwise thing on Boeing’s part.
That isn’t a big surprise to most readers of this blog and one very good reason why I’ve said little about the event. Despite the long program delays and disappointing news of certain developments about this aircraft, I remain extremely excited about this aircraft. Perhaps for different reasons than most, though.
Mainstream press continues to speak about the 787’s increased comfort potential for the passenger and sometimes mentions the efficiency the aircraft will offer airlines. All that is true but it excites me for different and more specific reasons.
First and foremost, it is the first truly new aircraft to come from Boeing since the 777 made it’s first flight in 1994. Since then, there have been improved variants of the 737, 767 and 777 introduced but this is the first “from scratch” aircraft to show up in 15 years from Boeing. That is exciting to me.
One of the most disappointing results from the Boeing / McDonnell Douglas merger is that, in many respects, Boeing was taken over by McDonnell Douglas managers rather than the other way around despite the fact that, for all intents and purposes, it was really a Boeing takeover of McDonnell Douglas. Since that merger, Boeing has been much more intently focused on developing its defense businesses almost at the expense of investing in Boeing Commercial Aircraft. That has been disappointing and a bit perplexing to me given Boeing’s ability to build fantastic aircraft for the commercial world.
So I hope that this aircraft, the 787, represents a return to innovation and development for Boeing Commercial Aircraft. I hope that a new, younger group of managers is being born from this program that will lead Boeing’s development of new aircraft such as a 737 replacement, a 757/767 replacement and, yes, a new 777/747 replacement too. But I remain concerned if for no other reason than Boeing seems to be ignoring new competition from Bombardier and EMBRAER who are now challenging the 100 to 130 seat domestic segment in the US and elsewhere. If Bombardier can build its new C-Series aircraft with union labor in Canada, Boeing should be more than capable of developing a new family of aircraft to compete against those two companies.
While the first flight is truly on track to happen in the next two weeks, the burning anticipation of that first flight has, if anything, died down in many respects. Those who have followed it tortuous path to first flight recognize that it isn’t the first flight that means anything now. The aircraft is so mature in its development that we know it will not only fly but fly very successfully. We know that the major teething problems are almost certainly over now. There isn’t any need to speculate on its performance on a first flight and really nothing to wonder about for its testing over the next 12 months.
The real anticipation comes from seeing it perform with an airline. We want to see it enter an airline’s fleet and see how it performs during real world use. We want to see if airline CEOs proclaim it the game changer we all ferverently hope it is. We even just want to see what the airlines’ liveries will really look like on it. The real next “moment of truth” for the 787 is when it enters a fleet in its new livery. The launch customer is All Nippon Airways (ANA) and we should see ANA put the 787 into service sometime in late 2010.
The 787 should see service with a US airline in late 2010 or early 2011 and it will be Delta Airlines who has the honor by virtue of inheriting Northwest Airlines’ orders. I suspect we’ll see Delta order more shortly after the 787 begins operating in its fleet. Continental Airlines will put the 787 into service a short while later.
This is the most anticipated large volume aircraft to be designed and built since the 1960’s. That’s exciting.
What’s also exciting is what this aircraft means to Boeing and its future development projects. Will these same technologies be used on a 737/757 replacement? Is it conceivable that they’ll be used for a Very Large Aircraft to replace the 777? Both are possibilities. Detractors say there isn’t as much “gain” to be had in using carbon fibre based fuselages for a 737 replacement with respect to efficiency and that is probably true.
However, these new techologies may mean that Boeing can produce the 737 replacement even faster. The composite carbon fibre fuselages may mean less maintenance and longer maintenance intervals for airlines like Southwest and Ryanair. The new engines coming into development will demand some changes too. Larger by-pass ratio engines or, if developed, open rotor engines means more clearance will be needed between the wing and the ground. The next aircraft will have to stand taller and that might mean a little more time spent on ground handling.
The next generation engines and Boeing decision to produce an “electric” airliner may see those approaches used in the 737 replacement. Have we reached a point in reliability that we can expect these new systems to survive the punishing schedules of a domestic airline? I think so but the 787 is the aircraft that must support that supposition.
The 787 won’t be exciting because of what it potentially offers the customer in comforts. Yes, no matter what we’ll have larger windows and a little bit more fresh air and pressurization in the cabin but if you think you’ll be getting more spacious seat pitch, you’ll be disappointed. This new aircraft will be as packed as any in service now. Overhead bins will still be crowded.
My birthday is December 12th. There is speculation that the 787 may fly as early as December 14th. That’s close enough that I find myself kind of hoping that Boeing might pull a fast one and send it up into the sky 2 days early. It would be exciting to have an airliner born on my birthdate.
Michael O’Leary, CEO of Ryanair in Europe has been demanding a new deal for up to 200 Boeing 737 aircraft between 2013 and 2016 according to Reuters. Keep in mind that up to 200 aircraft likely means a firm order for between 50 and 100 aircraft with options for more. Boeing, on the other hand, has so far refused to negotiate what is by all accounts a rock bottom deal on their 737. More amusing is that Airbus has so far refused to offer a better deal on their aircraft since they’re already familiar with Mr. O’Leary’s tactics when it comes to negotiating. He likes to play one manufacturer off another.
There are likely several things at play here. First, Ryanair has often made a profit by “turning” their aircraft rapidly and selling them for a profit to other, smaller players. A situation that has no doubt irritated Boeing as they are looking to sell to users, not distributors. The original pricing for Ryanair was negotiated at a time when commercial aircraft sales for the industry and Boeing in particular were pretty flat and there is no doubt that Ryanair offered a serious opportunity for cash flow at a time when Boeing was in need of filling slots in its delivery schedule.
Not so much anymore. Boeing has a health backlog of orders and many of them for airlines who will pay more per aircraft and be happy to receive their 737s early. American Airlines has continued to up its orders for the 737 in light of the fact that no new next generation 737 replacement is due anytime soon from either Airbus or Boeing. Other airlines are likely to do the same over the next year or two. There is no incentive for Boeing to make an even better price to Ryanair.
And I think Mr. O’Leary knows it. But by making his threats and going public with them, he has begun to set an argument for why Ryanair will likely do a couple of things in the next few years. One will be slowing their growth. The truth is, growth opportunities for them in their market(s) are becoming few and far between. Second, they really can’t continue to “flip” aircraft in the next few years as there are plenty of other sources developing for second hand NG 737 aircraft. Slowing their purchases will give them a public rationale for slowing growth and reduced profits from sales of the 737.
I also doubt that Mr. O’Leary will distribute money to either his executives (in the form of bonuses) or to his shareholders. If there is one thing he knows, it is that an airline lives and dies by its cash holdings. It’s a weapon that I don’t believe he would give up. Instead, they may choose to invest it.
Mr. O’Leary has publicly spoken about creating a new trans-Atlantic airline in the future. Whether or not it is just talk, we’ll never know unless he does it. However, he does need the right kind of aircraft for developing his self-described premium/economy airline for the markets he thinks he can access. Part of his plan includes flying to secondary airports again in the US to save money. A plan that, I think, he’ll learn isn’t nearly as feasible as it might be on the European continent. There are no secondary airports with good transportation to their major market centers. You can take passengers to Hartford, Connecticut, for instance, but there isn’t a cost effective way to get from there to Boston or NYC.
However, that doesn’t mean Mr. O’Leary can’t access a number of markets and do so profitably. He is a master negotiator and there are plenty of US airports that would potentially welcome such an airline. With lots of cash, reduced capital requirements for the Ryanair fleet and good timing, they can establish such an airline if they can find the right equipment to use.
And that leads us back to Boeing. I think Mr. O’Leary recognizes that the 787 might be just the right equipment for such an airline. Both the 787-8 and 787-9 offer the right kind of efficiency, size and economics for make such a venture a success. There is no way that he’ll buy second hand aircraft such as the 767 or the A330 for such routes. Its difficult to find new(ish) aircraft on the used market that are worth purchasing and the A-330 probably is just too big for the routes. But the 787 potentially offers the right package. And I wonder if the current bluster about a deal isn’t about getting Boeing “prepped” to do a deal on the 787 with earlier delivery slots at great prices.
Time will tell. One thing I’m entirely certain of is that Michael O’Leary doesn’t have nearly as much contempt for Boeing as his bluster indicates. Both companies have done very well with each other and both understand that its in their interests to find a way to continue to do business.
I have a funny feeling that safety and getting those Delta/Northwest ops combined is about to become a big focus at the airline.
Incident 1: NTSB INVESTIGATING LANDING OF COMMERCIAL JETLINER ON TAXIWAY IN ATLANTA
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The National Transportation Safety Board is investigating the landing of a Delta B-767 on an active taxiway at Atlanta Hartsfield International Airport (ATL).
According to preliminary information received from several sources, on Monday, October 19, 2009, at 6:05 a.m. EDT, a Boeing B767-332ER (N185DN) operating as Delta Air Lines flight 60 from Rio de Janeiro to Atlanta landed on taxiway M at ATL after being cleared to land on runway 27R. No injuries to any of the 182 passengers or 11 crewmembers were reported.
A check airman was on the flight deck along with the captain and first officer. During cruise flight, the check airman became ill and was relocated to the cabin for the remainder of the flight. A medical emergency was declared and the company was notified by the crew. A determination was made to land at the scheduled destination of ATL.
The flight was cleared to land on runway 27R but instead landed on taxiway M, which is situated immediately to the north and parallel to runway 27R. The runway lights for 27R were illuminated; the localizer and approach lights for 27R were not turned on. Taxiway M was active but was clear of aircraft and ground vehicles at the time the aircraft landed. The wind was calm with 10 miles visibility. Night/dark conditions prevailed; twilight conditions began at about 7:20 a.m. EDT and the official sunrise was at 7:46 a.m. EDT.
A team of four from the NTSB, led by David Helson, is investigating the incident.
The issue of runway safety has been on the NTSB’s Most Wanted List of Safety Improvements since its inception in 1990. Information on the NTSB’s work on runway safety is available at http://www.ntsb.gov/Recs/mostwanted/runways.htm
Incident 2: NTSB INVESTIGATING FLIGHT THAT OVERFLEW INTENDED MINNEAPOLIS AIRPORT
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The National Transportation Safety Board is investigating an incident where an Airbus A320 overflew the Minneapolis-St Paul International/Wold-Chamberlain Airport (MSP).
On Wednesday, October 21, 2009, at 5:56 pm mountain daylight time, an Airbus A320, N03274, operating as Northwest Airlines (NWA) flight 188, became a NORDO (no radio communications) flight at 37,000 feet. The flight was operating as a Part 121 flight from San Diego International Airport, San Diego, California (SAN) to MSP with 147 passengers and unknown number of crew.
At 7:58 pm central daylight time (CDT), the aircraft flew over the destination airport and continued northeast for approximately 150 miles. The MSP center controller reestablished communications with the crew at 8:14 pm and reportedly stated that the crew had become distracted and had overflown MSP, and requested to return to MSP.
According to the Federal Administration (FAA) the crew was interviewed by the FBI and airport police. The crew stated they were in a heated discussion over airline policy and they lost situational awareness. The Safety Board is scheduling an interview with the crew.
The cockpit voice recorder (CVR) and flight data recorder (FDR) have been secured and are being sent to the NTSB laboratory in Washington, DC.
David Lawrence, the Investigator-in-Charge, is leading the team of 3 in investigating the incident.
Parties to the investigation are the FAA and Northwest Airlines.
It would appear that pilots at the combined companies are allowing themselves to be a bit distracted these days. I particularly hope that the CVR transcripts for that second incident become available one day. Something tells me that policy talk wasn’t the problem.
I’m glad that there has been a dialog on excessive flight delays for the past few years. Just having the dialog has helped, I think. But now people are starting to talk about real solutions as opposed to shouting out “there ought to be a law!”. I agree, there should be a law but I also agree with airports and airlines that the law ought to be sensible too.
The cause of long delays on the tarmac derive from a variety of factors. Certainly weather is the biggest one of all. Severe weather is somewhat unpredictable both in timing and severity and I get that. You just can’t always guess right. But I think there are some issues that are getting ignored in the discussion.
First, I would ask why we allow airlines to board airplanes and send them out in droves when it is clear that airport operations are about to be impacted severely by an arriving storm? I blame airlines, airport management and the FAA for that. When an arriving severe storm is on the horizon, cramming people into the airplane and trying to rush it out for take-off before it (the storm) arrives is just a bad strategy. Every airline is pursuing that at the same time and that means maybe 10% of all the aircraft are going to make their departures.
Airlines have several incentives to behave that way. One, if they leave the gate within 15 minutes of scheduled departure, they get to count that as an on time departure. That counts in the evaluation(s) of virtually every airline employee working that particular flight. Bad idea because it allows them to shove the problem on someone else without consequence. Wouldn’t it be better for the Department of Transportation to set criteria for these “on time” departures that reflects both reality and common sense? Isn’t it better to declare an amnesty on on time stats during severe weather on the part of airlines? You need to dis-incentivize that behavior during those times.
The big unspoken problem that airlines haven’t really mentioned is the impact to their operations system wide. If an airline starts canceling flights in a hub city, that impact will start to be felt all over the country in as little as 2 hours. Canceling flights has an impact potential for creating disarray in airline operations for days. Delaying them but ultimately getting them to their destinations that day has far less of an impact. There could be a few solutions to this problem such as a mutual aid pact between airlines. Why not consolidate 2 delayed flights onto one aircraft, share the revenue and return to normal asap rather than try to send 6 delayed flights to the same destination at the end of a storm? There is a history of mutual aid pacts among airlines but they largely disappeared with deregulation. However, that doesn’t mean they can’t be encouraged again.
Airlines need flexibility but the drive to equip a fleet with as few different aircraft types as possible means that they lost some flexibility. I wonder if the costs of sorting out a massive disruption aren’t worth an extra aircraft or two to mitigate against problems. Again, airlines used to have a history of having backups for these kinds of problem but lean operations demanded by shareholders don’t really allow for proper risk mitigation. Better fleet planning and utilization might allow an airline to fly a 767 with 2 flights of 737 passengers to a destination during a severe disruption to operations. By consolidating the passengers into one flight, getting them to their destination instead of stranding them and eliminating some departure congestion, every one’s best interests and pocket book might be better served. But it requires us to allow some cooperation among airlines and some long range planning too.
If you make it the law that a passenger must have the right to get off an airplane and abandon the flight after 3 or 4 hours, you won’t solve anything. There will be as much congestion (and possibly more) and the potential for greater delays. However, if you allow the FAA to “prioritize” departures under certain circumstances and meter the flow, airlines won’t be so quick to board airplanes and shove them out onto the taxiways. Airports and airlines should be forced to consider the whole picture before boarding an aircraft. If it has no opportunity to taxi to the runway and take off within one hour, it shouldn’t be leaving the gate in the first place.
Airports could help better too. You can’t expect them to accommodate every displaced passenger during a storm but you can expect them to have a good emergency plan that includes keeping restaurants and stores open, overflow areas for passengers to park themselves for longer durations and equipment that allows disembarkation during storms that keep ground personnel indoors.
Right now, you have people saying that airlines should allow individual passengers off an airplane if they want off after three or four hours. That potentially further delays 100+ passengers for the benefit of 5 or 10. Instead, airlines should simply be required to return to a gate and accommodate passengers reasonably if they haven’t departed within 3 hours. Like it or not, a flight should be an all or nothing proposition.
Finally, airlines should be required to consider what the diversion options are. Airlines have been increasingly using alternate cities that are close by but non-standard stops for their business. Should American Airlines keep aircraft on the ground at an airport that doesn’t have proper ground handling equipment or facilities for those passengers? Absolutely not. The context of potential diversions should be considered when planning a flight. If an airline is faced with potential diversions when flying to a particular area, it should carry enough fuel to divert outside of that area of disruption and to a location where they can reasonably accommodate the aircraft and passengers.
It does absolutely no good to anyone to send flights to Rochester, MN when MSP is shutdown if the airport can’t accommodate the aircraft and passengers in the first place. For that particular event, it would have been far better to send that aircraft to Milwaukee, Des Moines or Rockford where the airports were experienced in accommodating diverted flights late at night.
Without genuine cooperation between airlines, empowering the FAA and air traffic control and requiring airports to plan for the worst rather than the best, this problem doesn’t get solved to any one’s satisfaction.
The Cranky Flier had a post today discussing Continental’s new moves in LAX which include new flights to Hawaii. Continental will have an all 737 base in the Los Angeles area with two 737’s serving new flights from Orange County to Hawaii. It made me think.
Back in the pre-regulatory days, flights from the mainland US to Hawaii were served by large aircraft such as the 707, DC-8 and, later, the 747, DC-10, L-1011 and even the 767. The routes allowed airlines to serve huge numbers of customers with large aircraft and make money. Braniff International had the franchise for Dallas to Honolulu in the 1970’s and served it with a 747 and an amazing 16 hours per day utilization.
Then deregulation came and airlines slowly began to develop new routes. It was no longer necessary to fly to a “gateway” city to catch a flight to Hawaii. More and more cities found themselves being served with those routes to Hawaii. Again, Braniff International, at one time, had a 747 flight from Portland, OR to Hawaii. (It carried little traffic, however.)
There was some consolidation after airlines learned that not everyone in a particular city was dying to fly to Hawaii. But the big change for Hawaii has been ETOPS or twin engine flights overseas. This allowed airlines to serve smaller markets with aircraft both capable of the loads as well as the distance. The truth is, when the airlines don’t have to feed 150 passengers a day to a gateway city but can fly them directly, they make more money. 20 years ago, I would have chuckled if someone told me that 737-700 aircraft would fly to Hawaii from the mainland.
Boeing and Airbus have different views for the roles of widebody, large capacity aircraft. 10 years ago, Boeing forecast that the market would continue to fracture with more and more direct routes being employed as opposed to large capacity hub to hub flying. Airbus, however, believed that the crowded skies would force more large capacity hub to hub flying onto the airlines. It turns out that Boeing was more right.
The markets drive these changes and when an airlines can make more pure profit using right sized aircraft flying direct, they will. Yes, the legacy airlines of the US (and other parts of the world) continue to follow a hub and spoke model primarily but they’re all learning that more direct flying where the loads fully justify it is a good and profitable thing.
Accordingly, this is where I think Boeing continues to have a winning strategy with its 787/777 product line. Yes, there are a few airlines capable of filling an A-380 and those airlines will make money from using that aircraft. But as more and more nations open up their skies to more competition, that is going to change. Having the right aircraft for the right route will be key to a manufacturer’s success and Boeing seems to have a better feel for the world market whereas Airbus seems more plugged into the Euro/Middle East markets they already do so well in.
I’m no longer sure there is a real place for the new 747-8 aircraft. Boeing’s 777-300 is just as capable in almost every case and carries a massive number of passengers without being so big that it adds risk during seasonal low periods. The same is true for the 777-200.
And what happens when aircraft such as the 787 family begin flying? This family is roughly 767-sized in capacity but its range is far greater and that means even more markets can be accessed via long haul direct flying. An international airline can probably make more money (through passengers *and* cargo) using the 787 and 777 families for more direct flying with aircraft that are “right sized” for the markets than they can using much of the Airbus family.
Airbus has one aircraft model suitable for this right now. The A-330. the A-340 is essentially dead since it under performs against the 777 in virtually any mission. The A-330 is right sized for a number of the current markets and many more of the future markets. The A-380 is suitable for only a few markets and those are already dwindling for some airlines. For instance, QANTAS has introduced the A-380 on their routes to the US. However, with a new Open Skies treaty between the two countries, there are also new entrants to the market like V Australia and Delta who are vying for customers with United and QANTAS very competively. Those airlines understand that it will take a while to develop their routes and build relationships with airlines in both countries to feed traffic but it will happen. As that traffic shifts from what was originally two airlines (QANTAS and United) to four airlines (QANTAS, United plus V Australia and Delta), what happens to each airlines’ loads?
It’s notable that QANTAS flies the 747 and A380 to the US and United flies the 747 exclusively. The new entrants are using the 777-300 and 777-200 for their flights. The 787 and it’s longer range capabilities will quite possibly fracture that market even more by making it possible to fly from the interior of the US to Australia instead of having to use a west coast gateway city. At that point, I don’t know that QANTAS has a use for very many A380s or 747s and, additionally, they don’t have any right sized aircraft for the route(s) until they start receiving their 787s which are late and somewhat deferred.
The Airbus A350 is capable of competing on many 777 routes and while it does have slightly lower trip costs vs the 777, it also has less revenue capabilty because it can’t haul as much cargo on the same missions.
The world’s airline routes are going to continue to expand internationally and at a far greater rate than traffic grows between any two nations. Having the right equipment for the right moment is going to be key for any international airlines survival. Those who don’t plan for it now and have it arriving in the next 5 to 10 years are going to wither to a slow death.
This incident with US Airways Flight 1549 has made me realize that we now have two incidences (at the least) on record where a superb landing was made in an emergency situation and was done so during moments that call for graceful aircraft handling.
I feel certain that this US Airways incident is one. It does take grace and experience to land an Airbus A320 gently enough in the Hudson River so as to avoid any breakup of the aircraft. A fully loaded, fully fueled airplane is not easy to handle and keeping it from over-stressing itself and breaking apart is a genuine feat. The pilot, Chesley Sullenberger, is a certified glider instructor.
Another incident that many airliner fans certainly know about is the Gimli Glider episode. An Air Canada Boeing 767 ran out of fuel and was glided to a safe landing at a decommissioned air force base. A fueling mistake had been made at its last stop and both pilots found themselves woefully out of fuel in the middle of a transcontinental flight. The Captain of that flight, Bob Pearson, was also an experienced glider pilot and used some flight techniques from that experience to make a safe landing at Gimli. You can read all about that incident HERE. (It’s well worth the time.)
What strikes me about this incident, so far, is that the pilots had very little time to execute a plan and manage their situation when it happened. The bird strike occured somewhere near or over the Bronx Zoo (based on the observed flight track from Passur.Com). From that moment, they had just a hair over 3000 feet in altitude, two failing engines and a highly populated area underneath them. With engines providing some forward thrust, they maintained control of the aircraft, executed a tight turn just north of Manhattan and made contact with air traffic control.
While attempting to manage the aircraft for an emergency landing at New Jersey’s Teterboro Airport, the pilots had enoug presence of mind to realize, quickly enough, that they had not enough altitude nor forward airspeed to make it there and quickly lined up on the Hudson River instead. Gently landing an A320 that likely weighed in excess of 150,000 lbs and which had little airspeed to maneuver with is a nightmare scenario for any pilot. Captain Sullenberger managed to line the aircraft up with the river, lower it to just above the water’s surface and then stalled the aircraft just right so that it essentially dropped into the water with almost no forward motion. He did it so good, most passengers have described the impact as no worse than a minor rear end car accident.
A very well done job for all the flight crew and it was a genuine touch of class that Captain Sullenberger was able to walk the aircraft and ensure all his passengers were off and manage to be the “last one off the ship” as well. For a really bad situation, it was the best of all outcomes.
The current economic climate doesn’t speak well for airlines who depend upon business travelers to meet their expenses on a flight. For the past several years, airlines have been introducing airline seating that specifically caters to the business traveler and, quite frankly, a product that meets or exceeds anything that represented First Class even in the 1990’s.
The airlines are always faced with a difficult set of priorities to balance. On the one hand, catering to the business traveler is essential because they do pay for a good portion of each flight and they must compete for those travelers very aggressively. On the other hand, filling those last 100+ economy seats is also essential because that is the difference between profit and loss. Typically, an airline will woo the business traveler with comfort and the economy flyer with price. In order to compete on price, that means reducing your costs per seat to the lowest possible and offering a ticket price that bests anyone else on a route.
Or does it? In the late 1990’s, American Airlines began a program of more space in coach. MD-80 aircraft were reconfigured to offer as much as 34″ of seat pitch and as someone who was flying a great deal at that time, I can confirm that it made a huge amount of difference. Unfortunately, the post September 11th terrorist disaster forced American to reconsider its configuration and the aircraft were reconfigured back to a 31/32″ pitch. But how many seats did that gain them? Only about 9 seats.
The one thing airlines never seem to try to differentiate themselves on is seating. While some airlines have tried an economy plus seating (offering about 34″ to 36″ of seat pitch), no one really advertises the advantage of more seat room. It is never heavily marketed like many other airline qualities. That is a lost opportunity. I do not believe people would necessarily choose a flight on an airline on the basis of only price if they were fully aware of a more comfortable option at a minor extra cost. Airlines such as United Airlines often only take the opportunity to tell a customer of these seats after they’ve already made a purchase and only as an upgrade.
Offering an increased seat pitch and explaining its comfort and, possibly, better position in the aircraft would, I think, be an attractive offer.
The question is how much extra do you have to price that seat per leg? I suspect about $20 per flight segment would work. Possibly as much as $30. But why not offer it by the hour? Would you pay $10 / hour for a better seat? Chances are you would. However, that upgrade must be presented BEFORE the purchase to be attractive on price and that upgrade must be described in what it offers the customer. More leg room, a better position in the cabin which makes for easier entry and exit from the aircraft.
More room does not necessarily have to mean fewer seats either. I’ve written before about Delta’s adoption of the Thompson Cozy Suite seats on their 767 aircraft. There are other options as well. Airtran offers a Recaro aircraft seat on the Boeing 737 aircraft that is unparalleled currently as an economy seat. Its design offers just a tiny bit more leg room and yet configures easily to the same 31/32″ seat pitch airlines want to use. It provides a more conventionally thick seat cushion on the bottom and upper half while offering a better contoured lumbar area that while thinner, is much more comfortable and yet offers the passenger behind you that little bit of extra room.
Sicma Aero is concentrating its efforts on a more ergonomic seat but I question that direction because how do you create an ergonomic seat that feels comfortable to both the 5′ tall 100lbs woman and the 6′ 2″ tall, 270lbs man? It requires adjustability and that quite likely is going to cause trouble both with maintenance and the customer who doesn’t understand how to adjust the seat.
Avio Interiors has taken an approach more like Recaro by offering a seat that is properly cushioned in the right points but sculpted to again offer that small but important extra space for legs.
Thompson Solutions offers both the Cozy Suite as well as a more conventional but ergonomic economy seat. The key to their offering is a staggered or herringbone style layout that allows airlines a 15″ gain in capacity or greater width and seat pitch. Since aircraft are generally limited by either their load or the maximum seating they are certificated for, Thompson’s solutions (no pun intended) allow an airline to offer a new seat that is competitively priced, less maintenance intensive and vastly more comfortable than a conventional seat. The key obstacle here is that airlines are afraid of making the investment and facing customer rejection of a design that is admittedly fairly radical in appearance. With Delta introducing this on their 767 aircraft, I suspect the airline’s fears will be reduced and there will be a push to find similar solutions for new fleets.
Weber Aircraft, based in the United States, is offering a much more conventional product that, unfortunately, seems pointed towards high density seating without any emphasis of comfort. Make of that what you will.
While airlines will no doubt seek to maximize their loads on aircraft and match pricing from their competitors, it becomes increasingly obvious that market capture can be based on these new seating options provided that the airlines themselves will actually market their product. People still want comfort and the success of a la carte pricing indicates that people will still pay for what they want.
The challenge is in airlines changing their marketing model both on their own websites as well as through popular travel sites. When a customer can make their choices from an a la carte menu and choices include better, more comfortable seating that is well described, airlines will both differentiate and sell their product better. Airlines even have the chance to sell such a product as a business offering to companies that do understand the value of taking care of their employees but who have to now measure that against the often 4 times greater cost of a business class seat.
Delta / Northwest is not only big with respect to the number and type of airplanes they have, they are also big for the number of hubs they are currently operating. Conventional wisdom continues to bet that some of those hubs will be closed or rationalized just as it bets that the airline fleet will be reduced.
My guess is that there really won’t be a reduction in hubs of any real significance with the exception of two. This new airline has two hubs in close proximity, Memphis and Covington/Cincinatti, and each serves similar markets. However, rather than being combined into one, I suspect that Memphis will likely be de-emphasized into a “focus” city with more connecting traffic routed through Covington/Cincinatti. The yields in each city are very good but Covington/Cincinatti is by far the city with the best yields. Memphis is likely to remain as a focus city because it is a good gateway to the central midwest section of the US.
All other hubs in the US such as Atlanta, Minneapolis / St. Paul, Detroit, and Salt Lake City have the airline as a dominant carrier and there is no reason to combine any of them with respect to the routes they serve.
Now, both airlines operate significant flights from gateway cities such as Los Angeles and New York and it is quite likely that the airline will work hard to combine some flights going to the same cities. For instance, flights from the New York area going to the same destinations in Europe will be combined to raise the load factors on the equipment being used. However, Europe presents an interesting problem because Northwest has been in a close relationship with KLM and has used Amsterdam as a “hub” to connect to other cities in Europe. Delta, on the other hand, is used to flying direct flights to a variety of cities in Europe without a hub or close partner. I suspect the relationship with KLM will be reduced so that Delta can raise the loads on its own flights to smaller European cities.
Northwest comes to the table with a hub in Tokyo, Japan and they have 5th Freedom Rights to pickup and carry traffic from Tokyo to other cities in Asia. On the surface, that would appear to be a very valuable asset. However, the value of that arrangement was far greater when the political climate in Asia was much different and the range of aircraft made it more convenient to fly to a central hub. Today, it can be much more profitable to fly direct to a variety of Asian cities using newer, long range aircraft such as the Boeing 777 and the about to be introduced 787. I have no doubt that the Tokyo hub will be retained in some form because the yields from traffic originating in Tokyo to other Asian cities is still well worth the effort but I suspect that there will be a renewed emphasis on point to point flying as things evolve in the new airline.
The thing most likely to change at Delta’s hubs will be the aircraft equipment. With a wide variety of equipment to choose from, it would be unsurprising to see a shift of long haul aircraft between the hubs in order to improve yields, load factors and even to explore new routes. That will be done slowly and carefully so that Delta doesn’t have to service too many different types of aircraft at each hub. Once again, aircraft being used at various hubs to service various areas will probably be rationalized. It would be unsurprising to see A330s shifted to longer South American and African routes with B767-400’s moved to trans-atlantic routes originating in MSP and DTW.
Los Angeles will probably see a greater concentration of 747 aircraft being used on trans-Pacific flights. New York and Atlanta will probably see 777 aircraft moved in for long range, point to point flying to destinations in India, South America and even Asia.
At present, Delta has 4 different types of long range aircraft in the 747, 777, A330 and 767 with another on the the way (787). Since Delta already operates GE powered 777-200ER/LR aircraft, they’ll likely place an order for some 777-300ER aircraft and use those to replace the aging 747 aircraft. That will reduce flying by one type. The A330 aircraft will be retained until a fleet of 787-9/10 aircraft can be purchased and then the A330 will likely be let go. Delta’s 767-400 aircraft is fairly new but it will probably suffer the same fate as the A330 in being replaced by 787 aircraft in the future. Suddenly, two basic types with 2 sub-types between them can service all the long haul routes and, at the same time, offer some harmony at each hub.
I do wonder if Northwest’s 787 orders will be switched from Rolls Royce engines to GE GEnx engines. That would permit Delta to operate two basic aircraft types that would use the same brand of engine and engines that share some basic design philosophy as well.
The tricky part of managing all of these hubs for Delta will be the domestic fleet which is comprised of Airbus A320 series, Boeing 737 series, DC-9 series and MD80/90 series aircraft. Because it is more efficient to perform maintenance on a domestic fleet that keeps the aircraft close to a maintenance center, I do wonder which hubs will get which aircraft. Both Airbus and Boeing offer good choices for domestic fleets in the A320 and 737 series. The DC-9 fleet is old and will be retired over the next couple of years so it isn’t a factor. The MD-80/90 aircraft isn’t exactly old but it does become somewhat of an orphan and they don’t offer the fuel effiency that the A320 and 737 offer. It’s quite possible that Delta will retain both the A320 and 737 series and simply order more of both until they can choose a next generation domestic fleet type from Boeing or Airbus. I do believe that the MD80/90 fleet will be selected for retirement in the next 2 years.
The exciting part of this merger will be watching the decisions that Delta makes about its new future.
United Airlines, an airline that has offered spotty-at-best service for more than 10 years, seems to have the 9 lives of a cat to most people. Unfortunately, of all the legacy airlines, it is the one that should have melted away some time ago. It emerged from bankruptcy in 2006 after spending 3 years and over $300 million reorganizaing itself to operate in a world with $50 / barrel oil without a realistic plan to deal with contingencies.
The problem is, oil was already at $60 / barrel when it started fresh. Since 2006, United has been the one airline that always manages to arrive to the party in rumpled clothes and only a $5 bill to pay the door charge. Those rumpled clothes are an aging fleet (although all of the truly old Boeing 737s are now being withdrawn from service to cut capacity) of aircraft that do not match the interior quality or service level of most of its competitors.
The management team, most importantly CEO Glenn Tilton, has spent more than 2 years maneuvering to merge this airline with another and, yet, has been rebuffed by all potential candidates such as Continental, Delta and US Airways. Indeed, they took a particularly condescending attitude towards US Airways’ offer to explore mergers when Glenn Tilton implied that he and his team would remain in place and “mentor” the US Airways management team including Doug Parker.
Say what you will about US Airways but it isn’t the company we knew in the 90’s or even 3 years ago. Doug Parker and team are really America West and they’ve been better at executing to plan than virtually any other management team at a legacy airline. If anything, Mr. Tilton would be well served by Mr. Parker’s mentorship.
Now the marriage dance in airline mergers is essentially over. Delta and Northwest are walking down the aisle, Continental has chosen to stand alone (wisely in my opinion) and American Airlines has decided to pursue trans-atlantic partnerships with British Airways and Iberia Airlines. There is no one else left for United to pursue a merger of equals and they lack the cash and operating plan to purchase a smaller airline as well. Indeed, Continental Airlines is joining the Star Alliance (of which United is a founding member) and that may benefit United but if they think they will remain the shining star in the US market for that alliance, they are sadly mistaken.
Continental’s management team is stable, smart and agile in this market. They are uniformly the choice of airline among business travelers (and that is who pays the bills) and possess a young, modern, harmonized fleet of aircraft that serve the routes efficiently. Continental has hubs that will serve that alliance well in both NYC, Houston and Cleveland and offer Star Alliance members excellent codeshare options throughout the United States.
United Airlines has a fleet of 747s that are some of the oldest -400 models and by all passenger accounts they are in desperate need of refurbishment (unplanned for 3 years and not recognized for another 2 years while United showed its legs to potential suitors). They possess a large 777 fleet which, on the surface, would imply some modernity there. However, about half of that fleet are early model “A” market 777s powered by the less powerful and efficient Pratt & Whitney engines. No lip gloss found there. The other half are 777-200ER models that would at first glance appear to be more modern intercontinental aircraft. They aren’t, really. They’re what Boeing originally referred to as “B” market 777s and, once again, they are powered by the less reliable and efficient Pratt & Whitney PW4000 series engines. I would point out that every other operator of this aircraft in the US is using the more powerful and efficient Rolls Royce Trent or GE90 engines (American Airlines, Delta Airlines and Continental Airlines.)
Their 767 fleet, a large one comprised of 767-300ER models, shows the same flaws as their 777 fleet. While some were built as recently as 2001, they are all powered, once again, by the less fuel efficient Pratt & Whitney engines. I’m sure a theme is beginning to reveal itself here.
The same also remains true for their 757 fleet in that they are powered by the lesser Pratt & Whitney engines while other airlines are utilizing the real rocket of that type, the Rolls Royce RB211 powered 757 that, with winglets, is capable of ETOPS trans-atlantic operations.
Ignoring the soon to be gone 737 fleet (which is old and dingy but not powered by Pratt & Whitney for once), the remaining aircraft are various Airbus A320 types. While they are not old by airline standard, most are more than 10 years old and some are approaching 15 year of age now.
An old airplane is not an unsafe one but, in United’s case, it is an uncomfortable one. While other airlines have paid attention to maintenance, comfort and even tuning engines, United has spent its time navigating bankruptcy and its management team has bet their golden parachutes on a merger. With no other really suitable partners, they are now faced with operating an airline that by most standards, is not competitive. What’s worse, they have lost 2 years time that could have been spent executing a service plan that might work.
If the cost pressures airlines are facing continue for another year, they (United) will be faced with another potential bankruptcy and, this time, it should be a liquidation. There is no argument for this airline continuing its operations under the present regime nor is there an argument for it continuing to operate simply to support air transportation in the United States or abroad. There are plenty of air carriers that can take up the slack and operate more coherently than United. In fact, the only part of United ceasingly to exist that I find distasteful is that it potentially offers American Airlines an even greater lock on Chicago’s O’Hare airport. Since I experience that kind of fortress here in the DFW area, I know just how expensive that can be for a consumer.
Successful airlines share a few qualities that I’ve noticed over the years. They generally possess a young, fuel efficient and harmonized fleet. They buy the airplanes configured for performance on a variety of routes. They have leadership rather than just executive management. They focus on a clean, comfortable flight experienced that is defined by the service provided by its employees. Such an airline also carefully watches its money and nurtures its finances to avoid running cash short on the wrong day. It takes care of its employees not by offering the best salaries but by offering a living wage, a hospitable workplace and with fair treatment in both hard times and good.
That is the antithesis of United Airlines and, so, they go on the Death Watch.
In 1966, American Airlines released a set of specifications for a new kind of an airplane, an “air bus”. This plane was to carry 250 to 300 people in a wide body configuration using two new, more powerful fan jets and it would be able to operate short to medium trunk routes such as Denver – Los Angeles or New York – Chicago. Many enthusiasts will recognize that both McDonnel Douglas and Lockheed responded to this with the DC-10 and L1011 aircraft and both were to become rather legendary.
But while the DC-10 experienced great commercial success and the L1011 became the pilot’s airplane (reportedly one of the easiest planes to fly ever built), it was Airbus that got it right with their A300. Both the DC-10 and L1011 were “compromise” aircraft in that they had 3, instead of two, engines to meet a specification that United Airlines issued: the ability to take off with a full load from Denver’s mile high airport.
Airbus was originally formed between Aerospatiale and Deutch Aerospace with Spain’s CASA and England’s BAC joining later. Their original aircraft utilized 2 GE CF-6 engines and had a range of about 1500 nm. The A300 would later grow in both range and payload ultimately culminating in the A300-600R which was capable of carrying more than 260 passengers and a full cargo load for more than 4000 nautical miles.
At one point in the mid 1970’s, Airbus A300 sales were so bad that they had to just keep manufacturing airplanes in order to keep the assembly line open while betting that times would change and their aircraft might be adopted by others. One landmark change in sales for Airbus was Eastern Airlines. Frank Borman, President and CEO of Eastern, was searching for a replacement for Eastern’s Boeing 727-200 aircraft that would carry more passengers with better operating efficiencies on Eastern’s high density, East Coast routes.
Borman, the former NASA astronaut, was a tough negotiator and ultimately got 4 Airbus A300s to try out for terms that amounted to the cost to operate the aircraft. Eastern discovered that the aircraft was a huge moneymaker for those routes since it consumed 30% less fuel than the competing Lockheed L1011 that they also owned.
Ultimately, Boeing responded with the 767, also a twin engined aircraft, originally designed for much the same mission as the A300. However, in many ways the two aircraft evolved to serve different missions. The A300 thrived as a trunk airliner that could carry a massive amount of cargo easily (because its fuselage was designed to accomodate 2 side-by-side industry standard LD3 containers) and operate on high density routes with both speed and low seat costs. While it was certified for ETOPS(Extended Twin Engine Operations over water or “Engines Turning Or Passengers Swimming) and was even ultimately used on over-water transatlantic routes, its specialty remained its original mission.
The Boeing 767 was built with a narrower fuselage that could not accomodate those same LD3 cargo containers two abreast but it did find its own mission in the transatlantic arena as it gained both range and capacity. To use the similarly sized 767 on the same routes as the A300 was to set oneself up for failure. The A300 was just too good at what it did.
American Airlines owns a number of A300 aircraft and while they were always used primarily for those same routes that Eastern once flew (NYC to Miami and the Caribbean), they also used the aircraft for transatlantic routes such as NYC to London.
To date, there is no other better aircraft for that short to medium haul, high density mission that the A300 has served so perfectly. Since many A300s are aging now, they are being withdrawn from service but there exists no true replacement for this marvel either. Boeing 757/767 aircraft cannot carry either the same passengers or cargo efficiently and while the A330/340 aircraft use essentially the same fuselage, they only begin to show true efficiency on 4000nm or greater missions.
In most markets where the A300 has been withdrawn, that capability has been replaced with greater frequency with airlines using B737-800/900 aircraft and A320/321 aircraft. The Boeing 787 derivative 300 series does, at first glance, meet that mission profile carrying a great number of passengers (280 to 310) on routes as long as 3000 nm. However, the only airlines to order the 787 are Japanese carriers ANA and Japan Airlines. Many speculate that the 787-300, designed to replace the 767 and A300 on regional routes, will either have to grow in range (4500nm) or face being a Japan only aircraft. Indeed, Boeing announced last year that the 787-300 won’t be certiied for use in the US although it could be done very easily should Boeing decide that there is a market in the US for such an airplane.
Sadly, Airbus does not have a new replacement on deck. Their focus has been on the giant A380 and developing their new A350 series aircraft. Sales of their A330 aircraft have been brisk still and Airbus will likely turn its focus to an A320 replacement aircraft once they have both time and resources.
I have no doubt that Airbus will once more “get it right”.
The Dallas Morning News reported that American Airlines will be both accelerating 737 deliveries as well as taking up new orders for the Boeing product.
As they replace MD-80 aircraft (The Boeing 737-800 is as much as 20% to 25% more fuel efficient than the equivalent MD-82/83), your chances of a middle seat go from 1 in 5 to 1 in 3. That said, I still find the prospect of flying newer 737s more attractive than the alternative.
I remain completely puzzled that American Airlines and United Airlines have not ordered 787 aircraft. The 787 fits into their fleet and routes very well and offers just that kind of gain in fuel and maintenance efficiency that both airlines desperately need. Currently, only Northwest Airlines and Continental Airlines have the B787 on order among the legacy carriers although US Airways does have some A350 aircraft ordered. Indeed, the A350 ordered by US Airways seems a bit too large for their needs even when the purchase is justified with the cross-cockpit qualifications that the Airbus product offers with US Airways existing A320/A330 products.
The new DeltaNorthWest Airlines will have Northwest’s B787 orders and will continue to take deliveries on the B777-200LR it already has ordered. Those two aircraft come very close to each other in performance and seat-mile costs in the ultra-long haul market but the 777 has the advantage when it comes to cargo-carrying capabilities.
I cannot believe that for the foreseeable future, there will be no true 757/767 replacement and it is even more difficult to believe that airlines continue to make plans to retain most of those aircraft for the foreseeable future. Both the 757 and 767 have AviationPartnersBoeing winglet programs in place now resulting in fuel efficiency gains as much as 6% on the 767 but they still remain older aircraft with ever increasing maintenance needs.
The competition that exists between Boeing and Airbus has to be one of the fiercest fights ever seen in commercial aviation. Among aviation enthusiasts, most are dedicated only to one or the other and just visit an aviation enthusiasts discussion website and you’ll discover debate that is even more heated than what exists between Airbus and Boeing.
Family and friends have, from time to time, asked me whose airplanes I like the most. I probably lean towards Boeing more than anyone but for different reasons than many have. Before going further, I should say that I think Airbus builds a modern, competitive airliner and is in no way materially inferior.
I like Boeing’s approach to an aircraft. I think they value customer experience just a bit more whereas I think Airbus tends to value an airline just a bit more. One example is the difference between the 737 and the A320 aircraft. Both are made for the identitical market and both are modern, fuel efficient jets. Both have had rough spots over the years and both companies work incredibly hard to sell these jets to all kinds of airlines.
I should say that I admire how well Airbus has done at making their aircraft families cross-compatible when it comes to flight crews. A pilot for an A320 can upgrade to an A330/A340 with a lot less training than a similar upgrade from a B737 to B767/B777. Airbus makes owning their entire aircraft family highly beneficial *if* their aircraft family can fill all of your missions.
However, I do find the 737 just a hair more comfortable. I’m a rather tall and big person with longish legs. Having flown numerous examples of both aircraft, I find the aisle seat experience roughly similar and the window seat experience very different. The A320’s fuselage is more “circular” and therefore curves inward more at the shoulder to head height of most people. At the window, my perception is that my head must lean away from the fuselage and that feels uncomfortable. The 737’s fuselage is more ovoid and that same curve is more gradual and starts more above the passenger than next to him.
The seats should be roughly the same but my perception is, again, different. This simply may be a function of what US airlnes are using for a seat on the Airbus vs the Boeing. My perception is that the A320 class of aircraft typically have a seat that is a touch thinner, a touch harder and therefore a touch less comfortable on flight durations of 2+ hours. I have felt it on America West aircraft, US Air aircraft, United Airlines aircraft and Northwest Airlines aircraft.
I once had a chance to fly from PDX (Portland) to DFW (Dallas / Fort Worth) via DEN(Denver). My flight from PDX to DEN was on a United Airlines A320 that appeared to be older but not “old”. Within 1 hour, I found myself fidgeting and since I was in Economy Plus next to a window, I expected to feel more comfortable. I didn’t. The next segment was on a United Airlines 757 (not a 737 but it does have the same fuselage dimensions and uses the same seats) in plain old Economy rather than Economy Plus. I was simply more comfortable. The window seat felt more accomodating and I was finally able to relax enough to nap despite less legroom.
Each aircraft manufacturer tries hard to find the right niche for aircraft and I would argue that as a result of this competition, they actually are more complimentary these days than directly competitive. An airline could be well served by both Airbus and Boeing without sacrificing efficiency.
If I were to pick a fleet for the upcoming Delta / Northwest merger, I would center on using the 737 family for domestic service (using a combination of 737-700 and 737-800 aircraft, the 767 (or 787-3) for domestic transcontinental and Hawaii service, the A330 for trans-atlantic (Europe and Africa) and South American service, the 787 for South American / Southeast Asia and trans-pacific service and the 777-200LR and 777-300ER for long haul, high density international traffic from hubs like ATL (Atlanta), MSP (Minneapolis / St. Paul), DTW (Detroit), JFK (New York City) and LAX (Los Angeles).
It’s hard to say where the new Airbus A350-XWB will fit in “mission-wise” when it comes to such an airline. While it’s passenger economies may be a tad better than the 777, it won’t haul nearly as much cargo. At present, it cannot quite adequately fill the 777 mission role and it might just be a tad too big to compete directly with a 787-9/10 either.
One thing I admire about Boeing is that they tend to “right size” their aircraft for various markets. Often people directly compare Boeing and Airbus aircraft on the criteria that one aircraft can carry more people on the same mission than another. Occasionally, that’s valid. More often, not.
An airline needs aircraft that “fit” the passenger and cargo demand of various routes. Boeing has 40 years of experience helping airlines plan their fleet on these needs and does it well. The 787 was never intended to be a 767 or 777 replacement. It was developed to fit an emerging demand that really fell in between those two aircraft.
The next replacement for the 737/757 series will fall somewhere new as well and probably will not fill a need below the 737-700 and probably will not fill a role that exceeds the 757-300. That’s a 2 class aircraft that will probably have a family range accomodating from 150 passengers to 220 passengers. Real aircraft range will probably include transcontinental capability for all variants at about 3500 to 4000 nm (nautical mile) max range. Airbus will likely target a similar set of criteria with the next generation aircraft.
The discriminators in the next battle between Airbus and Boeing will be things like the best operating efficiency, dispatch rates and passenger comfort. I would give the edge to Boeing when it comes to efficiency and dispatch rates and it is anyone’s guess on passenger comfort. I’m certain that both companies will sell an amazing amount of the next generation single aisle aircraft and I’m equally certain that airlines will praise both.
Not you, the consumer. Oh, we know your type these days. You buy on price and frequency. Next is loyalty to your frequent flyer plan (and some of you even buy based upon gathering your FF miles ahead of price.) You aren’t going to change. You never really have and you never really will. You are the girlfriend/boyfriend who promised to change and never did.
It’s time for airlines to fly smart. No, really, it is.
Southwest Airlines pioneered the modern strategy that most airlines try to emulate in one form or another. They have a single type of aircraft (Boeing 737) and trade high load factors for high utilization of aircraft and crews. It’s a model that works for them and even for some others. Legacy airlines have adopted a modified model that included narrowing the fleet types which allows not only fewer costs in equipment but also permits airlines to use their staff across a broader range of aircraft.
But it appears (to me at least) that that strategy in the current economic climate is going to prove flawed. The truth is, the airline industry tends to have to re-invent itself every 30 years or so. That reinvention has taken the form of a revolutionary change in aircraft or, in the case of the 70’s, a new regulatory climate. Traditionally, it’s aircraft.
One of the criticisms of the proposed Delta / Northwest merger is the mish-mash of fleet types they’ll have. The CEO’s of both Delta and Northwest have responded that it in fact appears to be a big advantage in the merger because it will permit them to “right-size” each city pair with the proper aircraft. What this means is that with different fleet types comprimised of aircraft capable of varying efficiencies and loads allows them to fit the right aircraft to the right flight.
For example, a flight from Atlanta to Nashville might typically carry an average of 90 passengers per flight and Delta might be using a Boeing 737 for the flight segment that carries about 130 passengers. That means their using a new (high capitol costs but more fuel efficient) airplane to fly the route with an average load factor of 69%. It’s a short flight segment so the fuel efficient engines of the 737 don’t play as big a role in savings as they would on a longer flight. Post Merger, Delta may put a Northwest DC-9-40 on the segment that carries about 110 passengers. Suddenly the capital costs are extremely low (the airplanes were paid for years and years ago and the costs to operate it are maintenance and periodic refurbishment), the load factor is now 81% and flight has about similar fuel and labor costs. What’s more, that 737 can now fly on flight segments with average loads that are much closer to its capacity and which provide greater revenue yields as well.
More airlines in the US need to re-examine their fleet strategies. Almost all flights being flown by regional jets of 50 seats or less *lose* money now. Particularly when they are used for “long and thin” routes such as DFW / CLE (Cleveland). An airline of real size (US Legacy carriers but also LCC carriers such as SWA, Jet Blue and Airtran) can benefit from a diversified fleet.
There are countless “shuttle” type routes that could yield far more profit by using new, advanced turbo-prop aircraft such as the Bombardier Q400 and ATR-72. There is no rational justification to use regional jets on short segment routes when compared to these advanced turbo-props for instance.
An airline could, for instance, fly a Q400 on flights between Dallas and Austin offering 70 seats per flight and make money by filling only half of them per flight. Time flying between cities would be virtually the same as Southwest Airlines’ Boeing 737 and seating would be about as comfortable. The capital costs, maintenance, fuel and labor costs for that aircraft are all significiantly less than the 737 but offer about the same comfort and convenience.
Reduced fleet types made sense in the 80’s and 90’s because airlines were focused on the hub and spoke model. It allowed an airline to use aircraft interchangeably and since fuel costs were extraordinarily low, load factors could be as low as 60% and an airline could still make money.
Today, airlines need aircraft that are more pin-point appropriate for their routes. Short segment shuttles should be flown by Q400’s while longer segments with greater density should be handled by 737s and A320s. Large trunk routes should be served by Boeing 757s, Airbus A320/321s and even smaller widebody aircraft such as the Boeing 767 and Airbus A330. Longer, thin routes should be served by the upcoming Boeing 787 and A350-900 aircraft while long, high density routes will be better served by the Boeing 777, Airbus A350-1000, Boeing 747-800 and Airbus A380.
There will be increased demand for a new kind of aircraft. One that is a re-birth of the original DC-9 and Boeing 737. A 100 to 120 seat aircraft that can fly 25% more efficiently over route segments of 500 to 1000 nautical miles. Bombardier (Canada), Embraer (Brazil), Mitsubishi (Japan), AVIC (China) and Sukhoi (Russia) are all working on such aircraft or already have such aircraft available for order. Boeing and Airbus don’t.
The days of flying a regional jet such as an Embraer ERJ-145 or Bombardier CRJ-200 are over. They cannot fly profitably short or long, thin routes anymore as they offer, at best, only 50 seats and a product that is quite unpleasant for trip durations over 1 hour.
Legacy airlines no longer can afford to “sit” on routes to protect them for use at later date. All of the capacity cuts made so far are squarely aimed at routes that do not generate sufficient revenue to justify their existence. To serve those routes in the future, they’ll require an aircraft whose economics ENSURE profit.
That means airlines will seek to merge and become bigger because size permits greater fleet diversity and fleet diversity means more revenue per passenger. Even airlines such as Southwest, Airtran and Frontier will have to begin considering the value of “right sizing” their fleet to their customers. To some degree, Airtran does that with their mixed fleet of Boeing 717/737 aircraft.
Not first class. Not really. To misquote the movie Jerry McGuire, today’s first class is really a whole different lifestyle, not just a more comfortable seat.
It’s a whole different show in coach, however. Just for kicks, I looked up the seat pitch on a Braniff 727 for coach in the 70’s. Today’s seat pitch on a legacy carrier is about 32″ with an inch variance. For a 6’2″, 260lbs man, like myself, that means a pretty uncomfortable ride. Braniff’s seat pitch was 38″. (in the future, I’ll provide some cites for such information but I looked that up 3 or 4 months ago and I can’t remember where I found it now.) That missing 6″ drives me crazy.
The truth is, a 32″ seat pitch makes sense economically. The average flight sector here in the US is less than 2 hours (Why do I always seem to be on 3+ hour flights?) and 32″ is plenty tolerable for 99% of us for the price and time spent in the seat. There are even some airlines who are adopting better seats for once. Not harder, thinner, flatter seats. Seats that are a bit more ergonomic, better contoured and, best of all, designed in a way that a 32″ seat pitch offers just a touch more space. Airtran’s Recaro seats on their Boeing 737-700 fleet are a great example of this.
For a time, American Airlines *increased* their seat pitch from 1 to 2 inches in the late 90’s / early 00’s. (Later reduced again post September 11, 2001 to provide a greater potential load density) I’d rate that current Airtran seat the equivalent and that means a lot coming from me. I should also mention that Airtran offers affordable upgrades to their Business Class product priced about $40 to $80 per segment and I’ve found them quite easy to get even at the gate.
Delta is about to install a new seating product from Thompson that is a kind of herringone pattern that offers greater legroom, an armrest for both arms and even greater privacy. Still more surprising is that this new seating configuration actually allows them to *increase* the seat count on an airplane. Look for this in their international 767 airplanes first although I suspect favorable customer acceptance will cause it to show up on other airplanes in the future too.
I think that one day we’ll see a greater number of choices for seating on many airlines. It’s already starting now to some degree. Airlines such as United Airlines and Jet Blue and US Airways have started selling seat locations that have greater seat pitch and/or favorable location(s) for slightly more premium prices. United Airlines offers Economy Plus with greater seat pitch as a sub-section of their coach cabin and having tried it I’d say it was worth the extra $30 / segment I paid. US Airways is selling location on existing configurations such as exit aisle seats, bulkhead seats and aisle seats all for a slight increase in price. Jet Blue has been reconfiguring their aircraft to offer a choice in seat pitch at varying prices.
Jet Blue’s model is where I expect the majority of legacy airlines will go. Over time, new seating products such as Delta’s (described above) combined with varying seat pitches will allow the airlines to price discriminate among their customer and generally *increase* their revenue without necessarily a loss in total passenger capacity.
30 years ago, the model was to price discriminate on the basis of flight convenience. A passenger who bought far in advance paid less than an impulse buyer. Then airlines such as American Airlines realized that an unfilled seat was lost revenue and began offering unfilled seats at prices that includes restrictions on flight times and days (convenience).
Next we’ll see far greater choice in our prices based upon seat pitch, location, service, advanced purchase, travel dates and times and even based upon how much luggage you want to carry (already happening.) My prediction is that seat choice will be the prime discriminator. Today’s passenger most wants a decent seat and a flight that takes off and arrives on time. The airline that provides that wins.
