Thursday, April 28, 2005
What the new A380 aircraft means to you
Everybody is saying basically the same thing. It is a wonder that something so huge can actually get off the ground.
It is instructive that some articles made reference to the fact that the event was taking place 101 years after the Wright brothers’ feat at Kitty Hawk. Instructive because the earlier event made this latest event possible in more ways than one. (see earlier post below on Wright brothers.)
The brilliant Wright brothers proved through their intensive tests in wind tunnels they created themselves that it was possible to get virtually any weight off the ground, you just had to calculate the lift and what you required to get the lift you wanted. That is wing span, shape etc. It was that simple.
Not very different from the principle that you can get a ship of virtually any weight to float on water.
It is even more fascinating to note that before the Wright brother’s land mark achievement there were enough influential people who did not believe that a flying man-made machine was feasible.
But the sceptics this time are of a different nature, actually a commercial nature to be exact.
There is plenty of talk right now after the successful Airbus 380 test flight recently, on who is right about the commercial viability of a really large passenger jet.
The general feeling is that the market is too small to justify this size of aircraft In other words most people believe that it is not economically viable.
The guys at Airbus (and this writer as well? believe that it will be a HUGE commercial success. The guys at Airbus are really not telling us why they think their aircraft will soar business wise, in simple enough language. Probably for obvious reasons – the competition is listening in to every word and this might not be the time to reveal their thinking.
According to me, there is a simple reason why the A380 will be a huge success.
When you increase the carrying capacity of a commercial transport vehicle, you also reduce the cost per person of getting your passengers from one point to another. So without even considering the many other technological aspects that cut costs for any A380 operator, there is already a cost advantage in increasing the passenger numbers.
Now we all know that the internet has made the world a smaller place. But most of us do not realize that there is something else the internet has also done. And that is, it has boosted and encouraged world-wide travel more than anything else. Just like radio boosted sales of music instead of killing it as was initially predicted by virtually everybody, the internet is already doing the same to world travel.
The only problem is that until now, it has been too expensive. Cost cutting measures and cheap fares by successful budget flyers have had only a very limited impact. Now there is a real opportunity to cut down the cost of flying to less than 50% of what it is now with this larger aircraft.
While the plane has the capability of carrying 840 passengers, airlines are planning seating configurations that will limit loads to slightly more than 550 people. I have this feeling that they will revise those numbers upwards shortly after this giant goes into service in mid 2006.
I also have a hunch that this is what the folks at Airbus have seen. Much as I hate to say it, they’re right and they’ll be proved so, very soon.
And don’t forget that Airbus appears to be on a roll in recent times – the company is almost certain to outsell Boeing for a second straight year in 2005. And surely they must know something nobody else seems to know to have spent $13 billion over 11 years developing the A380.
==================
Business Wisdom
How cautious can a business be and still end up on the receiving end of vioxx lawsuits? All of life is a risk so better to take calculated ones all the time.
Neil Young: Heart of Gold is a movie that will teach you a thing or two about business... the music business is not any different from your web-based enterprise you know.
stock option trading has always been an important subject for any entrepreneur or investor. That's why it pays to know which web sites to visit.
It is instructive that some articles made reference to the fact that the event was taking place 101 years after the Wright brothers’ feat at Kitty Hawk. Instructive because the earlier event made this latest event possible in more ways than one. (see earlier post below on Wright brothers.)
The brilliant Wright brothers proved through their intensive tests in wind tunnels they created themselves that it was possible to get virtually any weight off the ground, you just had to calculate the lift and what you required to get the lift you wanted. That is wing span, shape etc. It was that simple.
Not very different from the principle that you can get a ship of virtually any weight to float on water.
It is even more fascinating to note that before the Wright brother’s land mark achievement there were enough influential people who did not believe that a flying man-made machine was feasible.
But the sceptics this time are of a different nature, actually a commercial nature to be exact.
There is plenty of talk right now after the successful Airbus 380 test flight recently, on who is right about the commercial viability of a really large passenger jet.
The general feeling is that the market is too small to justify this size of aircraft In other words most people believe that it is not economically viable.
The guys at Airbus (and this writer as well? believe that it will be a HUGE commercial success. The guys at Airbus are really not telling us why they think their aircraft will soar business wise, in simple enough language. Probably for obvious reasons – the competition is listening in to every word and this might not be the time to reveal their thinking.
According to me, there is a simple reason why the A380 will be a huge success.
When you increase the carrying capacity of a commercial transport vehicle, you also reduce the cost per person of getting your passengers from one point to another. So without even considering the many other technological aspects that cut costs for any A380 operator, there is already a cost advantage in increasing the passenger numbers.
Now we all know that the internet has made the world a smaller place. But most of us do not realize that there is something else the internet has also done. And that is, it has boosted and encouraged world-wide travel more than anything else. Just like radio boosted sales of music instead of killing it as was initially predicted by virtually everybody, the internet is already doing the same to world travel.
The only problem is that until now, it has been too expensive. Cost cutting measures and cheap fares by successful budget flyers have had only a very limited impact. Now there is a real opportunity to cut down the cost of flying to less than 50% of what it is now with this larger aircraft.
While the plane has the capability of carrying 840 passengers, airlines are planning seating configurations that will limit loads to slightly more than 550 people. I have this feeling that they will revise those numbers upwards shortly after this giant goes into service in mid 2006.
I also have a hunch that this is what the folks at Airbus have seen. Much as I hate to say it, they’re right and they’ll be proved so, very soon.
And don’t forget that Airbus appears to be on a roll in recent times – the company is almost certain to outsell Boeing for a second straight year in 2005. And surely they must know something nobody else seems to know to have spent $13 billion over 11 years developing the A380.
==================
Business Wisdom
How cautious can a business be and still end up on the receiving end of vioxx lawsuits? All of life is a risk so better to take calculated ones all the time.
Neil Young: Heart of Gold is a movie that will teach you a thing or two about business... the music business is not any different from your web-based enterprise you know.
stock option trading has always been an important subject for any entrepreneur or investor. That's why it pays to know which web sites to visit.
