Tuesday, June 14, 2005

Economy of Scale?

The new A380 from Airbus sets up the differing long views of Boeing and Airbus, the world's two most important and largest passenger jet builders. Airbus's A380 an 880 passenger Super Jumbo (a 747 seats a max of 416) exemplifies the idea that the industry will want to jam lots of passengers in for long flights (it also can fly farther because of the efficiemcies of the engines) and hopefully this will create cost savings. Boeing on the other hand has a new plane, the 787 Dreamliner, that has a max seating of 400 and is designed for shorter flights.

I think Airbus has made a mistake here. In a world that is moving towards increased inequality at the same time there is overall growth more and more yuppies and firstworlders like myself will have money to travel and we like Midwest Airlines type service and space. I think regional airlines will make a run for the market and do fairly well.

The only way I can see the A380 doing well is if state run airlines, a dying breed, in Asia, Latin America and Europe buy them and make sure they fill them up before they take off.

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