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Aviation History
1956
1956 - 1671.PDF
23 November 1956 833 At present unfamiliar, the silhouette of the Fokker Friendship will shortly be seen in many countries. This excellent local-service machine will also be made by Fairchild. (Below) Backbone of the air-transport economy of much of the world, the DC-3 has an almost unnatural pro- pensity for "going on going on." In 1962 it may still be taking a fair part of the world's traffic, and correspondingly fewer new machines will be sold in consequence. a substantial new market will result. We shall, undoubtedly, seea steady decline in fare-levels over the years, as the air transport industry re-equips with more efficient aircraft tools with which tomanufacture its ton-miles. Yet there is no sign that other pro- duction costs can be held down to enable full advantage to betaken of more economical equipment. And there is no evidence to encourage the belief that a widespread reduction of air-trans-port prices will in fact attract the mass market needed to increase the margin of profit—a margin which, it must be remembered,is only about one per cent of turnover for the whole industry. The only airline experience of the effect of substantial fare-reductions was that provided by the introduction of tourism in 1951. Five years later it is perhaps 40 per cent of the world total,and in the country of tourist travel's origin—the U.S.A.—35 per cent. Tourism did not result in a marked increase in worldtraffic and in airline revenues—indeed in Europe, as Mr. Wheat- croft's study showed (Flight, July 13 and 20) there was some dis-illusionment about the lower revenues which persisted after the introduction of tourist rates.We do not therefore feel it is reasonable to assume that fare- reductions will steepen the traffic curve between now and 1962. What else might? Possibly, the opening up to western airlinesof international flights to the U.S.S.R. and China. This is already happening, but it is impossible to predict the likely extent of thesenew markets. Certainly no airline can with justification equip in anticipation of big business beyond the Iron Curtain. But,so likely is the possibility of some (perhaps considerable) extra business, that we would not be justified in assuming that thetraffic gradient for the next six years will seriously, or even slightly, decline. It would, we feel, be reasonable to assume that the gradientwill continue at the 1948-1955 average of 16.6 per cent. But, bearing in mind the lessons learned from the pessimism of pre-vious traffic prophets, the round figure upon which we shall base our prediction is 17 per cent.Extrapolating the traffic curve at this slope to the year 1962, we arrive at a figure of approximately 22,000 million tonne-km. We now have a basis for assessing the aircraft capacity requiredto haul this traffic—and whether the transports on order, plus the remaining present-day transports, will be sufficient to meetthe demand. Load factor, that useful measure of the air transport industry'shealth, has over the past few years remained remarkably steady among I.A.T.A. carriers at about 60 per cent. This would seemto represent a reasonable balance between supply and demand. A higher figure would suggest a shortage of capacity, and trafficbeing turned away; a lower figure would suggest over-capacity. Assuming, therefore, a load factor of 60 per cent, the capacityneeded to carry our estimated 22,000 million tonne-km in 1962 will be approximately 37,000 million tonne-km.Will all the new transports on order, plus remaining present- day transports, be sufficient to meet this?The first conclusion of this analysis is that it will not—by the considerable margin of 11,000 million tonne-km. And this assumes a 52 per cent survival of existing piston fleets.Even assuming that 75 per cent of present-day fleets are still in service in 1962, 7,400 million tonne-km of new aircraft capacitywould still have to be ordered to meet the traffic demand. But, quite clearly, nothing like three-quarters of present-day airlinerswill still be in scheduled service six years hence. We believe, from the views being expressed by the big world operators, thatthe next few years will see a fast writing-off of piston-engine trans- ports. Not simply because they will be wearing out (althoughmany of those already six or more years old in 1956 will be), but because, to quote Mr. C. R. Smith, president of AmericanAirlines: "It is an axiom in manufacturing that no existing tool, however new and good its physical condition, is an efficient toolif its original advantages have been surpassed by a better tool . . . That is why airlines ... invest huge sums in new equipment whentheir existing machines are still in first-class operating condition." It would, from a quick consideration, appear reasonable toassume that only 30 per cent of the existing world piston fleet is likely to be in scheduled service in any numbers in 1962. Theremainder would be written off, or at work on non-scheduled operations—cargo, charter work etc. But a more careful con-sideration leads us to make a less drastic disposal of the present- day fleet. New transports are expensive: the majority of opera-tors may feel as Mr. Smith does, but they will—with average profit margins remaining small—be less inclined to replace theirexisting fleets. They will, we feel, continue to squeeze out of them the last penny of value rather than invest in new, costly (Left) Probably the most efficient large transport flying today—the Bristol Britannia. (Right) Typifying America's domination of the air transport market—Lockheed's L. 1049 G Super Constellation.
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