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Aviation History
1957
1957 - 0778.PDF
784 FLIGHT CIVIL AVIATION . . . TOO MANY AIRCRAFT FOR B.O.A.C.? ^ have already noted that B.O.A.C.'s £195 million commit-ment to new aircraft exceeds by a very large amount that of any other world airline. It is nearly double that of PanAm, whoare the second most heavily committed (about £100 million). B.O.A.C. have on order 18 Britannia 312s, 19 Comet 4s, 15Boeing 707s, and—as announced on May 22—35 Vickers VC-lOs. How will all this capacity match up to traffic? The order for35 Vickers VC-lOs alone represents a very large amount of capacity—equivalent to about three times that of B.O.A.C.'s totalfleet in 1956. The VC-10 fleet may not be in full service until 1965; but add the traffic potential of the other aircraft on order andit appears that, even assuming a truly prodigious increase in business, the Corporation will have too much equipment on itshands in 1965. The revenue traffic carried by B.O.A.C. last year amounted toabout 164 million short-ton-miles. From now on the Corporation will be most competitively equipped, and its traffic should expandat least at the same rate as the world average, which is about 15 per cent per annum. At this rate, traffic in 1965 will be about 575million ton-miles. To carry this traffic, assuming a load factor of 60 per cent, acapacity of 960 million ton-miles will be required. How much will in fact be available?Assume that all piston-engined equipment, including DC-7Cs, is retired by 1965. Assume also that the 15 Britannia 102s willhave been disposed of by then. Capacity of each fleet is therefore as follows: Malayan Airways last month celebrated their tenth anniversary. Their fleet consists of eleven DC-3s—one of which is shown here—and three D.H. 89s; between them they flew almost 24,000 hours in 1956. Fleet Boeing 707 Vickers VC-10 Comet 4 Britannia 312 No. 15 35 19 18 B.O.A.C'1 Unit P'load (short tons) 19 15* 10 14 Capacity in Block speed (m.p.h.) 480 480* 420 310 * Estimates only 1945 Utilization <hr.) 3,000 Capacity ton-miles 410m 760m 240m 235m Total: 1,645m This is 70 per cent too much capacity, and still too muchwithout the Britannia 312s and Comet 4s. It seeais highly unlikely that B.O.A.C. can count on a 20 percent annual rate of traffic-increase up to 1965; but even assuming this, Britannia 312s and Comet 4s would still have to be disposed ofto avoid excess capacity. The conclusion seems clear: B.O.A.C. must be planning on anall-jet fleet of 707s and VC-lOs. And they appear to be counting on big increases in traffic to fill them.Even more illuminating is a matching of B.O.A.C.'s traffic and capacity in 1962. If traffic grows at the average world rate,B.O.A.C. will find themselves with 35 per cent too much capacity —even assuming that all Britannia 102s and DC-7Cs are sold by1962. And the Corporation may still have too much capacity in 1962 even if a higher (20 per cent) annual increase in traffic isachieved between now and that date. TAPPING THE TRAFFIC fl^HAT justification is there for those engaged in air transport" ' market research to assume that traffic will increase at a higher or at a lower rate than in the past? And what will be the effectof reduced air fares upon traffic growth? Will there ever be saturation of the market? These are questions which everyone interested in the future ofcommercial aviation is asking; and they are questions which Dr. Theodore P. Wright, vice-president of Cornell University, hasbeen studying, as readers of the American journal Aeronautical Engineering Review will have noted. Dr. Wright has a theory that the potential market for passengersincreases inversely as the cube of the fare. Thus, if the size of the available market, say in the U.S.A., is 10 million people, all ofwhom could fly today at an average fare of 5.34 cents per passenger-mile, the rule states that if fares were to be dropped to3.31 cents (present U.S. first-class rail fares) then the potential market would expand to 42 million people. Obviously, reductionof the fare to zero on this hypothesis would mean that the whole population would fly, which is absurd; but again taking the caseof the U.S. domestic market Dr. Wright assumes that the point of diminishing returns, or saturation, would begin to occur atabout 50 million persons, which is about 30 per cent of the U.S. population. A reduction in fares to 2 cents per passenger-mile(bus rates) might perhaps mean a potential of 100 million people rather than the entire U.S. population. He illustrates his law in the graph reproduced below. Theupper curve indicates the measure of the public's ability to pay, and roughly parallels the curve of air fare versus market potential.He shows also a plot of household refrigerator prices versus sales from 1925-37, which followed the same "inverse cube" relationship. Dr. Wright makes, too, a forecast of the growth of air transportup to 1980. This is illustrated in the other curve. He says that all developments—in business, transport or what you will—advancealong such a classical growth curve. Starting slowly, progress passes through a long steady period, then tapers off. Dr. Wright'scurve shows us now near the middle of the steep ascent. 200 190 ISO 170 160 ISO 140 130 120 no 100 BO 70 50 40 30 20 10 i ALTERNATIVE GROWTH /' CURVE WORLD / > / nraxDiu iL7 HIS f^ /tz 1 > ATE/^* t 7 t i Ai/ / // y '/ «-SPECU U.S. DOMESTIC TURBO JETS -PISTON 1 1 OBABLE- /PESSIMISTIC / / .ATION • \^^ tOBABLE" r NUCLEAR - RAM JET I 1 (Left) A forecast by Dr. T. P. Wright—see column above—of alternative growth possibilities of world and U.S. domestic air traffic. (Below) The law of diminishing returns applied to air transport. Generally, commodity price and potential market follow an approximate inverse-cube relationship, which must to some extent be related to the public's income (upper curve). The vertical scale is logarithmic. •/.OF FAMILIES RECEIVING MORE THAN , 6 8 10 20 40 60 80 100 T 600 500 400 — 300 y 200 100 10 • 6 E 5' •A 4 s. £ 3 - 2 21-5 y»« iaooojooo MORETHAN* 15000-SV. ^RELATION OF POTENTIAL MARKET - TO AIR FARE VARIATION OF SALES - TO UNIT PRICE ELECTRIC REFRIGERATORS 1935-1937 I 10 15 20 30 POT VARIATION OF FAMILY INCOME DISTRIBUTION BY SALARY \j- MORE THANH —fSJ»5P00-42*/; \ 2.500000 \l68P0O.O00 80 100 150 200 , 300 400MARKET (millions) 20,000 15000 10,000 8000 . 8000 • I 4000 ; S300 : 2000 ' 1,000 1940 1945 1950 1955 I960 (965 1970 1975 1980 •15 2 •3 -4 5 -6 7 8-91 15 2 UNITS SQlD(millionc) 3 4 5
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