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Aviation History
1983
1983 - 0030.PDF
The busy pre-flight line at Everett belies the likelihood of layoffs The Crystal Ball AIR TRANSPORT This year will be an unhappy one for almost all sectors of the air transport industry, and thus for its suppliers. Gener ally airline operating profits may improve, but since this will be the fourth successive year of net losses for the industry as a whole, borrowing costs will make sure the bottom line remains dismal. Of those carriers which do record profits, few will earn at the rate they need for financing new equipment. At the bottom of the airlines' troubles is world recession and the considerable over capacity that still remains in the industry. Theoretically, three years of enormous losses should have put many carriers out of business, thus solving the overcapacity problem. But support for national airlines by their governments, whether the support comes in the form of direct grants or credit guarantees, has made sure that the number of seats in the air is still far more than the market needs. Deregulation might be seen as the remedy. But it is taking a long time to work in the USA, where overcapacity still exists and bankers still seem amazingly generous with loans and extended credit arrangements. Braniff is, as yet, the only major casualty. Pan American will survive the year, however thin and battered. During the lean months manic fares competition will continue in the USA, and in the rest of the world "illegal" discounting will go on. In the second and third quarters fares and yields will rally, but overcapacity will ensure that tariff Flight assesses aerospace prospects for 1983. rises on the whole scarcely exceed any cost increases. The new year will be a rum one for the large aircraft manufacturers, and Boeing will make major employee layoffs at Seat tle. This will not be because Boeing is selling fewer aircraft than Airbus and McDonnell Douglas, but because it has got the 757 and 767 lines under way now, the 727 is coming closer to the end of its pro duction life, and sales of the 737 and 747 are not now as regular as they have been. The 1982 International Air Transport Association resolution to deal with illegal discounting will have very little actual effect, but "legal" discounted fares will be more flexible and more easily available. Illegal discounting will continue. The principal subject at the next lata AGM will again be illegal discounting, but this time discussion will concentrate on how to live with it, not how to stop it. The decision to launch the Airbus A320 will be delayed beyond 1983. Airbus has now formally said that the A320 won't appear before 1988, so a launch before 1984 is not at all likely. The longer the decision drags on, the more like a 1990s aeroplane the A320 looks, with brand-new technology including fly-by-wire primary controls. The 150-seater concept as such may even fade and die. Nobody is very sure any more that 150 seats is the magic number: SAS certainly isn't, and neither is 34 Lufthansa. Airlines' requirements are changing all the time because of the continuing recession. Nobody will be willing to commit himself to anything really new, not even Airbus, which has most reason to, in order to keep up its impetus. The extent to which McDonnell Douglas can continue its "rental" offers on DC-9 Super 80s will become clear. MDC would probably offer very attractive leasing terms to another large US carrier—say United or Delta—to win its business. If such a deal was concluded, the manufacturer would probably then harden its terms to other carriers attracted by the resurgence of interest in the Super 80. But MDC might compromise by offering attractive terms for outright purchase: all orders are hard to come by these days. MDC will keep its options open for launching the MD-100, a remodelled, re- engined DC-10, but it is unlikely that 1983 will be its launch year. Boeing's 767 sales efforts will be directed firmly towards selling stretched and long-range versions in overseas markets. This is where the push to clear twins for long overwater flights will begin in earnest. As regards the BAe 146, the present intention is to continue to market the aeroplane hard on the premise that there is a healthy future for the 146 once the world recovers its prosperity. FLIGHT International, 1 January 1983
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