FlightGlobal.com
Home
Premium
Archive
Video
Images
Forum
Atlas
Blogs
Jobs
Shop
RSS
Email Newsletters
You are in:
Home
Aviation History
1983
1983 - 0934.PDF
i PARIS SPECIAL There will be "an abundant opportunity for 80- to 150-seat aircraft". The first BAe 146 was delivered to Dan-Air this week be right; fares have to be set at levels where passengers flown produce adequate yield (revenue per seat kilometre). There are signs that the airlines are beginning to set their fares at a logical level, where the revenue from an air journey relates to the cost of providing that journey. If the air lines universally and voluntarily renounce the insanity of deep discounting, then the increased traffic may yet produce profits. Dilemma number one in aviation then will face the airliner and aerospace indus tries. The existing equipment will certainly be shown to be wanting and the next generation of airliners will begin to flow. What form will that new generation take? Foreseeing the answer to that requires a brighter crystal ball than most people in aviation would dare to claim to possess. While airline traffic is perhaps a relatively simple graph to draw, direct operating costs, in the form of labour charges and fuel prices, are virtually impossible to estimate accurately. How then does the board of directors of an airline calculate whether to buy existing or derivative technology for its fleet replace ment, or to sign a launch order for one of the much discussed but so far unseen new- technology aeroplanes? Currently the DC-9 Super 80, often with favourable financing, is the biggest seller among the airliners, and McDonnell Douglas is planning to consolidate the successful derivative formula with the DC-9 Super 83 and Super 90. Boeing is predicting a good response to its own derivative 737-300, poised to roll out in January 1984. The Boeing 737-400 and 737-500 models are further possible successors. These options leave a very cold climate in which to launch a new tech nology 150-seater. The market for the 150-seat airliner to the end of the century is predicted variously at 1,500 to 2,000 aircraft. If the range of existing and deriv ative models eats substantially into that market, the newcomers will be left fight ing for a prize which only one of them, or at most two, could possibly win. In fact they could all lose, by a curious feature of economic life that may well be peculiar to aviation. To recover its gargantuan development costs, a new product in the field of major airframes and engines must sell a certain minimum number. That number is not easily deter mined, but is undoubtedly so great that the break-even point is rarely arrived at before a new-technology product, specifi cally a new model from another manu facturer, becomes available. If, for exam ple, Rolls-Royce, Pratt & Whitney, and General Electric continue to refine their powerplants so fast that each one is super ceded before it can produce a profit, then subsidies of some form, from governments or elsewhere, will always be needed to support aviation. This could well be the biggest problem that aviation faces in the next decade—bringing the global market into equilibrium with the technological pace of change. Market forces There are, of course, market forces which might help to make it happen. Among the most significant is Annex 16 Type Certification, which will impose new noise regulations on subsonic jet aircraft. Some types in the USA are already falling under this legislation. Most countries require retrofitting or replacement of offending types around the mid-decade: USA January 1, 1985; UK January 1, 1986; other EEC countries December 31, 1986; Canada January 1, 1986. The main affected aircraft types are 707, 720B, DC-8, Trident, and Caravelle, giving a total of 991 aircraft in the world inventory due for replacement. Early models of 727, 737, DC-9 and BAC One-Eleven will also fall into the net, although retrofitting them may be more attractive than replace ment. The additional factor is fleet age. About 1,000 aircraft in the European fleet alone are now aged 14 or 15 years. They are mainly narrowbodies of the 727, 737, DC-9 type, and that market alone therefore offers an abundant opportunity for 80- to 150-seat aircraft, from BAe 146 to Airbusj Industrie A320 and beyond. These two special considerations apart/ standard economic forecasting predicts a „ growth in air traffic of 6 per cent annually, leading to a requirement for about 5,000" new 100-seat aeroplanes or bigger up tcC 1995. " Optimistic note Equally, business and private aviation^ will follow the economic recovery into a period of good health. Helicopters, to take, an example, will sell 26 per cent faster over the next ten years than during the" preceding ten, according to Sikorsky. The company's director of strategic planning predicts sales of 24,000 by 1992-63 per cent of them into the world's civil markets. And new types continue to reflect the unfailing optimism of small aeroplane designers and manufacturers in "smaller" aviation countries, as well as in longer established ones. In the commuter field half-a-dozen entrants are emerging from the early 1980s-SF340, ATR42,. Embraer Brasilia, Beech 1900, Casa Nurtanio CN235, Dash-8, and Jetstream 31 among them. And the military basic/primary trainer inventory now includes no fewer than 17 different models, competing for a market that can support hardly half of them. The second major dilemma is simply stated. Has deregulation been a good thing? Nobody can deny that opening up the aviation business to a variety of new small airlines has invigorated the lower end of the market in the USA, and although the lack of complications in that market is not matched in any other aviation area, there is some spin-off in Europe and elsewhere. The danger is that the long-term interests of passengers may not be served by newcomers coming in with below-cost fares, or with fares set according to cost structures that compro mise safety through skimping mainte nance or other lowered standards. If half the fascination of aviation lies in finding solutions to its dilemmas, here are some more to be working on. What, precisely and accurately, are the nature and extent of the subsidies—overt and concealed—enjoyed by major manu facturing organisations, either as a direct government funding, crossover from military to civil programmes and back, or help with tooling? And how can aviation—or any industry for that matter—expect to attract talent and skill when its key jobs remain at the mercy of economic shifts. Engineers are said to be in short supply worldwide, ye1 thousands have been laid off in response to market constraints. Until engineering and commerce can provide the job security and continuity that the professions enjoy how can we avoid Seattle and Wichitf being full of over-qualified cab drivers anc bright graduates in Paris and Londor opting for the Bar and the civil service? Answers in two years' time. | FLIGHT International, 28 May 11
Sign up to
Flight Digital Magazine
Flight Print Magazine
Airline Business Magazine
E-newsletters
RSS
Events
