FlightGlobal.com
Home
Premium
Archive
Video
Images
Forum
Atlas
Blogs
Jobs
Shop
RSS
Email Newsletters
You are in:
Home
Aviation History
1985
1985 - 0693.PDF
high development costs and artificially low prices which, in turn, produce programme break-even requirements of several hundred units. Such a mistake in reading the market can be costly and, perhaps, fatal". In the mid-1960s Boeing's key airline customers were easily defined. The top 20 airlines (see diagram) accounted for 75 per cent of the Western World's total revenue passenger miles. They were well estab lished and had stable route systems. Boeing knew its customers, and could expect an average of two reorders ("the lifeblood of commercial programmes") for each initial purchase as their clients pros pered (see diagram). "With this knowledge, the risk element of go-ahead decisions could be evaluated not only on the quantity of initial orders achieved, but on a high probability that significant reorders would follow". Today, as deregulation boosts the number of carriers in the USA (see diagram), Boeing's customer base is more fragmented. The established US carriers modify their networks, concentrating their strengths and minimising their losses (see map of Western Airlines routes). The fleet mixes of aircraft types are constantly changing to enable the airlines to capitalise on specialised market niches in which they can prosper. "The end result", says Sutter, "is that few, if any, US carriers today can predict Mg»W8 Limited markets Existing products with any degree of certainty what their optimal fleet mix will be in five years. Fewer still are willing to commit to a large long-lead launch order for a new design". A similar pattern emerges on the inter national front. More-liberal bilateral and multilateral traffic agreements have allowed a host of smaller carriers to carve out their own market niches as they develop regional and long-haul routes to serve their population centres (see map of Cathay Pacific's development). Among the non-US airlines, market shares have been redistributed (see diagram), and again aircraft requirements have changed. "As a result" says Sutter, "long-term equipment planning in the international arena is becoming nearly as difficult as it Top twenty world airlines U.S. Airlines 1965 Nan-U.S-Airtihes United TWA Pan Am | American Eastern I Delia Northwest National 54% Cumulative total ^- ol world rpm Continental Western British Airways Air France I Air Canada Japan Air Lines Alitalia Lufthansa ""KLMJ SAS[ 23% Cumulative total •• r' of world rpm Quantas Swissair 0 2 46 S 10 0 24 6 8 Percent of world's rpm 10 Reorders for Boeing airliners Aeroplanes 2000 15Q0 _ 1000 500 "n .74% | 26% 75% 25% • c n 57% 43% Reorders Initial orders [77% | 33% Aeroplanes 70% 5000 4000 3000 2000 1000 707 727 737 747 Total Including December 31, 1983 <a" models> Left Boeing's bottom line—only large markets and the prospect of technological advances justify an all-new model. Top In 1965 the top 20 airlines accounted for about three-quarters of the Western World's passenger revenue. Above This stable market gave each Boeing project a good chance of gaining reorders. Below Since deregulation in the USA Boeing's customer base has fragmented. The market is changeable and the requirements are more specialised. Maps below Even established airlines like Western have modified routes, making Boeing's market predictions difficult 140 ,| 120 CO ° 100 "O CD I m 1 60 o 1 40 o E 20 • z 0 19 - Number ol certificated U.S. carriers Deregulation 66 70 74 78 82 86 year i r^— Western Airlines * I 1* m o .it- cn FLIGHT International, 9 March 1985 31
Sign up to
Flight Digital Magazine
Flight Print Magazine
Airline Business Magazine
E-newsletters
RSS
Events
