Kerckhoff Coffeehouse: New 747 or New Concorde?

Tuesday, January 18, 2005

Yahoo! News - Airbus Unveils Largest Commercial Jet

(AP Photo/Christophe Ena)

800 passengers? That's one big freakin' plane. I can't help but wonder though, whether the A380 won't be the heir to the Concorde rather than the 747. I tend to agree with Boeing's belief that the real market opportunity is in shorter, direct routes using smaller planes. I think the profitability - even through the nightmare of 2001 - of airlines like Southwest bears this out.

How much demand is there going to be for an 800 passenger long-range jet? Particularly in light of the dissipation of the hub-and-spoke business model of how airlines operate. And, how long will it take for that demand to translate into recouping the $13 billion R&D investment the French have put into this plane?

Perhaps my thoughts are colored by my distaste for most things French, but I have a feeling that their penchant for glory before sense may have led our brie-eating friends into a colossal mistake.

- served up by Nomad @ 2:34 PM

Comments:

This is the money quote: "But the A380, which was partially funded by European governments..." What else do I need to know? Euro taxpayers got stuck with funding a huge industrial project which may or may not have any payoff for the involuntary investors. If it was a good business deal, they could have borrowed the money from the private sector, no? But the poor taxpayers are a lot less able to take their money elsewhere if they decide that the project is a loser.

# quipped

Doctor Bean : 2:57 PM, January 19, 2005

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