Sunday, May 8, 2011

An important omission by critics of Airbus A380

Airbus' newest aircraft, the A380 (ignoring the A350 XWB), is often pitched against Boeing's latest aircraft, the 787 Dreamliner. Not directly, since these aircraft aren't comparable, but from a strategy perspective. It has been frequently said by analysts and others that Boeing has made a bet that flying passengers will migrate from hubs towards direct flights between points. In contrast, these analysts say, Airbus' development of the A380 assumes that passengers will migrate towards the model of flying between large hubs, and later taking connecting flights to the smaller destinations.

Who is right? We can't say today, and we'll have the answer only in a few decades. What we do know for sure is that the critics of the A380 aircraft [and these are frequently the same people who favor Boeing's strategy and predict its victory] have overlooked an important point - significant traffic will continue to fly between the most developed, most urban cities of the world.

There is no reason to believe that significant numbers of people will stop flying between these cities. For example, there's little reason to believe that the following routes will get less crowded in the future:
  1. Paris - New York
  2. London - New York
  3. Mumbai - Delhi
  4. Johannesburg - Cape Town
  5. Hong Kong - Shanghai
  6. Singapore - Kuala Lumpur
  7. Paris - Montreal
  8. London - Washington
Which aircraft can best serve these busy routes? Which aircraft can reduce congestion by lifting double or triple the number of revenue passengers in a single flight, all while dramatically reducing seat mile costs? It's the Airbus A380. Because I expect a high volume of air travel to continue between the most important cities of the world, I believe that the respective strategies, if any, by Airbus and Boeing might not amount to a zero-sum game. It's Boeing's alleged strategy that might turn out to be not so correct - Airbus' bet on hub-to-hub travel looks just fine to me. More so, since I haven't even figured the rise of new cities in the above thoughts. The A380's future looks safe.

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