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Part 2: Bethune On Sonic Cruiser And A380

Tue Sep 17, 2002 6:18 am

Continuing the interesting discussion [started by SAS23/Ceilidh] of PART 1; over 5500 hits, over 200 posts! It became too large for modem users [like me...]

I'll repost the last posting on PART 1.

Besides from the cargo department, I think most of us will agree that the A380 is basically aimed at the hub concept. The number of point-to-point routes that can/will sustain 380 service is very limited. So I fully agree with RogueTraders question on the relevance of how these hubs will develop in the future.

RT maintains that the hub is over its top, and the growth will be generated mainly by hub-bypassing point-to-point services. This maybe true as far as domestic services are concerned, but I don't necessarily see this happening on long-haul routes. On the contrary, the low cost carriers [LCC] indeed are doing extremely well, they are eating away the major carriers in their domestic department. So the majors will more and more [be force to] concentrate on long haul, desperately trying to maximize operational efficiency [read 380].

The thing with long-haul flying is that except for a couple of cities with huge O&D [London, New York, Tokyo], most airports do require connecting pax to maintain a decent number of long-haul flights. So they need the hub in order to maintain the long-haul flights. I mean, even if air traffic will double in the next 20 years or so, I still don't see flights between lets say MSY-HAM. We may see MSY develop flights to some European hubs, and vice versa we may see some HAM develop flights to some major USA hubs, but I don't see any direct flights between these cities, not even in twenty years from now. MSY and HAM off course are only taken as an example . . . there are a huge number of city pairs that will never see non-stop flights between them. This is the strength of the hub!

As far as Europe is concerned, the LCCs are making life hard for the majors. They basically forced SN [and SR?] out of business. The LCCs are making it harder for the smaller hub-carriers to find sufficient number of pax to sustain their short-haul flight. The irony is that short-haul flights are required to maintain a decent number of long-haul flights; the LCCs may very well force long haul flights to be concentrated into a smaller number of hubs, which will provide long haul flights to a larger number of destinations.
One could also argue that the way the majors are heading [into three or four alliances] will also make sure that the smaller carriers/hubs have no significant future, thereby increasing the status of the main hubs.

So to me the question is: will multiple daily 330/767/777 frequencies win over a smaller number of daily 744/380 flights? Checking out the BA timetable [not counting overhead planes...], I see that even today BA has over a dozen routes where they operate multiple daily 777/744 flights. Why? Simply because the market obviously is big enough, and they have no larger equipment available to do the job. Will they revert to 380 once it becomes available? Is the three times daily LHR-BOS frequency so appealing to the average pax, that many will walk away from BA if the frequency is reduced to double daily on a 380? How convenient are frequencies on long-haul flights, once they have been developed into a daily frequency? That's the real question to be answered. I can understand that a daily 330 service will win over a 3x weekly 744/380 service. But will double daily 330 win over a single daily 744/380? I'm not so sure. The single daily 380 will most likely be cheaper [either to the pax or to the airline...], and the 380 will also provide more space per pax. Now don't argue that the airlines will use this space for even more pax, since this argument only makes the 380 even more appealing to the operators! And airlines will do everything these days to reduce costs! The 380 will be very helpful, provided the market is large enough to sustain the number of seats.

Why hasn't BA ordered any 380s? Simply because their home airport [LHR], and more specifically BA's long-haul terminal [T4] in not in a position to handle multiple 380s. BA will have to wait until T5 is ready before they can start any significant 380 operations. And we all know how long it took to decide to build T5, we can only guess when it will be operational . . .


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RE: Part 2: Bethune On Sonic Cruiser And A380

Tue Sep 17, 2002 6:28 am

BA haven't the cash to order anything right now, and evaluating new aircraft over the past few years must have been a task with management changing direction constantly like a warship dodging torpedoes!
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RE: Part 2: Bethune On Sonic Cruiser And A380

Tue Sep 17, 2002 6:43 am

Also does the 380 fit into BA's current yield-dominated strategy?I don't know if it does.I see the future for long-haul as hub based BUT using 767/777 type aircrafts allowing more frequent flights than a 380 etc.This would also allow in the future,more LHR-small US city flights that would by-pass the US end of the hub.
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RE: Part 2: Bethune On Sonic Cruiser And A380

Tue Sep 17, 2002 7:09 am

Donder10: On the first sight, BA's strategy to focus on the high yields in the forward cabins seems to make a lot of sense, but I consider it to be very risky.

To give up the US end of a hub would mean that you have to keep up a lot of long and thin routes, where thin in this case means a plane of at least the size of a 767 - more than 200 seats.

Just imagine the effect the next economic downturn will have on such a strategy. Corporate travel policies will get more restrictive, which means a drop in overall demand, but also a decreasing yield. The long-thin strategy lead to a decrease in frequency (and flexibility) or even the termination of certain routes, to prevent you from flying half filled planes over the pond loosing a lot of money.

At the end, you will come back to the hub-and-spoke system on intercont flights, since there is no option to downgrade such a flight to an A319 or something due to range limitations.

On the US domestic market, things are different, where you can easily operate transcons with 73G or an A319 if demand doesn't justify a larger aircraft.

Just my thoughts. I think Lufthansa is doing well to keep the old hub and spoke system and complement it with some long/thin O&Ds like the new BBJ DUS-IAD service.
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RE: Part 2: Bethune On Sonic Cruiser And A380

Tue Sep 17, 2002 7:18 am

Let's rename this "The Thread That Would Not Die."  Big grin
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RE: Part 2: Bethune On Sonic Cruiser And A380

Tue Sep 17, 2002 8:05 pm


I'm looking forward to PART 3....
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RE: Part 2: Bethune On Sonic Cruiser And A380

Tue Sep 17, 2002 8:30 pm

Humm, just like the Belgium news threads.

3-7 users just won't stop discussing local / un-interesting details publicly.

Belgian Aviation Update : 133 post, 2881 views, start 08-29-02

Perhaps these things are better handled by group e-mail ....
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