Wednesday, April 27, 2005

Is bigger better?

The world largest jumbo jet just flew today according to BBC News. Airbus A380 is impressive indeed, 840 passengers, twice as many as Being 747. But is this neccessary better, in term of financial profitability? Already the company has overan its project budget. It already received an order of 154, but it need to sell 700 airplane in 4o years to make a profit. However, the second hand aircraft market, which is much cheaper than the A380 can cut into the company sale.

Boeing, after design a similar plane giant but decided not to produce them. Boeing focus instead on the 787 Dreamliner, strangely even smaller than the 747 with only 250 passengers. "Boeing argues more passengers will want to fly between smaller regional airports, rather than the select giant hubs required to service A380s." (BBC) Beside the 787 has a fuel saving feature, 20% lower than the same size plane.

Is bigger better? Only time will tell. Much is depended on the airline market, not the aircraft market. Regardless Airbus is taking a high risk strategy and Boeing show itself to be risk adverse.


Blogger Triple B said...

Airbus no matter what will be bailed out by the EU, so I guess they can afford to take the risk. Socialism at its best.

7:08 PM  

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