5 ms·
Sure, it's obviously a matter of diminishing returns and opportunity cost. But the re-engine for the A380 was basically a rote, low-risk, B-team exercise for Ro
by wahern 4y ago
Sure, it's obviously a matter of diminishing returns and opportunity cost. But the re-engine for the A380 was basically a rote, low-risk, B-team exercise for Rolls Royce. All they had to do was tweak their existing generation stuff. The program was already well underway, and they still dropped it; they all but explicitly said the reason was, "meh, we lost interest". Something seems to have changed.
Putting my cynical cap on, my hot take is this: Everybody now realizes that Emirates and Clark are exactly right. As was Airbus.[1] Demand will blow past supply (i.e. runways and gates). Ticket prices will sky rocket. But from the perspective of the plane and engine manufacturers this translates to, "if everybody sits on their hands and does nothing, we're going to enjoy a windfall of profits". Clearly, IMO, Boeing, all the engine manufacturers, and now (somewhat despite themselves) Airbus, are going to passively collude[2] to bring about this windfall. All they need to do is sit tight and wait things out. The threat of competition isn't significant enough to break the collusion; there are too few players, the barriers to entry--regulation, technical and logistical expertise, etc--too steep, and like with housing little prospect that political reforms will make it easier to build enough new runways and airports to change the capacity trajectory.
Similar calculus applies to most of the established carriers. There's much more competition among them, but if the manufacturers are expected to continue to coast there's no angle to exploit in that regard and thus little incentive to agitate for disruption along this dimension, and so the carriers also get to look forward to windfall profits, notwithstanding that they'll be forking over much of it to the manufacturers. Clark just isn't cold-blooded enough to want to play that game; he's got too much of a fighting spirit. (Or perhaps more realistically it's also because if Emirates doesn't keep growing it won't be viable in this prospective future reality?)
[1] Boeing wasn't wrong, either, but point-to-point only bought a couple of decades of supply expansion.
[2] I think there's an economics term for this, but I don't remember it.
- rippercushions 4y agoBoeing, Airbus, and Rolls-Royce are going to be in for a rude awakening if/when the Chinese aircraft industry ever gets their shit together, and/or if batteries ever become light/dense enough to support electric passenger flight. That said, watching the Comac C919 shitshow (14 years and still not in revenue service, and this is for a 737/A320 clone), I'm not holding my breath. The twin-aisle C929 is still a decade away at best, and it'll take a good long time until any Western airline trusts it; even Chinese turboprops (Xian MA-60/600/700) have so far only managed to find buyers in Africa and the poorer bits of Asia. https://en.wikipedia.org/wiki/Comac_C919 https://en.wikipedia.org/wiki/Comac_C919 https://en.wikipedia.org/wiki/CRAIC_CR929 https://en.wikipedia.org/wiki/CRAIC_CR929
- seanmcdirmid 4y agoThe C919 and C929 both fly with western avionics and jet engines, so they aren’t really that far off from airbus and Boeing, and don’t really bring anything new to the table beyond more competition from China in putting everything together.
- elzbardico 4y agoProbably the Chinese will have to rely on some derivative of the Russian PD-14 engine. It is very probable that the chinese will lose access to western engines due to sanctions in the not so remote future, and their indigenous projects are still very far behind the state of art in jet engines.
- rippercushions 4y agoThey're building their own engine as well: https://en.wikipedia.org/wiki/ACAE_CJ-1000A https://en.wikipedia.org/wiki/ACAE_CJ-1000A I agree that the C919/929 pose no threat as is, but the Chinese are clearly playing the long game here and their massive domestic market coupled with government arm-twisting lets them scale: the C919 has already racked up over 1000 orders.
- seanmcdirmid 4y agoChina is still at least 20 years behind on jet turbines. They can get the power or economy (in terms of use time/overhaul), but not both at the same time. Jet turbines are hard to reverse engineer, and you really just have to put the time in on materials engineering.
- throwaway2037 4y agoThat said, watching the Comac C919 shitshow (14 years and still not in revenue service, and this is for a 737/A320 clone), I'm not holding my breath. This is true, but this is also a command economy. They can do that for a long time. At least 10 more years with gov't support. They'll get there eventually, plus the order book is essentially infinitely large because gov't will immediately force all domestic carriers to cancel foreign orders and only buy Comac C919. I am guessing it can handle 100% of internal flights (size / distance / etc.)
- DavidSJ 4y agoThe term you were looking for appears to be tacit collusion: https://en.wikipedia.org/wiki/Tacit_collusion https://en.wikipedia.org/wiki/Tacit_collusion Me: What's the official economics term for passive collusion, when players in a market avoid competing with each other without any explicit agreement not to? GPT-4: The official economics term for passive collusion, when players in a market avoid competing with each other without any explicit agreement not to, is "tacit collusion." Tacit collusion occurs when firms in an industry indirectly coordinate their actions, such as price setting or output levels, without explicit communication or agreements. This behavior can lead to higher prices and reduced competition, similar to the outcomes of explicit collusion or cartels, but it can be harder to detect and regulate.
- btilly 4y agoStarship launches tomorrow. There is a non-trivial chance that point to point suborbital flights totally disrupt the airline industry. Hong Kong to Los Angeles in 30 minutes for the price of a first class ticket is pretty hard to argue with.
- klipt 4y agoSurely the fuel costs massively more?
- btilly 4y agoThe cost per person is indeed much more. That's why he's talking about charging everyone the cost of a first class ticket rather than offering the usual economy etc prices.
- ikrenji 4y agomaybe not https://www.nextbigfuture.com/2022/02/spacex-reusable-rocket-costs-versus-airplanes.html#:~:text=NASA%20pay%20%24160%20per%20tonne,is%20%24240%2C000%20for%20full%20fueling https://www.nextbigfuture.com/2022/02/spacex-reusable-rocket....
- kylehotchkiss 4y agoGiven the similarity of the launch and flight stages to other scary things militaries look out for (icbms), I can't see how point to point rocket flights become a geopolitical reality. Airplanes can barely fly a straight line through Europe or Asia as it is. Point to point is only really a reality over North America, oceans, and Australia.
- btilly 4y agoAs long as the countries at the endpoints agree to the flight, it is hard for others to stop suborbital flights. Commercial airlines have to deal with going over countries that have air forces which can intercept them. Intercepting satellites is quite a bit harder. And attempting to gets everyone mad at you because of how much garbage it creates. In fact people are STILL unhappy with China because of the fallout from their attempt to TEST their capacity to do that in 2007!