At the risk of sounding macabre, the coverage of the Airbus A380 launch leaves me feeling queasy. Not being an engineer myself, I will let others expound on the safety and wisdom of flying this machine, but the gushing pronouncements surrounding it still seem frightfully similar to Ismay’s “even God Himself could not sink this ship” regarding the Titanic.
Personally, I would not be comfortable flying on the A380, given the outsize dimensions, and I am an adrenaline junkie. In-flight turbulence does not bother me, I have skydived multiple times, raced my motorcycle up to silly speeds, about the only lunatic activity I haven’t tried is B.A.S.E. jumping. But this airplane gives me the heebie-jeebies (technical term).
I hope it flies as well as it inspires hyperbolic copy.
Addendum: A thought that I just shared with Jonathan: Seeing as how the airplane has never actually flown in real life yet, I hope that the designers used computers with Name-Brand chipsets in them.
Who says government to industry subsidies aren’t effective? Airbus seems to be a case where they worked quite well.
Airbus claims to have 125 orders in place for this plane. They need to build 250 to break even on the investment, which they say will occur within three years.
Boeing has now been surpassed by Airbus as the worlds largest aircraft maker. Boeing has looked at building an aircraft this size but their market studies claim to show there is an insufficient market to support it. It’ll be interesting to see who was right.
It seems like the kind of “let’s put it all on red” gambit that only a publicly subsidized business would consider doing at this time. If it is a commercial failure, it will be the biggest one since Motorola’s Iridium. I read Boeing’s comment, where they claim that the commercial airline market is headed in the opposite direction, away from the hub-and-spoke, connecting-flight model, to more of a direct flight, point-to-point model. That seems to make sense, but time will tell. As a cargo plane, though it would seem to be the dominant player.
Boeing bet the house on each of its recent big airliners, but unlike Airbus they weren’t being subsidized by the taxpayers to do it.
As a cargo plane, though it would seem to be the dominant player.
Maybe even for human cargo.
Jon, I agree that the risk is being borne by European taxpayers. But so is the benefit. Boeing has been losing market share to Airbus since it’s inception.
But Boeing’s recent developments haven’t been such a departure from what was currently on the market as the A380 is. The single most radical thing about Boeing’s Dreamliner is it’s carbon-fiber fuselage tube, rather than an aluminum panel & rivet fabrication. Other than that, it’s a standard size commercial aircraft. More efficient no doubt, but not out of the mainstream.
Aren’t the Euros claiming that Boeing’s dominant position in the post-consolodation defense industry give them defacto Pentagon-funded subsidies?
I don’t know enough about Boeing’s business model to know how the defense and commercial sides interact, but it does seem to be a valid criticism of our opposition to Airbus subsidies.
I’ve read somewhere that the new Airbus is so big, it requires a major widening of runways at airports, as well as some terminals. Who’s going to finance that project? And where will the land come from? Even Heathrow Airport has run into some problems with NIMBY protests. Imagine LAX or JFK having to widen their runways….
Anybody heard of the Concorde ?
Think of this: The final assembly building can hold 12 soccer pitches. I will be the first one out to O’Hare to see one come in, (and buckle the runway), but again, I won’t fly in one myself.
John,
I am guessing that some of the same US municipal govts that currently buy votes by spending billions on airport expansions will be eager to spend even more money to accommodate bigger planes if such planes become common. What’s a few $B more in bonds nowadays?
I admit to being a little leery of riding an aircraft whose primary design criteria seems to have been national prestige. On the other hand, Airbus to date has had a decent track record.
I can’t help but wonder if the A380 will suffer the same fate as the Concord. In 1967, a year before it actually flew, the Concord had 74 options to buy from 9 different major airliners. Buy the time it actually entered production it had only 9. In the end, only 20 were built.
The A380 seems predicated on “bigger is better” but diseconomies of scale often defeat the perceived benefits economies-of-scale. Asian airlines seem the most interested in large aircraft but they are also the ones most squeezed for airfield space.
I can’t help but wonder that the Boeing is right and that the true impetus for the large aircraft comes from a desire for European prestige and not sound market research.
I can’t imagine economy class on this thing being more comfortable. If anything, it’ll be more of a hassle since it takes longer to offload. And airlines being airlines, they’ll try to squeeze more seats into the extra space as opposed to increase space per seat. Being bigger, it’ll also take more time for you to get your food, harder to see the movie, more other passengers to put up with.
There’ll also be less window seats :(
I can see guys like Singapore buying this thing for the prestige of having one. They may even have the long haul traffic to sustain it. But passengers will still be packed like cows in cowcars. Moo.
Andy, I immediatly had the same strong reaction (“wouldn’t want to fly in the thing”)….can’t say why, really.
Maybe we suspect that the sheer size cuts down on the number of evasive and emergency manuevers available to the pilot.
Why should I care if the frivilous euros want to subsidize design of new planes? Works for me, and let American companies reap whatever dividens result from the euros R&D without any of that nasty up front cost… I mean, I think that government assistance of any industry (maybe with the exception of wartime) is absurd — but in this instance where the socialist investment is acorss the pond, I think what Richard Epstein often shouts in class, “What? Justice? What? It’s not my problem!”
Andy, what are the specks on this thing? How many seats? Wingspan?
Looking at the photo, you’d have to pay me to fly on it. At least until it has a minimum of 1 million flight hours without a crash.
Walker, Actually I agree with you and Jon on subsidizing business. I think it’s generally a bad idea for a whole host of reasons.
I’m simply pointing out that this seems to be a case where it’s worked out. I say that casually, since I don’t know the economic details.
I’m curious though. If for no other reason than an intellectual excercise, is there a situation where it actually makes sense to subsidize? Say, when company ‘B’ in the US has a 50 year headstart in technology and the lions share of the world market. Does it make macro-economic sense to funnel tax dollars into your own company to provide them the ability to compete? What are the trade offs in terms of money spent versus employment gained and foreign capital accumulated? What’s the payoff timeframe for taxpayer? It’s an interesting question, don’t you think?
we do have a bad habit of prosecuting our success stories, ie Microsoft. We should be happy that it’s an American company ruling the computer desktop world.
Tyouth,
My first thought exactly. How manuverable could this thing possibly be? I know that when compared to an existing 747, its pretty much all the same, but this thing is SO HUGE!!
Walker,
Some quick and dirty specs: 7 stories high at the tail (79 feet), over 800 passengers in max configuration, 262 foot wingspan, and 750,000 holes drilled in each wing during fabrication.
Sometimes, too big really is too big.
I seem to recall something to the effect that Airbus paid bribes under the table and Boeing wouldn’t and that is why they got a lot of their contracts. Does anyone else remember anything about this?
James Taranto at WSJ’s best of the web (www.opinionjournal.com) had a funny piece on the Airbus today, and Herr Schroeder’s reaction to it:
[All Hail the Mighty Weasel Bus
Agence France-Presse reports on the unveiling of Airbus’s new plane:
The huge A380 superjumbo, which can carry up to 840 people on its two full decks, supersedes the ageing 747 by US rival Boeing as the biggest civilian aircraft ever made. . . .
“Good old Europe has made this possible,” German Chancellor Gerhard Schroeder told a packed hall in Airbus’s headquarters in Toulouse, southwest France.
That was a barely-veiled barb recalling the US dismissal of France, Germany and other EU states in 2003 as “Old Europe” because of their opposition to the war on Iraq.
Airbus chief Noel Forgeard made similar hints in his presentation of the A380 during a colourful spectacle featuring computer graphics, atmospheric theme music, dancers and fountains.
“The European states–so easily accused of weakness–backed this fantastic challenge 35 years ago and have believed in the A380,” he said.
So these guys acting in concord took 35 years to come up with something bigger than a 747, and we’re supposed to be overawed?”]
Taranto, though sometimes more humorous than really insightful, delighted me with his final barb about the concord. Hehe. Silly Euros with their silly Pe-uma shoes and moddish androgeny.
Anyway, being serious here, Michael wrote:
“I’m curious though. If for no other reason than an intellectual excercise, is there a situation where it actually makes sense to subsidize? Say, when company ‘B’ in the US has a 50 year headstart in technology and the lions share of the world market. Does it make macro-economic sense to funnel tax dollars into your own company to provide them the ability to compete? What are the trade offs in terms of money spent versus employment gained and foreign capital accumulated? What’s the payoff timeframe for taxpayer? It’s an interesting question, don’t you think?”
The answer is Yes, for a developing country whose companies are trying to compete in a world economy wherein other companies have huge market shares and natural advantages, it may be useful for the country to subsidize. But only in rareified cases!!
Outside of working with developing markets (say India and computer engineering, or maybe even Airbus and the Euros when we are talking about building huge passenger planes– not an enormous market in terms of numbers of items produced) I can think of no legit. reason for government to handle raising money for a company. That is what stocks and bonds are for! Let the company convince the populace it is worth it to back that company.
On one hand, one might argue that the government, by tyrannically making the decision to invest in a company for the shareholders (ie taxpayers; ie slaves) cuts down on transactional costs.
That’s true in one sense: the company in question no longer is beholden to raising it’s shares’ market value, or to advertising and recruiting new investors. And it can take risks with impunity. (But shouldn’t the ideal company take risks as though it were dealing with its own money? Tax dollars aren’t play-money, as some democrats would have you believe…)
The transactional costs argument is total bullshit in another sense: the company better stay popular, or at least popular with those in government, and this costs money. (Bribes sure, but also it necessitates success, or at least the image of success.) Plus the cost, both in terms of worked government-man hours and in terms of time lost to inefficiency of government insight and involvement, is preposterous. And this argument doesn’t factor in that government organizations are inherently more corrupt (only because they have greater powers, of course) than private industries, nor does this argument address the moral/rights-based objection that, if the government makes tax payers pay for the damn thing, they often do so against the will of the taxed!!
If this moral argument seems silly in the Western world, perhaps we should look east. We have certainly seen what happens in countries where the government thinks it should acquire an interest in, or control of, all means of production. I believe that this sort of thing is the result of the Marxist rejection of the sanctity of private property.
I think the dream (both liberal and libertarian) is that one day all countries will be on near equal footing in terms of industrialization. At that point, the world can say whoever does better economically (with some consideration given to natural resources of course) does so because they have a better system to regulate (or not) their economy.
This thing has got me steamed. I think I’ll post on it over on my blog too. http://www.irritantnumber4.com
Wait until the airlines configure these bad boys for purgatory seating, about 1100 per flight. Imagine if you will the Hadj run (where it will get the most use). More than a thousand hadjis screaming, praying, trying to milk the goats they are carrying with them. The stench will be unimaginable. No stewardesses in miniskirts, security guards with AK-47s wearing wraparound shades and chewing toothpicks. Something Dante never imagined.
Think “Magic Christian”.
Robert,
Are you implying that Sir Branson will not be featuring double beds, conversation pits, and hot and cold running massages on the “70 Virgins Run To Mecca” special?
Walker Wells,
The real problem with government subsidies is that they very often suborn economic efficiency to entirely unrelated political needs. Sometimes such subornation might be unavoidable such as when a nation creates an internal economic asset to support their military just in case an external actors cuts of the external sources.
But in most cases subsidies just benefit the a minority at the expense of the majority. The entire country ends up poorer. A good example of this would be the proliferation in national airlines in the 1960′ and 70’s. Airlines became symbols of independence and prestige and for a time every little podunk 3rd world country was buying a 727 and starting their own national airline, even though economically, doing so made no sense. Worse still, with national prestige on the line, the governments felt compelled to support the airlines even as they hemorrhaged money. Most of these airlines survived until international creditor demanded they be shut down.
I think Airbus runs the same risk. It has become for Europeans a mark of prestige. It can’t be allowed to fail for political and emotional reasons. Politicians will pour money into the company for decades even if it otherwise would evaporate in the free market.
In the end, subsidies are just a form of nationalization except it is the capital that gets nationalized not the physical assets. The world wide history of nationalized industries has shown that nationalized companies begin to regard the parent government as their true customer and they stop seeking out advantage though economic efficiency and instead concentrate all their energies on shaking the political money tree.
It may take 10 to 20 years but I predict we will see the same fate befall Airbus.
The A380 project is partly a story of subsidies and partly of timing. The A380 was marketed to the airlines in the late 90s. Boeing’s traditional cutomer base, the US legacy carriers, would not and could not commit to an airliner that size — none of them have purchased A380s. All of them use B777s or A340s for most of their trans ocean flights. Without those commitments Boeing could not move forward.
The B777 for instance is a 300-500 passenger 2 engine plane. It is smaller and has a smaller crew than a A380. My guess is that it is a much better fit for Airline business models in the next 5-10 years than the A380 is.
Airbus was able to push forward with the 380 because they could count on the subsidies to float the project until the market caught up with the plane.
Boeing has to wait until the market is there. They will probably do another 777 version using 7E7 technology in a few years. If the A380 really starts to catch on, they will probably be able to catch up because the most likely have a few engineers sketching the 747-500 a full double deck jumbo jet, even today.
It looks like the Airbus isn’t just getting subsidies from the EU: they are also getting, ahem, marketing assistance.
Blackmailing Thailand into buying aircraft by threatening tariffs is bad regardless, but doing it now? Has the EU no shame? Alas, the article also states that the US imposes a 97% (!) tariff on Thai shrimp (although I couldn’t find anything that corroborated a number near that high). Sigh.