2/15/2005

Is Bigger Better?

In the article Boeing Launches Long-Haul Passenger Jet, Boeing introduced its new plane. The 777-200LR "Worldliner" was produced to compete with the new British-made “Airbus” (The world’s largest commercial jet). Even though the 777 is capable of flying 9,420 nautical miles in one trip, and carry 101 metric tons, it takes a lot of gas to fuel these behemoths. I view these airplanes like the gas hungry SUV’s, starving an already gas dependent world.
Boeing stated the seat-mile costs of the 777 to be 15% to 18% lower than other models, but this is the optimal number of seat to gas per mile ratio. This sounds well and good, but just like the SUV’s, the plane will not always be full. For sometime the airlines have been in trouble, running empty flights and companies filing chapter 11. This is like a mom driving a Hummer; she hauls the kids once in a while, but the full use of the vehicle is rarely at maximum optimization. http://story.news.yahoo.com/newstmpl=story&cid=580&e=2&u=/nm/20050216/bs_nm/transport_boeing_dc

8 comments:

sandy said...
This comment has been removed by a blog administrator.
sandy said...
This comment has been removed by a blog administrator.
sandy said...

Personally I appreciate the innovation. The wasting of resources I don't know enough about to comment on. However, I do know whether a person drives a Hummer or a Honda Civic, the vehicle is rarely used to maximum optimization. How many times have you seen an fuel efficient vehicle with its seats full? I think airline companies need to be smarter in purchasing aircraft if so many are filing chapter 11 as a result of empty flights. Sounds like they need to do some market research.

Rex said...

In theory the reasoning behind this idea is sound. The more people they can get on the plane the cheaper the price per ticket. But like Ralph said, this is the optimal number. How many times will they be able to meet the optimal? In the long run this type of plane could be good for the airlines because they could reduce their fleet and flight number by placing more people on fewer planes.

Dr. Tufte said...

-1 for a poorly formatted link in Ralph's post.

There's a good philosophical question here for the ManEc student. Should businesses make the products that people want, or the ones that are better for society? If the answer is the former, then it is irrelevent how big or inefficient airliners or SUV's are - that is the buyer's problem.

Generally speaking, when you see a person or firm with excess capacity (like an empty plane or SUV), it is usually an indicator that there are big transaction costs in being left without excess capacity. For an airline, if their planes are always full on a route, they lose out on any high paying walk-up business. For a "mom with an SUV" the capacity to potentially carry around a bunch of kids, or stuff, is important.

Here's a thought: if the people who profess so much concern about the waste from people driving SUVs around pooled their money, they could subsidize the rental of SUVs. I'll bet there is a low enough rental price that would dissuade people from buying these. The fact that this sort of suggestion isn't even made in public discussion should tell you that waste may not be as big an issue here as controlling other people's choices.

Nick said...

I think that companies should make what the coustomer are demanding and there are those flights that are very hard to get a seat on. Some maybe these new 777 are just for those flights.

scott said...

The market for these bigger planes has already been created by Airbus. Boeing is trying to get a piece of that market. If airline industries think that they can fill them up, then they should invest in them. All airlines won't run out and replace their older models with this new one. Airlines has a wide variety of plane sizes, and they allocate them according to need. I think its great for them to have another option.

Ann said...

I think it is smart for airlines to buy a few big airplanes. There are flights that people demand more, and the airlines can use the big planes for those flights. If the airlines are smart they will try to maximize the use of each of their planes, by using them for appropriate flights.