Adam Smith blog - Which way to fly
By Madsen on Transport
This week the giant A380 is rolled out, promising to take 550 passengers at a time, maybe more, on a double-decker ride which may or may not be equipped with cinemas, bars and shops. Boeing, by contrast, thinks more people will want less crowded flights direct to their destinations, and is banking on its smaller, lower cost, greener 7E7 Dreamliner. Meanwhile Fly First, a new UK airline, plans all-business class transatlantic flights, complete with Concorde-style service, albeit in the subsonic Boeing Business Jet or the Airbus 319.
There's much at stake, including more covert subsidy to Boeing and Airbus than is good for either European or US taxpayers. No-one knows whether Airbus will get it right, as Boeing famously did with its 747. The British and French governments got it wrong with Concorde when they thought that the future lay in faster, rather than cheaper, flight. It is a sign of the current uncertainty that Airbus is trying to raise cash to build the A350 as a spoiler to Boeing's 7E7.
It doesn't matter too much to customers, in that we get to choose which we prefer. Investors could lose a great deal of money if they back the wrong one, or make a great deal if they call public tastes correctly. It could even work out that the air market will fragment and grow sufficiently large to make all of them right. Enterprise is a great thing: you makes your choice and you puts up your money. It should be private investors taking those risks and putting up that money. Governments are not very good at it, and we all have to pay when they get it wrong, as they so often do. |
