Posts Tagged ‘prestige’

Skybus founder John Weikle’s plans to start an ultra-low-cost-no-frills airline based in Charleston, W.Va. — see here and here — are being dropped due to insufficient financing, persistently high fuel prices (the Energy Information Administration projects that $100+/barrel is here to stay in 2008), and the slowing economy. All investors are getting their money back.

Good thing the people of Charleston and West Virginia didn’t get bilked.

Skybus founder pulls plans for West Virginia airline [Today in the Sky]


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Benet Wilson writes that Chicago Rockford International Airport, an airport on Chicago’s far western fringe with limited commercial service, is going to partner with a charter airline (actually, a brand — Southern Skyways) to offer scheduled services to Denver and Detroit, the former to replace service United is withdrawing this summer. Rockford will control routes, destinations, and fares, and will eat the losses. As Benet points out, this is a bad idea.

Regular airlines are struggling, and low-performing routes are getting cut. If Rockford can’t supply enough traffic to Denver when the route is a regional jet and has interline connections, how will it generate sufficient traffic with a larger plane and no connecting opportunities? Well, it will operate less frequently — a few times a week. Says the airport’s director: “You’ll see as many flights as you can fill.” That’s just the problem — there will be so few flights that being unable to fill them will become a self-fulfilling prophecy.

Rockford says it’s doing this to prove what a good market it is to other airlines. Yes, it’s such a good market that United is leaving. The trouble with the fund-your-own-airline-service strategy is that Rockford is creating a different type of service than it’s trying to replace or recruit. It’s best to get connecting service to major hubs — the airport is already served to cheapo leisure markets by Allegiant. But the Southern Skyways service won’t resemble the connecting hub service the airport claims to need: the aircraft types and sizes, schedules, and traffic feeds will be completely different.

Rockford’s taken a bad idea too far. There are better ways of recruiting airline service.

Rockford Airport Gets into the Airline Business [Towers and Tarmacs]

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Yes, this sounds like a good idea: start a low-fare carrier in an era of $100+ oil. Compound that brilliance by making it point-to-point only, but based at an airport with less than 285,000 enplanements in 2006 and a metro area of 300,000 people. Throw in the fact that even scheduled charter services masquerading as airlines are having trouble in that market, and you have the recipe for a great airline!

. . . Well, OK. This might be a recipe for disaster, but at least you can get the city — Charleston, W.Va., in this case — to pony up $3 million to support the theoretical “hometown airline.” Behind this plan is the same guy who did this with Skybus in Columbus, Ohio, and he seems to have come up with a pretty good shtick.

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In an otherwise unremarkable editorial today, the Washington Post lets slip some factual and logical errors about airports.

The Post assails the Federal Transit Administration’s decision to put the kibosh on the long-planned extension of DC’s Metrorail system to Dulles International Airport. The only transit connections to DC’s major international airport are a bus line from just outside downtown and an express coach from a suburban Metro station. I use Metro almost every day, but while a connection to Dulles (and the fast-growing suburban areas of Reston and Tyson’s Corner) would be nice, I am of no opinion as to whether it’s worth the $5 billion-and-growing cost.

But I am happy to poke a finger in the Post‘s eye for its silly and fact-challenged opening paragraph, a histrionic howler that does no service to what follows:

The international airports in Chicago, London, Hong Kong, Tokyo and Sydney are served by passenger rail lines. Those in Kampala, Ulan Bator and Tegucigalpa are not. The Bush administration has now, for all intents and purposes, decided that Washington, D.C., belongs forever in the second category and not in the first.

First, some facts: Kampala has no international airport. Uganda’s main airport is located in Entebbe, twenty-plus miles from Kampala. Tegucigalpa has an international airport, but its short runway makes it of little use for international flights (the only two of long distance are to Houston and Miami). The main international airport of Honduras is in San Pedro Sula on the other side of the country. San Pedro Sula’s airport has more than ten times the passenger traffic of Tegucigalpa’s. So really now, Post, a little research might have helped your case.

But even so, does the lack of rapid rail transit really make Dulles comparable to Mongolia’s Genghis Khan International Airport? Not really. This is a classic example of an overgeneralization: if some world-class airports have rapid rail transit, then all should. It’s also a shameless ploy to make Washingtonians feel inferior to residents of other great cities. Here are some airports in the Post‘s first category: Friedrichshafen, Germany (pop. 60,000); Pisa, Italy; and Trondheim, Norway. These small airports have rapid rail transit links. And here are some world-class airports with no rapid rail transit links: Denver, Dubai, Kuala Lumpur, Las Vegas-McCarran, Melbourne, Miami, New York-LaGuardia, Prague, Sao Paulo-Guarulhos, and Toronto-Pearson.

I’m not trying to argue that Dulles should not have a rail link, but only that the Post‘s attempt to get support for one by an appeal to inferiority is specious. Make the argument for rail links based on evidence and reasoning. This kind of half-cocked appeal to prestige, when adopted by policymakers, usually results in bad policy.

Dulles Derailed [Washington Post]

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The Chinese were nestled all snug in their beds,
While visions of jumbo jets danced in their heads.

China, not stopping with its forthcoming small-to-medium-size civilian jetliner, is moving forward with its jumbo jet program. Its two state-run and owned aerospace companies, AVIC I and AVIC II, will be restructured. AVIC I (an acronym for China Aviation Industry Corporation) produces larger jets, both civilian and military, and AVIC II focuses on small aircraft and helicopters, both military and civilian. The word is that a new company will be launched by March 2008 to handle the jumbo jet program. The civilian jets will be a twin-aisle, twinjet, 200-300 seat CS2000 (pictured above, and in the vein of the Boeing 787 or Airbus A330) and a single-aisle, 150-200 seat CS2010 (along the lines of a Boeing 757). Eventually, a military-use jumbo jet will be offered (see the illustration below from Xinhua).

AVIC I and II will be reworked to produce parts and equipment for the jumbo jet program, in addition to continuing their own product lines. These developments raise the question of why China is going this direction. The global market for large aircraft is well-served by Boeing and Airbus, both of which produce excellent aircraft without being centrally managed by the state. Furthermore, both Airbus and Boeing compete in an open international market. I’ve written elsewhere that China may attempt to use its emerging network of proto-client states in Africa, Southeast Asia, and Latin America as a market for uncompetitive Chinese products.

More worrisome is China’s insistence on “homegrown” aircraft. Just as the major aircraft producers are developing sophisticated international supply chains and moving toward truly global jets (the B787 is 25 percent foreign-produced, and parts are manufactured all over the United States), China wants to move in the direction of nationalism. They’re not there yet (many components of the ARJ21 are U.S.-made), but China’s jumbo-jet drive illustrates a troubling trend.

China’s determination to produce a large jet (as if that is a sine qua non of superpower status), combined with the fact that the industrial drive is being managed from Beijing, means that China is ignoring the market for the jets which it will produce. Maybe the market will accommodate the Chinese product, but it might not. Famously, Boeing almost went bankrupt in the 1960s producing the eventually successful B747 for an untested widebody market. The state-owned company that will produce the CS2000, CS2010, and larger jets will probably not be exposed to such risk, and the absence of risk may severely distort the market for commercial aircraft.

China’s major aircraft companies to restructure as ‘jumbo’ jet tops agenda [ATW Daily News]
China to establish company to build large jet [Reuters]

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Flickr user geodesic. Used through a Creative Commons license.

The Airline Hub blog links to a St. Louis Post-Dispatch story wistful for transatlantic flights to Lambert-St. Louis International Airport. Now, if you click on the “prestige” tag below, you’ll see that I have had some scathing opinions about airports that go out of their way to secure transoceanic airline service that’s not supported by the market. I must be getting soft in 2008 (for auld lang syne, &c. . . . speaking of which, Happy New Year, dear readers!), because all I’m going to say to St. Louis is: Best wishes in your quest for Europe service. It’s not likely, given that the hometown hub airline can’t seem to make it work, but I wish you all the best of luck in your quest.

But I do need to clear the air on the reporter’s (and airport booster’s) assertions about the recently signed open skies agreement (see my take at the time here). He writes: “Now there’s hope that a new trans-Atlantic aviation treaty known as ‘Open Skies’ might eventually change [St. Louis’s dearth of Europe flights].” Why? “When the treaty takes effect in March, it’ll break up the rigid agreements that have long governed who can fly where across the Atlantic.”

Not quite. Yes, open skies ended the antiquarian Bermuda II agreement, but that governed only Heathrow Airport. But most European countries already had bilateral agreements with the United States to allow flights. Open skies simply regularizes the rules across Europe (and yes, cuts the nasty Gordian knot of Heathrow protectionism). So to say that it will break up “rigid agreements” is not really accurate.

“This is sparking lots of new routes overseas and hope at Lambert-St. Louis International Airport that one of them may end up here.” This is not really true. Several airlines’ plans to serve Heathrow have been announced, but there’s not much new service directly attributable to open skies. Much of the added service the reporter mentions could have been begun under previous rules.

“‘Open Skies will certainly be an opportunity for airports like Lambert,’ said Brian Kinsey, the airport’s business and marketing manager. ‘The playbooks have been rewritten, and I don’t think it will take as much to convince an air carrier to operate nonstop from St. Louis to Europe.'” I don’t know what playbook he’s reading, but open skies is simply not as revolutionary Kinsey thinks. The major change will allow European airlines to fly between the United States and countries beside their country of registration (that is, British Airways from New York to Rome or Air France from Washington to Dublin). And European airlines are already salivating over these routes–but the new routes that will get picked up in this way are all heavily traveled, O&D-intensive destinations, like New York, Chicago, and Orlando. Don’t expect St. Louis to be at the top of the list if it wasn’t there before open skies.

So, open skies will not, in and of itself, suddenly make medium-sized markets more desirable to transatlantic air carriers. It will foster consumer-friendly competition on routes between large U.S. and European markets.

Lambert may miss out [St. Louis Post-Dispatch via The Airline Hub]

Photo credit: Flickr user geodesic. Used through a Creative Commons license.

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My exchange with Daniel Hall earlier this week made it onto The Economist‘s Free Exchange, which was in turn picked up by Megan McArdle’s Asymmetrical Information.

The Economist writer brings in the intervention dimension:

[S]o politicised an industry as air travel need not fear dislocations in any case; governments would react incredibly quickly to pull back on any part of an agreed-upon energy bill that appeared to cause significant damage to airlines or aeroplane manufacturers. This, in fact, is one of the arguments made by carbon pricing sceptics–that governments will not allow the necessary pain to be felt.

McArdle follows this with

[G]overnments will not allow anything to harm the airline industry.

What I don’t quite understand is why this is so. Why is everyone obsessed with having protected domestic airlines, and indeed, airplane manufacturing capacity? . . . Now China, too, wants its own airframe manufacturer. And everyone wants to protect their national airlines.


Why is flying so emotional? And so heavily, heavily protected by the heavy hand of the state?

Two things to say about this: amen, but things may be looking up.

Aviation remains one of the most nationalized industries on the planet. British author Simon Calder once wrote, (more…)

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In 2004, US Airways downgraded its operations at Pittsburgh International Airport from hub to focus city status, taking with it half its flights and leaving swathes of terminal unused. Scott McCartney relates the story of what happened next: fares fell through the floor and low-cost carriers rushed in to take advantage of the situation. For a season, Pittsburgh mourned the loss of its hub and especially its prestigious transatlantic service to London and Frankfurt. But the Allegheny County Airport Authority takes a realistic view about luring back transatlantic service: “We have to depend on our market, and that may only be able to support international flights seven or eight months out of the year.”

Now, Things with Wings reports, US Airways is cutting back even more. Rather than respond with histrionics, the airport authority is welcoming the opportunity to get more flights from low-cost carriers. Moreover, according to a quotation over at Towers and Tarmacs, Pittsburgh is deploying incentives strategically: “We don’t rely just on the incentives. Any airline will tell you that if a market is not there, incentives will not work. The incentives are more a way to help increase brand awareness by telling passengers that there’s not just one carrier at Pittsburgh. At one point, 87% of our flights used to be with US Airways.”

The lesson Pittsburgh has taken to heart–that hub closure is not necessarily a long-term loss–is one for several other airports intent on remaining captive to high fares at their fortress hubs.

More US Airways Cuts Coming to Pittsburgh? [Things with Wings]
Pittsburgh Continues Efforts on Airline Diversity [Towers and Tarmacs]

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Evan’s Bookshelf: Dark Side of the Moon

For the past week I’ve been reading Dark Side of the Moon: The Magnificent Madness of the American Lunar Quest, an engaging revisionist history of the manned space program by Gerard J. DeGroot. DeGroot’s main argument is that while the development of space technology like satellites, planetary probes, and space telescopes has been useful and productive for humanity, the manned space program was a colossal waste of money driven by several factors: misinformed anticommunism (we were actually way ahead in the “space race,” even though the Soviets hit most of the “first” milestones), military-industrial interests (lots of jobs at McDonnell, Grumman, and Northrop emerged from the space race, not to mention the massive civilian growth of NASA), flights of fancy (the space-travel fantasies of boosters–no pun intended–like Wernher von Braun), and finally, a desire for prestige.

The moon shot was the great pinnacle of the prestige drive. DeGroot documents over and over how genuine scientific interests were neglected in the pursuit of the immensely complicated task of sending a man to the moon and bringing him back. “As Johnson had outlined in his memo, the main reason to go to the Moon, or indeed to do anything in space, was prestige,” DeGroot writes. “Americans feared that Soviet space exploits would damage the reputation of the United States and cause countries around the world to go communist.” He quotes numerous officials and journalists of the day making explicit the role of prestige in the manned space program.

He also quotes persuasive critics of this government-run prestige program (more…)

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Make no mistake: Salt Lake City has bought Paris service. Per my post a few days ago, state and local authorities have ponied up $1.9 million in incentives and subsidies, and Delta has rewarded their “investment” with nonstop service to Charles de Gaulle. “There is something different about a state and a city that has direct links across the Atlantic and across the Pacific,” said Utah governor Jon Huntsman. “It is a huge deal.” What keeps people thinking that their cities’ reputations and growth depend on the magic transoceanic flight? The price of prestige: $1.9 million.

It’s official: Delta gives Utah its first trans-Atlantic route [Today in the Sky]

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