An Airbus A380 hits 2 Light Poles at LAX while carrying Fewer Passengers than a Smaller Boeing 777 can Carry

Posted by PITHOCRATES - April 17th, 2014

Week in Review

The Boeing 747 ruled the long-haul routes for decades.  Because of its range.  And its size.  With it being able to carry so many passengers the cost per passenger fell.  Allowing it to offer ticket prices at prices people could afford while still making airlines a decent profit.  Airbus took on the Boeing 747.  And produced the mammoth A380.  A double-decker aircraft that can carry around 555 in three classes.  But this plane is big.  With a wingspan greater than the 747.  Not to mention special boarding requirements to load and unload its two decks.  But this extra large size couldn’t board at any run-of-the-mill 747 gate.  It needed a wider parking place.  Double-decker boarding gates.  As well as wider taxiways (see Korean Air A380 Hits 2 Light Poles At LA Airport by Tami Abdollah, AP, posted 4/17/2014 on Time).

A Korean Air A380 superjumbo jet hit two light poles while taxiing to its gate at a remote end of Los Angeles International Airport with hundreds of passengers aboard.

Airline spokeswoman Penny Pfaelzer says the flight arrived from Seoul Wednesday afternoon with 384 people aboard. She says an airport operations vehicle guided the jet onto a taxiway that wasn’t wide enough…

The A380 is the world’s largest commercial airliner, carrying passengers in a double-deck configuration. It has a wingspan of nearly 262 feet.

The search for Malaysian Airlines Flight 370 is important.  Because Malaysian Airlines Flight 370 was a Boeing 777.  One of the most popular long-range, wide-body aircraft flying today.  So if there is a mechanical defect every airline flying that plane would want to know.

Because of the cost of fuel airlines prefer 2-engine jets over 4-engine jets.  Which is why they like the 777 so much.  The 777-300ER can take 386 passengers in three classes 9,128 miles.  On only 2 engines.  Whereas the Airbus A380 can take 555 passengers in three classes 9,755 miles.  But on 4 engines.  Burning close to twice the fuel a 777 burns.  So the A380 can out fly the 777.  But at much higher fuel costs.  And with greater restrictions.  As the 777 can fit most any gate and taxiway at any airport.  Unlike the A380.  So is that extra passenger capacity worth it?  It is.  As long as you can fill the seats.  In this case, though, the A380 flew the approximately 6,000 miles from South Korea to Los Angeles with only 384 people aboard.  Something the Boeing 777-300ER could have done on half the engines.  And about half the fuel cost.

This is why the Boeing 777 is one of the most popular long-range, wide-body aircraft flying today.  Because it allows airlines to offer tickets at prices the people can afford while allowing the airlines a handsome profit.  And it has an incredible safety record.  Unless Malaysian Flight 370 changes that.  Which is why it is so important to find that plane and determine what happen.  As there are so many of these flying today.

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All Airbus A380s to be inspected for Cracks in Wing Brackets

Posted by PITHOCRATES - February 11th, 2012

Week in Review

All Airbus A380s to be inspected for cracks in wing brackets.  They’re not load-bearing but they’re important nonetheless.  These brackets attach the skin of the wing to the wing structural support.  A failure of one of these brackets is not likely to cause a wing to fall off.  But if the surface of the wing peels off it could cause some trouble from severe buffeting to a stall of the wing.  Apparently something Airbus does not believe is likely to happen.  It may be nothing as Airbus sent out a repair kit but didn’t ground the plane.  This may be just ‘erring on the side of caution’.  If one can really say that in aviation (see Safety check ordered for all Airbus A380 jets by The Associated Press posted 2/8/2012 on CBS News).

Europe’s air safety authority [EASA] ordered checks Wednesday on the entire global fleet of Airbus A380 superjumbo jets for cracks on parts inside the wings — extending a previous order for nearly a third of the planes to be inspected…

“These brackets are located on wing ribs which are not main load bearing structure, and, thus, the safe operation of the aircraft is not affected,” Airbus said in a statement. “Nearly 4,000 such brackets are used on the A380 to join the wing-skin to the ribs. Only a handful of brackets per aircraft have been found to have been affected.”

Still, EASA in its directive said that “this condition, if not detected and corrected, could potentially affect the structural integrity of the airplane.”

And here’s why Airbus is probably being honest and doing the right thing.  And probably would have even without the EASA stepping in.

Shares in Airbus parent company EADS were down 1.3 percent at euro26.61 ($35.00) in Wednesday afternoon trading.

If there is a problem and Airbus tries to hide it they have bigger problems on their hands.  For if a plane falls out of the sky because they tried to hide something they’ll be more than a 1.3% drop in the stock price.  For nothing will destroy the profitability of an aircraft manufacturer than an unsafe aircraft.  A state-owned company has no such pressure.  Because they don’t answer to stockholders.  Or have to make a profit.  Airbus does.  So hopefully this is a minor issue to resolve.  And the A380 will continue to fly safely.

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Airbus says Cracks found on A380 are not Serious

Posted by PITHOCRATES - January 21st, 2012

Week in Review

There are few things more dangerous to an airplane than cracks.  Whether in the fuselage.  Or on a wing.  Some horrific accidents were caused by small hairline stress fractures that grew under the stresses and loads of flying.  The greatest loss of life in a single aircraft accident was a 747 flying out of Haneda.  Japan Airlines Flight 123.

On a previous landing the pilot stuck the tail on the runway, requiring repairs on the rear pressure bulkhead.  But they did these repairs incorrectly.  They used a single row of rivets instead of a double row.  As the plane took off and landed the plane pressurized and depressurized putting great stress on that repaired bulkhead.  The metal fatigue produced hairline cracks.  And then on August 12, 1985 after the plane gained altitude and pressurized the rear pressure bulkhead failed and blew out causing an explosive decompression.  The force was so great it tore the tailfin from the plane and took out all four hydraulic control systems.  The plane was uncontrollable.  And crashed killing 520 of the 524 aboard.

So cracks on an airplane are very serious.  And now they found some cracks on the largest commercial jet in service today.  The Airbus A380 (see More cracks found in Airbus A380 wings by Tim Hepher posted 1/19/2012 on Reuters).

Airbus said the cracks were found on a number of “non-critical” brackets inside the wings of two aircraft during routine two-year inspections, after similar flaws showed up in five aircraft in early January.

It said the cracks did not prevent the A380 flying safely, but the Australian engineering body which handles routine servicing and engine checks on the superjumbos operated by Qantas Airways (QAN.AX) said Airbus’s reaction was concerning.

“They (Airbus) have described these as tiny cracks, but every crack starts off as a tiny crack and they can grow very quickly ,” said Stephen Purvinas, Federal Secretary of the Australian Licensed Aircraft Engineers Association.

“I would be worried that Airbus aren’t taking seriously the ever increasing number of cracks being found in the wings of their A380 aircraft .

Now nothing will hurt the sales of an airplane more than a reputation for not being safe.  So if the aircraft was unsafe the manufacturer would normally not try to hide that.  They would instead try to fix the problem as quickly as possible.  This is the miracle of capitalism.  If you produce an inferior product you won’t sell it.  If Boeing had a problem on their 747 they would do everything within their power to fix the problem before something bad could happen.  As would Airbus.  However, Airbus isn’t your run of the mill capitalistic manufacturer.  They are heavily subsidized by their governments.  In what is more state capitalism than free market capitalism.  So Airbus will do the right thing.  Unless pressured by their governments not to.  For political reasons.  Such as maintaining A380 sales to boost their collective ailing economies.

Let’s hope that the governments involved are letting Airbus manage this issue.  They will do the right thing.  For no one in the aircraft community wants any plane to be unsafe.

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The Space Shuttle versus the Airbus A380, an Economics Lesson

Posted by PITHOCRATES - June 29th, 2011

The Space Shuttle, a Public Sector Failure

People like to point to the Apollo Program as the ultimate example of the American ‘can do’ attitude.  Apollo put men on the moon and retuned them safely.  If we can do that we should be able to do anything.  Even cure the common cold.  If only we attacked our greatest problems today the same way we solved the moon problem.  With a great big government program.  That marshaled a vast network of private contractors.  Where cost was no object.

But that was the problem with Apollo.  Cost.  It cost in excess of $20 billion dollars in the late 1960s and early 1970s.  Today that would exceed $130 billion.  At the peak of the program spending consumed nearly 5% of all federal spending.  We’ve come close to shutting down government over lesser amounts in budget disputes.  The numbers are huge.  In comparison, the big three of federal outlays are Social Security, Medicare/Medicaid and Defense, each consuming about 20% of all federal spending.  Imagine the fireworks if any of these were reduced to 15% (a 25% reduction in spending) to pay for another Apollo Program.  Suffice it to say it’s not going to happen.

This is why we don’t have more ‘Apollo’ programs to solve our problems.  We simply can’t afford to.  And in case you hadn’t noticed, NASA discontinued the Apollo Program, cancelling three moon landings.  Because of costs.  These cost savings help fund Skylab and the next big project.  The Space Shuttle.  Which was going to fix the cost problem.  By paying for itself.  Based on the private sector model.  The reusable vehicle was going to shuttle payload to space for paying customers and earn a profit.  The program, then, would pay for itself once launched.  And consume no tax dollars.  That was the plan, at least. 

But the Space Shuttle had its problems.  For one it was very dangerous.  And it turns out that the first manned mission was likely to be a disaster (see Shuttle Debuted Amid Unknown Dangers by Irene Klotz posted 6/29/2011 on Discovery News).

What NASA didn’t know at the time was that there was only a 1-in-9 chance the astronauts would make it back alive. Managers put the odds of losing the shuttle and its crew at 1-in-100,000.

Safety upgrades, including those initiated after two fatal accidents, have made the shuttle 10 times safer than it was in its early years, but the odds of a catastrophic accident are still high — about 1 in 90.

That is the largely unspoken part about why NASA is retiring its shuttle fleet after a final cargo run to the space station next month.

The Space Shuttle was just too complex a machine to meet any of its original goals.  Two shuttles were lost.  And the Space Shuttle Program never turned a profit.  The program that was going to pay for itself along the private sector model didn’t.  It required tax dollars.  A lot of them.

… preparing the shuttles for flight is extremely labor-intensive, which drives its $4 billion-a-year operating expense.

This is why we shouldn’t ask for any more great big government programs.  Because they’re typically abject failures.  Few companies in the private sector can fail as grandly.  Missing their profitability goal in excess of $4 billion dollars?  Year after year?  Only government can do this.  For only in government can a failed business model survive.  Because only government can tax, borrow and print money.

The Airbus A380, a Private Sector Success Story

This doesn’t happen in the private sector.  Where such gross mismanagement would put companies out of business.  Because they can’t tax, borrow or print.  Well, they can borrow.  But not at the low rates the government can.  Such failure would force them into junk territory.  And with a proven track record of losing billions year after year, even that wouldn’t be an option.  No, the private sector has to do it the old fashioned way.  They have to earn it.  You don’t have to be perfect.  You just have to be profitable (see Damaged Qantas A380 Refurbishment Underway by Guy Norris posted 6/29/2011 on Aviation Week).

Work to return to service the Qantas Airbus A380 damaged in last November’s uncontained engine failure is underway in Singapore.

The aircraft, which was substantially damaged when the number two Rolls-Royce Trent 900 shed a turbine disc, is about to be placed on stress jacks for major repairs to the wing and fuselage. Work will likely include replacement or repairs to the number one engine nacelle adjacent to the number two engine which was destroyed. The number two engine and nacelle is also being replaced…

The start of repair work, covered under an Aus $135 million insurance claim, puts a final end to speculation that the A380 would be written off. Airbus meanwhile declines to comment on the implications for possible longer term redesign as a result of lessons learned from the incident.

The Airbus A380 is a complex machine.  It’s expensive to build.  And to operate.  But it packs in a lot of people.  So the airlines can recover their costs through normal passenger service.  By offering passengers tickets at affordable prices.  With a little left over.  So Airbus can afford to sell these expensive airplanes at affordable prices, covering their costs with a little left over.  So their suppliers can sell components at affordable prices, covering their costs with a little left over.  Companies make profits everywhere in the process.  To return to their investors.  To reinvest in their operations.  Or to cover large, unexpected cost hits.  Like Airbus and Rolls Royce did to keep Qantas a satisfied customer.

A380 product marketing director Richard Carcaillet says “the two preliminary reports so far have focused on the engine event. However if there are any lessons for systems and procedures then we will take action. But with the co-operation of Rolls-Royce we have put a line of defense into the Fadec (full authority digital engine control), so that in the event of detecting a similar condition it will shut down quickly,” he adds.

Rolls has “now inspected and modified the whole fleet,” says Carcallet. For the moment the fix is the revised Fadec software, though longer term design changes are also underway to the engine, he adds.

The updated software commands an engine shut down if it detects the threat of an intermediate high pressure turbine overspeed occurring. Rolls is meanwhile working on a longer-term redesign of the Trent 900 oil system, a fire in which triggered the event.

Rolls-Royce has also agreed to pay (US) $100.5 million compensation to Qantas.

This is how the private sector works.  The profit incentive makes everyone do what is necessary to please and retain customers.  And improve safety.  Because airplanes falling apart in flight do not encourage anyone to buy a ticket.

Bigger Programs only mean Bigger Failures

There’s a reason that the Shuttle Program is no more but there are A380s flying and making money.  The difference between the Shuttle Program and the A380 is that one was in the public sector and the other is in the private sector.  And guess which one is the success story?  The one in the private sector.  Of course.  This despite the A380 having far more competition in Boeing (in particular the Boeing 747-400 and 747-8) than the Space Shuttle ever had.

Moral of the story?  Keep government programs small.  Because bigger programs only mean bigger failures.  And more tax dollars pulled from the private sector to pay for these failures.

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What the Big Planes can teach us about Free Market Capitalism

Posted by PITHOCRATES - June 20th, 2011

The Big Planes are Nimble in the Sky but Clumsy and Dangerous on the Ground

In airplane parlance, the Boeing 747 is a big-ass plane.  And the Airbus A380 is an even bigger-ass plane.  Too big some say.  Like a lot of airport administrators.  With a full-length upper deck, boarding requires a two-story passenger boarding bridge (PBB).  Something no airport had prior to the A380.  The 747 has a smaller upper deck and passengers get there by a set of stairs inside the plane.  Which allows the 747 to fit any wide-body gate.  Not the case with the A380.

The A380 also has something the 747 doesn’t.  The world’s longest wingspan on a commercial passenger jet.  The A380 is big.  And heavy.  It takes for big turbofan jet engines and lots of wing area to heft that incredible bulk into the air.  This causes an even bigger problem than the 2-story PBB.  Because it’s not easy to widen taxiways or runways.  Or move buildings and other infrastructure out of the way.  Which makes them a hazard when taxiing.  Which is when a plane is most vulnerable.  And dangerous.  More accidents happen while taxiing than flying.  Even the greatest aviation disaster of all time occurred on the ground.  When a KLM 747 on its takeoff roll crashed into a taxiing Pan Am 747 at Tenerife.  Killing 583 passengers.

So airport people are nervous about planes driving around their airports.  Especially the big ones.  With long wingspans.  Because things like this can happen (see Not again! World’s biggest airliner loses wingtip after striking building at Paris Air Show – two months after doing the same thing in New York by Daily Mail Reporter posted 6/20/2011 on the Daily Mail).

An Airbus 380 lost its wingtip in a taxiing collision with a building, just two months after another superjumbo was grounded for striking a private jet in New York.

The A380 superjumbo was grounded after the smash at slow-speed at the Le Bourget airport, where the Paris Air Show is taking place.

The collision mirrored an incident at JFK airport earlier this year when a private jet was spun round after it was hit by the wing of an A380.

And someone caught that JFK accident and posted it to YouTube.

The big planes soar majestically through the skies.  But they’re clumsy as an ox on the ground.  And dangerous.  But they’re also something else.  Profitable.  Because the more people you can put into a plane the lower your per-passenger costs are and the greater your profits can be.

Big Dollars and thin Margins

‘Can’ being the operative word.  Because it takes a lot of money to make money in the airline business.  Because airplanes are very expensive.  And the business is ultra sensitive to oil prices and recessions (see Aircraft Makers Not Put Off by Excess Capacity by Daniel Solon posted 6/20/2011 on The New York Times).

The carriers are being squeezed between high oil prices — expected to average $110 per barrel this year, against $96 in 2010 — and an overly rapid expansion of capacity relative to demand. Global airline capacity this year is slated to rise by 5.8 percent, while demand is expected to expand by only 4.7 percent.

“But with a dismal 0.7 percent margin, there is little buffer left against further shocks,” I.A.T.A.’s director general, Giovanni Bisignani, said at the annual meeting, referring to the $4 billion profit on projected revenue of $598 billion.

Despite these paper-thin margins some still have confidence in the air transportation industry.  And they’re making big bets.  Some 33,500 in all.

Looking ahead over the next 20 years, Mr. [James] Albaugh [chief executive of Boeing’s commercial airplane unit] forecast global demand for 33,500 new commercial aircraft, worth nearly $4 trillion, of which $1.7 trillion worth would be in the 100- to 200-passenger 737/A320 size range.

That’s a lot of money.  $4 trillion dollars.  It’s bigger than the annual GDP of Germany, France and the UK.  And every other country except the U.S., Japan and China.  It’s more than the sum total of all economic activity in most countries.  But for Boeing it’s just a sales projection.  Incredible.  How do they do it?  How do they do business in a world with such large numbers and such large risks?  Do they get special help from the government?  No.  They have a simpler business model.  They try to deliver what their customers want better than their competitors do.

Airline mergers — like United with Continental, Delta with Northwest, Air France with KLM and British Airways with Iberia — mean that fewer decision makers will be controlling larger purchases as the combined fleets are renewed or expanded. This has major potential consequences for both the large manufacturers in cases where the existing fleets include both Boeing (Continental, British Airways) and Airbus (United, Northwest and Iberia) planes.

Near-term, this may offer Airbus an edge in orders for its A320 New Engine Option, or A320neo, which could cut average fuel consumption immediately while allowing airline managers more time to evaluate the eventual Boeing response. At mid-June, A320 new orders totaled 362, with Airbus’s sales and marketing chief John Leahy targeting 500 by the end of the air show.

On the sidelines of a recent meeting of the chief executives of Star Alliance airlines, Harry Hohmeister, chairman and director general of Swiss, said the flexibility of engine choice offered by Airbus, between Pratt & Whitney’s 1100B and CFM International’s Leap-X, made it easier for him to opt for the A320 neo.

It’s a very complex industry.  Each part of it has its own concerns.  But no one is managing the overall industry.  The market is.  Airlines want to buy planes that cut operating costs.  So they can sell tickets at prices passengers can afford.  Manufacturers want to sell planes.  So they try to make planes that cut operating costs.  Each does their own part.  In response to market forces.  This is Adam Smith‘s invisible hand.  Everybody working independently to maximize their own interests.  And this benefits everyone in the aggregate.  Because planes with low operating costs are brought to market so airlines can buy them in turn allowing them to sell tickets that passengers can afford.

Surely, you ask, wouldn’t it be more efficient if one entity did all this coordinating?  Wouldn’t it improve market efficiencies?  Reduce redundancies?  Make sure we use resources to maximize their value?  To have someone tell the manufactures what to build.  Someone to tell the airlines what to buy?  So the passengers get the lowest possible price?  Actually, it’s been tried. 

The Soviet Economy Collapsed because of too much Government

And it doesn’t work.  And never has worked.  Nor will it ever work.  Because one person or entity cannot be smarter than the millions of decision makers working to maximize their own interests.  Because a business prospers when it sells.  But to sell someone must buy.  Hence a business does best when it best pleases a buyer.  And that’s something a bureaucrat just can’t do.  For if he or she could, the Soviet Union would still be here.  And her GDP would be greater than the U.S., Japan, China, Germany, the U.K., France and every other nation on the planet. 

Well, the Soviet Union is no more.  Many probably don’t even remember the Cold War or the war between capitalism and communism.  (For those of you who don’t, capitalism won.)  Boris Yeltsin‘s right-hand man recounts the events of August 1991, the beginning of the end of the Soviet Union in Foreign Policy.  Key to her collapse was the state-managed economy (see Meltdown by Gennady Burbulis and Michele A. Berdy posted 6/20/2011 on Foreign Policy).

For months we had half-expected something like this. By the summer of 1991, the Soviet Union was falling apart at the seams. The economy was imploding, the deficit was ballooning, hard currency and gold reserves had been decimated, and Gorbachev’s stopgap reforms had only exacerbated the crisis…

…Yeltsin and the other democratic candidates had been elected to the Russian parliament in 1990 with the goal of securing more legally protected rights and freedoms, as well as a market economy, and Yeltsin had been elected president of Russia in June 1991 with almost 60 percent of the vote. But while we were secure in our popular mandate, we were utterly powerless to deal with the greatest threat to Russia: economic collapse. More than 93 percent of the economy, by our estimation, was controlled by the Soviet government. Yeltsin and those of us in his circle of closest associates soon came to believe that unless we were to content ourselves with being nothing more than a ceremonial body, we had to change the legal and economic bases of the union itself.

The government controlled 93% of the economy.  And it was falling apart at the seams.  Because bureaucrats are bad businessmen.  As demonstrated in the Soviet Union.  However, bureaucrats are good at something.  Being a bureaucrat.  And maintaining power.  The Soviet communists resisted the market reforms.  In fact, that August, the old hard-line communists effected a coup d’état.  To resist the Westernization of their country.  To hold on to their power.  At the expense of a suffering citizenry.  But Boris Yeltsin prevailed.  And the Soviet Union is no more.

Of course, it was not an easy road.  The rule of law did not quite catch up to the market reforms.  So there was a lot of corruption.  And crony capitalism.  Which is something that China saw.  And they are being very careful with their market reforms to avoid a similar fate.  But China, too, is rife with corruption and crony capitalism.  But these two nations are shaking off their communist lethargy and are becoming serious competitors in the global economy.  And China will soon be building commercial aircraft to compete against Boeing and Airbus.

Free Market Capitalism provides the Path to Success

Aircraft manufacturers are doing big and bold things.  Because they can.  By providing what the market wants.  It can do this despite the huge dollars involved.  And they don’t need any help from the government telling them what they need to build.  Or buy.

Government is full of bureaucrats who don’t know the first thing about business.  In fact, their involvement only hurts business.  Case in point:  the Soviet Union.  But that doesn’t stop bureaucrats from sticking their nose in where it doesn’t belong.  Especially in the aviation industry.  They see all that money.  And they want a piece of it to bail out their budget deficits.  The latest scheme by the Europeans is to tax carbon emissions in an Emissions Trading Scheme.  Not only are they going to tax themselves, but they’re going to tax any airline flying into the EU for their carbon emissions.  Some are concerned that this may result in a trade war.  Probably because it will.  But that’s government.  They want the money first.  Then they’ll consider the economic damage their policies cause.

One has to marvel when looking at a 747 or an A380.  Incredible examples of what private enterprise can do.  One can only imagine what other great things people could do if they didn’t have to spend so much time and money fighting their governments.  And we can only scratch our heads when we see emerging economies move towards capitalism (to emulate the success of others) while established economies with bloated bureaucracies move away from capitalism (to emulate the failures of others).

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