In the last few weeks Covid19 has killed thousands of people and come close to breaking the global economy. In a world of just-in-time operations, where even the best airlines live on just a few weeks of cash, the world has come tumbling down.
Carsten Spohr, CEO of Lufthansa has said it best, “nothing is ever going to be the same”, not for Lufthansa Group, or aviation in general.
As Lufthansa faces the accelerated retirement of large uneconomical wide bodies, airlines globally, previously sucking up every aircraft they could get, were already falling out of love with the A380. Operating small fleets – and less than 20 is a small fleet, the giant aircraft has one operator that’s made it viable in Emirates. Singapore still sees a place for it, as does BA, but for different reasons mostly around their approach to accounting and ownership/write down costs. Everyone else is looking for a way out.
All too often in history great machines, be they aircraft, ships or cars, have reached a peak in design and refinement, even engineering excellence, only to find the market they were designed for had changed beyond recognition.
The all-gun super-dreadnought battleship reached its peak in the Japanese Yamato Class, just as aircraft carriers rendered them obsolete. The carrier in turn is facing potential obsolescence in the face of drones and hypersonic missiles.
Trans-Atlantic liners reached a new level of refinement in the original QE2 and the United States, just as the jet engine rendered sea crossings a waste of time.
The 1973 Arab-Israeli war and the oil price rises of the 1970’s destroyed Concorde’s order book, and supersonic travel was rendered to the level of an elite novelty, when it had been the future.
I have a feeling that the 777-9 is going to be the very same thing. The 777-8 is already as good as dead. The huge aircraft is arguably the pinnacle, the largest type of aircraft ever built.
Two massive engines so big an A320 fuselage will sit inside them with room to spare. Wings so long they have to fold 3m of the tips upward just to get it to fit in the largest aircraft bays available at an airport.
Arguably the most sophisticated wing system ever devised – micro adjustments working with complex electro-hydraulic systems, all operated by computers, totally beyond the pilots frame of reference. It actually cannot fly at all without its computers. The 777-9 easily matches the average A380 seating capacity and renders the double decker obsolete in economy terms. It’s no coincidence that so great are the pressures and the logic of inevitability, the A380 will have ceased production as the first 777-9 should be delivered.
And yet as it rises into the sky the world has never been so lacking in need of such a giant aircraft. Qantas have seen the future, long range direct flights will be a market, because there is a logic and again, an inevitability about them that’s long overdue. Our greatest human commodity – the one thing we all have but never know when it will run out, is time. Nobody travels for the sake of travelling – we fly to get where we want to be, without wasting our valuable time.
And the 777-9 can’t make the grade for Qantas, so they chose the soon to be only other large aircraft, the smaller A350-1000.
The aircraft that constantly impress with their range are the A359 and the 787-9. Both have demonstrated extreme long range flying in recent weeks. Air Tahiti Nui for example have been flying full aircraft directly from the South Pacific to Paris, France.
And it’s these aircraft that will dominate the big wide body market now. As the worlds demand for aircraft and flying shrinks back to levels of twenty years ago, as it returns to life, it will be on aircraft airlines can afford to fly, be sure of filling, and are economical. Most of all they’ve got to be a low risk. If you know you can fill that aircraft to 90% every flight every day, you’ll be one happy airline.
But if you look out the window and see a 450 seat 777-9 that cost you the best part of half a billion dollars and is running around 75-80% full, and can only operate on a small number of viable routes, well that’s not such a happy day. And you could only afford ten, and at best 8 are operating on any one day in the week?
The only airline that can make the A380 work is also the only airline that can make the 777-9 truly work for it. Even that is under threat from airlines who will copy and follow Qantas. Once the A350-1000ULR proves a viable non-stop option – and it will, because Qantas have already proven the 19 hour flights from Perth to London work with 787-9’s, the ability of Emirates to fully dominate the transfer market will dim.
Emirates real advantage is the unwillingness of European airlines especially to service airports in their own back yard. If you want to fly BA to Sydney from Manchester or Hamburg, it’s three flights and two stops, on Emirates it’s two flights and one stop. That won’t change. But flying from Heathrow on a non stop A35KULR? That’s down to one stop and two flights, with just a short domestic hop at the start. Levelled playing field. 777-9 cannot do that.
Like it or not the 777-9 is just another A380. It’s more economical overall in fuel burn true, but it’s still too big, lacks range and the order book is almost the same size. Those who ordered it are the very same airlines who bought A380’s. And note that once again, not one US airline has ordered one.
When you have tough choices to make, not a lot of cash and don’t want to borrow any more, or be beholden to paying leasing costs month in month out for ten or twelve years, the 777-9 is a big mouthful to swallow. You can’t have just one, most major routes need three aircraft to operate even one daily long haul flight. The new type requires trained crews, handlers, pilots, maintenance, and parts, all of which are expensive.
If you think an A380 is too much to keep going and use, then the 777-9 is just the latest version and future burden. If an A380 makes no sense then nor does the 777-9. This is a niche product, of limited utility in a rapidly changing and down-sized and down-sizing market.
If I was CEO of any airline other than BA and Emirates, I’d ditch the 777-9 order in a heartbeat, buy more 789’s and A359’s instead. They’re more flexible, more capable and cheaper to operate and you already know they work. Wonderful as the A380 and the 777-9 are in their own way, they are a toxic burden for anyone who doesn’t have a very specific type of airline model. Only BA and Emirates fit that bill, for very different reasons.
As an aviation enthusiast of course, who doesn’t want to see the 777-9 fly? As a business operator, analyst, extrapolator of trends, it’s now a white elephant and for most of those who ordered it, I’d say run for the hills and don’t look back.
What do you think? Leave a comment if you think differently!