If you’ve been alive for the past ten years, you’ve surely heard of two planes: the Airbus
a380 and Boeing 787 Dreamliner.
These two planes have dominated news cycles worldwide because they’re both intensely
innovative—the a380 is the largest passenger plane to have ever existed, while the Dreamliner
is one of the most efficient and has an unrivaled focus on passenger comfort.
Concealed by all the fanfare, however, is a much deeper story on economics, innovation,
and how the airline industry works.
So, believe it or not, work on the Airbus a380 began back in 1988.
More people were flying than ever, and airports weren’t getting all that much bigger.
Airbus eyed the success of the Boeing 747 and needed a bigger aircraft to compete.
At first, Airbus considered making a super-wide jet by placing two a340 fuselages side-by-side,
but later opted for the design we see today—a fully double decker jet.
An a380 can hypothetically carry as many as 868 people in an all-economy configuration,
although the densest in practice is 615 seats—this is more than double that of the 787.
Airbus decided to focus on making a high-capacity aircraft because they believed in the hub-and-spoke
model of aviation.
With the hub-and-spoke model, passengers traveling from smaller airports—we’ll use Hartford,
Connecticut as our example—to a long-haul destination, such as London, England, will
need to connect though a hub.
In the case of Hartford, passengers would likely take a short flight to New York, Atlanta,
or Chicago to catch their transatlantic flight to London.
Obviously this is inefficient for the passenger.
On almost all routings between Hartford and London, passengers have to fly away from their
destination in order to catch their transatlantic flight.
However, for airlines, there’s conceivably an advantage.
Let’s say, just for the sake of explanation, that there are only six airports in the entire
United States—New York, Boston, DC, Los Angeles, San Francisco, and Seattle.
If an airline had one flight from every destination to every other destination, they would need
to run 16 routes.
If they just have one hub airport on each coast, we’ll say New York and LA, they just
need to have one route from each secondary airport to each hub, and one transcontinental
hub-to-hub route—five in total.
Obviously there will be quite high demand on the one transcontinental route, so airlines
can put a large aircraft, such as the a380, on that route to fulfill its demand.
Since it’s release, the a380 has often been placed on those long-haul, high demand routes—known
as trunk routes.
The second-busiest long-haul route in the world—Dubai to London—sees eight a380’s
a day, and that’s in addition to five smaller planes that fly that route.
The Dreamliner serves a very different purpose.
It’s a pretty modest size plane.
It can only hold around 220 passengers in a typical configuration.
Its composite construction makes it extremely light and fuel efficient, which helps reduce
operating costs.
In the late 1990’s, Boeing started to see slower sales on their large 747’s and 767’s,
and started to consider what to build next.
They initially looked at creating a plane called the Sonic Cruiser, which would have
had the same fuel efficiency as conventional aircraft, while flying 15% faster—just under
the sound barrier.
Airlines were initially enthused, however after the attacks on September 11th and the
rising cost of fuel, airlines were more interested in fuel-efficiency rather than speed.
The 787 delivered on that promise by reaching up to 102 mpg per seat (2.41 L/100 km) compared
to the a380’s paltry 74 mpg per seat (3.16 L/100 km.)
The Dreamliner also has an absolutely enormous range of up to 8,000 miles, and better yet,
it’s efficient at that range.
Boeing made such a relatively small aircraft because they believe in an entirely different
model of aviation—the point-to-point model.
In this model, in order to get passengers from Hartford to London, airlines just run
a direct flight between Hartford and London.
Obviously demand would be lower, but there still is demand.
In the past, to fly a route like this, an airline would have had to use an aircraft
with higher capacity than demand because smaller airplanes couldn’t fly such a distance non-stop.
Given that, airlines resorted to the hub-and-spoke model to concentrate all the demand on certain
routes where they could fill large, long-haul planes.
Now, with planes like the Dreamliner, airlines can fly long routes with less demand while
still being efficient.
The hub-and-spoke model was also popular in the past because airlines believed that it
was more cost-efficient to fly less flights at higher capacity.
It’s simple economics really.
Doing a lot of one thing together is cheaper that doing a lot of one thing separately—it’s
economies of scale.
Except that doesn’t really extend to the airline industry.
For a larger aircraft you need more ground-staff, more flight attendants, more check-in agents,
more fuel, more of pretty much everything.
The only cost that stays the same is pilots, and the only ones reduced are gates and take-off’s.
When you’re now doing more flights at the largest, most expensive airports, you end
up spending more money.
Airports like Hartford, Connecticut are cheap—labor is cheap, take off fees are cheap, everything
costs less than at JFK or Newark.
There are just fewer flights to compete with.
Not only that, but flying direct flights clearly costs a ton less because airlines only have
to pay the per flight costs that I talked about a lot in my “Why Flying is so Expensive”
video once, rather than twice.
United Airlines was a major innovator of the point-to-point model with their Newark hub.
Newark is an airport suited to serve smaller planes, so United took the opportunity to
open up direct flights to smaller destinations on the British Isles using narrow-body planes
stretched to the upper limits of their range.
United primary uses the Boeing 757 to reach smaller destinations like Shannon, Ireland;
Belfast, Northern Ireland; Glasgow and Edinburgh, Scotland; and Manchester, Newcastle, and Birmingham,
England.
Often the United Flight from Newark is the only transatlantic flight serving these airports.
United is able to operate these routes because the East Coast of the US and British Isles
are just close enough together to reach with a narrow-body plane.
With the 787, airlines are able to open even longer routes between smaller destinations.
Routes like these are called long-and-skinny—long distance, but skinny demand.
These includes routes like Tokyo to Seattle; London to Chennai, India; Wuhan, China to
San Francisco; Beijing to Boston; Nairobi, Kenya to Paris; Santiago, Chile to Madrid;
Warsaw, Poland to Beijing; Doha to Edinburgh, Scotland; the list goes on.
The efficiency of this plane also has allowed for an entirely new class of airline—budget
long-haul carriers.
The three main players in this category are JetStar airlines based in Australia, Scoot
airlines based in Singapore, and Norwegian airlines based in both Scandinavia and London.
Short-haul budget airlines have been possible for a while because of efficient short-range
airplanes, but this really is the first time there has been such an efficient long-haul
airplane, so these three airlines use the reduction in operating cost to offer significantly
lower ticket prices, while also using the principles of budget airlines that I outlined
in my “How Budget Airlines Work” video.
What’s even more exciting for us consumers is the upcoming Boeing 737 MAX.
This plane is a redeveloped version of the long-existing Boeing 737 featuring a larger
capacity, longer range, and higher fuel efficiency.
This means that we could conceivably see super low-demand routes like Manchester to Cleveland,
Lyon to New York, and Belfast to DC operated in the near future.
Norwegian airlines has already hinted at plans to use to the 737 MAX to open up an auxiliary
transatlantic hub in Edinburgh—a relatively small city.
So, the a380 was a failure.
Airbus hasn’t received a new order is years, and it recently announced that it would be
cutting back it’s production to only 12 a year.
Meanwhile the 787 has amassed almost 1,200 orders.
Point-to-point flying has always been better for the consumer, but with these recent innovations,
it’s now better for airlines too.
Given that, it’s clear that point-to-point flying is truly the future of aviation.
Alright, I have a lot of things to talk about so bear with me, but above all, I need to
thank my amazing sponsor, audible.com.
I personally use Audible all the time to listen to books on the go.
It’s a great way to learn when it’d normally be difficult like while driving, working out,
walking, and more.
Recently I listened to an absolutely amazing Sci-fi thriller called Dark Matter by Blake
Crouch.
It’s seriously one of the best I’ve ever listened to, and one of the major scientific
theories used to drive the plot is one I talked about in a previous video of mine.
Let me know if you figure out which one it is.
You can listen to Dark Matter or one of the other 250,000 titles for free when you sign
up for a 30 day free trial using the link www.Audible.com/Wendover and you’ll be supporting
the channel while you’re at it!
I recently started a Patreon where every dollar contributed goes directly into the channel,
and since the launch went so well, I’m going to be looking for an animator to hire to do
some work, so if you’d be interested in that follow the link on-screen or in the description
to get more details and see how you can apply.
If you’d like to contribute to my Patreon, you can do so by clicking here.
You can get early access to videos, behind the scenes updates, stickers, t-shirts, and
more.
Aside from that, be sure to check out my last video on how much it would cost to live on
the moon by clicking here, follow me on twitter @WendoverPro, check out the fan-moderated
subreddit here, and most of all, subscribe to this channel by clicking here.
Thank’s so much for watching, and I’ll see you in two weeks for another Wendover
Productions video.