Meanwhile, it is Boeing 787 and Airbus A380 that have been stealing the show. Their distinctive designs were influenced by manufacturers' long-term view of the worldwide air transport market. Airbus envisioned a market where airlines would operate bigger planes between far-flung hubs and lighter planes between the hubs and feeder airports. Their archrival, Boeing, envisioned a market where airlines would prefer to operate simple and cost effective planes, which must also meet consumers' need for comfort and high frequency schedules.
The resulting products are totally different. Boeing's Dreamliner 787, is an elegant, midsized aircraft that's targeted for both medium and large-sized airports. Its selling points includes flier-friendly features such as speed, better humidity, and the ability to access many regional airports.
A380 is a humongous high-capacity plane that could win a place in the Guinness Book of Records. Most airports will have to undergo extensive renovations to accommodate this mammoth aircraft. The upgrades might include: extension of runways and loading docks, installation of heavier plane handling equipment, and the improvement of baggage and immigration services (airports will be handling 555-800 passengers on a full flight). That does not come cheap. South Africa's OR Tambo International Airport in Johannesburg paid R512 million (US 73m; appx Kshs. 5b) for A380 related expansion. Not many African airports can afford this project. But I am beginning to suspect that Nairobi's desire to accommodate A380 was behind the significant increase in the cost of renovating JKIA.
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What is on the ground to me shows a continued struggle for Boeing and Airbus and especially the later.
I am not saying that there will be a significant market share to be exploited but the hubs and spokes model in the Airline Industry might only work longer for Long-distance travel.
The real key for the BRIC zones, Russia and Africa will be new models of Airport operations;
The fast growing
Embrear Jets, a Brazilian company in collaboration with GE with a hand of other Air-Taxis manufacturers are poised to redefine Air travel;
KQ which of late has started to understand that this model of conncecting Air-taxis has underpinned its currrent success has started embracing the Embraer jets as a perfect match to its Africa inter-connection ‘Air Taxi’ industry.
These are Jets that require low capital in the Airport infrastructure development. A similar kind of scenario has seen Landline telephony fizzle out in most emerging economies and be replaced with the Mobile telephony which growth has surpassed the imaginations of many.
Looking at the success of Airlines like Raynair and Southwest Airlines that whose model was trying to avoid the major hubs/spokes and used middle-sized airports in the Europe and US domestic markets, attest to the power of these solutions. Although their Model was not completely away from the highly competitive hubs and spokes, it has seen these companies continue reporting profits when major Airlines have been filing for Chapter 11 in the US.
Models being developed by other companies such as Eclipse Aviation and Day Jet Aviation, even poise greater disruption of the once dominant monopolies.
The Algorithims and seat allocation models/platforms being developed by Day Jet might just confirm how in-efficient the Airline industry has been in the ability to allocate passengers randomly without stopping for hours in the old Hubs and Spokes models.
It's really the first business aviation aircraft that's ever been mass produced, where even the parts are really exchangeable between them.
Such that an increased efficiency of these jets , could see the beginning of the 'Mdel T' in the Airline industry , making possible daily flights say from Nyeri to Nairobi and Vice/versa a normal routine to many travellers.
Embaraer and other manufacturers might not capture the Global international Travel in the short-term , but strong profits and cash-flows emanating from their coming strong domestic positions in growing emerging markets are ultimate leverage points. Infact I see the intercontinental travel being dominated by these small jets, after when they will continue improving on these models to develop radically different modes of global Air trackers.
I hail Boeing introduction of Carbon fiber material to make lighter aircrafts which will be more fuel-efficient, but even another threat that is still unclear to these Aircraft builders is the return of the RAIL. Investors such as Warren Buffet and Bill Gates are busy buying Rail-lines. The introduction of the speedy Euro-zone High speed train is a sign of the things to come that actually beats the time one will be taking to cross from Germany to France. In an age of eco-services, where the balance sheet of Many Airline carriers and other transporters will be heavily loaded with Carbon taxes, Rail-lines might be the next answer. It will be probably easier and even cheaper for a Train to adopt Solar Technology, Run on bio-fuel hybrid engines or the coming hydrogen cells than the Air machines. Are these the thoughts of the ORACLE of Omaha?
SO in essence I see two major and very eminent threats to Boeing and Airbus;
Air-taxis – playing on less the current Airports transfers model of hubs and spokes system. Small Air-taxis builders will capitalize on this competency to connect emerging markets and build their competitive strengths from here.
The Eco-Age of Carbon Taxes – Which might make Trains more attractive pushing Investors money into developing more superior Rail networks.