On 21-10-2011, in Managers' corner, by steve
It is not a secret that some people considered Boeing’s decision to forego the New Small Aircraft and follow Airbus’ lead in re-engining their existing product a poor one and something that will delay the appearance of a really novel aircraft by a decade if not more. I must confess that I am one of those who would have loved to see the two airframers rush to bring the single-aisle of the future to market.
Commenting on the same subject in a recent issue of Aviation Week, Richard Aboulafia , VP for analysis at the Teal Group, while approving the Boeing decision, divided the world in two groups of people. There are the Technologists and the Economists.
For Technologists, “aviation is a technology driven business, with new equipment stimulating demand and therefore creating its own market”. Economists on the other hand “view technology as a means to an end: profit”. He also points out that most airlines and aircraft companies are run by Economists.
Reading this very interesting article, I stopped to do some soul searching. Which camp did I really belong to?
Some years ago, still as an assistant director infrastructure at IATA, I was called to hold afternoon-length sessions for ATC supervisors at EUROCONTROL’s school in Luxemburg with the aim of outlining to them what the airline industry wanted from air traffic management in the future. I usually started out shocking them by the statement: airlines were just a business and air traffic management must behave in a way that facilitates that business. By proxy, ATC was just a part of a complicated business environment.
I have also often argued for having a business case for just about everything… New channel spacing? Business case. Air/ground digital link services? Business case. Mode S Enhanced Surveillance? No, I did not want that even if there was a business case (there never has been, not a credible one anyway).
Looking back now and thinking about the events of the last few years, I think I am probably more of a Technologist than an Economist in spite of the noise I made that might proclaim it otherwise.
True, some of the most successful airlines are being run as pure businesses… but would I want to work at such an airline? Would I even want to fly such an airline if I had a choice?
Then the infernal business cases! It is easy to make a business case for upgrading the business class section of your aircraft or the in-flight entertainment system. Just say the competition is doing it… On the other hand, try to get air/ground digital link on-board and you are likely to hit a wall (even if the competition is doing it…). That it will help reduce delays is not enough for the true Economists. They must have the results immediately (well, almost…) and if something is needed to be there now so that something else is enabled in the future with this being the benefit, forget it. Even a solid business case is no guarantee that there will be money for the implementation. First you need new seats in business class.
Airbus and Boeing will save big bucks by not building the aircraft of the future yet and perhaps it would indeed be too early in view of the readiness of the technologies you need for such a bird. The industry will get what it wants in the short term but it will miss out big in the medium to long term.
With the A320NEO and the 737MAX selling like hot cakes (the Economists are buying them in droves) who will want to spend money on a truly new single-aisle in the next 20, 30… 50 years????
Here is an example of what reluctance to spend to-day for long term benefits can do to your bottom line. When it was first realized in the 80’s that the VHF band allocated to aviation will soon be saturated if the 25 kHz channel spacing is maintained, the industry had a choice: invest money in accelerating research into a new, digital communications system for aviation, getting rid of the lack of frequencies once and for all, also laying the ground work for air/ground digital link or reduce the channel spacing to 8.33 kHz and continue with the analogue technology dating back to before WW II. 8.33 was of course cheaper in the short term but it would remove most of the motivation to work on the real solution, a new digital system. Technologists pushed for the new system but the economists won.
We are saddled with a legacy radio system bursting at the seams while the rest of the communications world rushed ahead. Who is doing any serious work on a new communications system for aviation? Perhaps a few brave technologists are dreaming a bit but that is about all.
The A320NEO and 737MAX are to the future aircraft what 8.33 has been for the new communications system. A big nail in its coffin…
The problem of course is that in these things it is so often one or the other, with little color in-between. In an ideal world Technologists and Economists should work together better and come with solutions that are less black and white also. Of course the Economists are not out to cripple technical progress but they tend to create kill-your-mother-to-make-a-dime contrivance. Of course this is a world wide problem crossing all industries not just aviation. Everyone takes economics to be the truth of the moment when in fact its just a tool… Unfortunately, more often than not a short sighted tool.
Hm… Technologist or Economist?