Sunday, July 08, 2007

Boeing, Airbus and African Airports

The global aviation industry is up for a shake up. This follows the introduction of new planes by both Boeing and Airbus, and the entry of BRICs (Brazil, Russia, India, and China) into the civilian aircraft manufacturing industry. Other factors include the transatlantic aviation agreement and the rising demand for aviation services in developing countries, especially in Africa and the Middle East.

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 prefer to 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 will have to 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 (they 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.

Bottom Line: I am beginning to suspect that Nairobi’s desire to accommodate A380 was behind the significant increase in the cost of renovating JKIA.


Ssembonge said...

Dream-liner will triumph over A380. It's touted as one of the most innovative aircraft. It will be able to land on many more airports than its contemporary.

Once again, it goes to show that the US will continue to lead because of its innovations.

PS. BRIC is now BRICK. Korea is the new entrant.

Kenyanomics said...

Ssembonge--Americans will surely have the last laugh. There are already 677 firm orders for Boeing 787 compared to 154 for Airbus A380. Both companies are, however, facing tough competition from smaller manufacturers (see kenyaimagine for more analysis).

Thanks for the BRICK note. I wish the last K was for Kenya.

Enjoy your vacation.

coldtusker said...

Korea is still a closed economy but they have started cleaning up their act... Of course, compare to Kenya, they are far, far ahead!!!

S.Korea does face a problem... the megalomaniac up north... who could unleash anything from a nuclear missile to bio-weapon...

coldtusker said...

The 787 is meant for point-to-point travel thus reducing the need for "hubs" & in the case of A-380 mega-hubs.

There is a place for A380s but will they be profitable i.e. recover development costs?

Note that unlike the A380 there is no tested 787... so beware... although many of the technologies used are, well, in use...

I think JKIA needs to focus on serving as "Africa's airport" rather than try to expand to accomodate the A380s.

In any case, its biggest customer (KQ) is in the Boeing camp. That is the customer they should support... they need JKIA to become FAA Cat 1 airport so they can start US/Canada flights.

Kenyanomics said...

Welcome back Coldi--->Updating JKIA for Cat 1. is welcome news to Kenya's aviation industry. Mombasa and Kisumu should follow suit. The latter can actually give Entebbe a run for its money call.