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The future of aviation supposedly began earlier today in Toulouse, France with the unveiling of the Airbus A380. While Singapore Airlines has revealed already what route it has in mind for the A380, the largest order for A380s has been from Emirates. Emirates does fly plenty of longhaul routes being based in Dubai, but will these routes beneift from increased capacity? Of course two of America's largest airlines think there is plenty of room for increased capacity. They happen to be UPS and Federal Express. If the A380 allows them to compete with the Postal Service (which has passenger airlines carry its mail) on price, there could be increased calls to raise postal rates or privatize the Postal Service entirely. Far and away, USPS accounts for the largest number of federal employees in the US, outstripping even the military.

Of course all this changes if an American carrier decides to use the A380 on domestic routes. Currently, very few domestic flights in the US use even a Boeing 747. But that may change. JetBlue began its road to profitability by charging $250 roundtrip to fly from New York City to Florida. Southwest offers plenty of cheap flights from all over the country to Las Vegas. However both carriers use single-aisle planes. But "legacy airlines" could start to use the A380's larger capacity to compete with cheaper fares on discount carriers. The 747 did trigger the need for deregulation in American aviation. The A380's promise of lower fares might convince legacy carriers to compete against each other more forcefully, making true market deregulation a reality.

posted by Thomas at 6:47 PM 0 comments