Big Plane vs Little Plane (The Economics of Long-Haul Flights)


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.

100 comments on “Big Plane vs Little Plane (The Economics of Long-Haul Flights)”

  1. Ruslan Bes says:

    3:06 Wow, never expected to see Aeroswit-operated plane in a video 🙂

  2. International Pilots says:

    ✈️

  3. me ow says:

    Lol can't wait for the 737 MAX! And also Airbus is stopping a380 production, and 787's are built in not so safe factories

  4. Michelangelo Buonarroti says:

    Yikes this is outdated

  5. scose says:

    Very informative and interesting!!

  6. 99pizza99 says:

    737 max?? Sad

  7. 99pizza99 says:

    Too much ads at end of the video, blah blah

  8. ROMER1 says:

    Too bad that Americans fail to pronounce properly the word "route"….a "rout". pronounced "rowt" is a serious military defeat…the word "route" is pronounced "root"… is a way of getting somewhere. It is important not to confuse the two words by pronouncing them differently.
    "Route" is of French origin, and in French and English is pronounced "root".

  9. Peter Barrett says:

    7:25, not really that excited anymore…

  10. Buffalo Me says:

    Why not just drive to New York or take a flight to Boston?

  11. Amateur Asian says:

    This video didnt age well

  12. Kittytube Vlogs says:

    Don’t forget San Fransisco to Melbourne

  13. Danplaz X says:

    If they crashed it would be

    Airbus a380 will cut it in half with its 80 m wing

  14. VscoBloxy says:

    The 737 max8 killed more than 400 people in lion air and Ethiopian airlines

  15. VscoBloxy says:

    All of the 737 max8 and max9 and max7 are banned

  16. VscoBloxy says:

    Except in China

  17. GalaxyGacha AndMore says:

    I would not say yay to the 737 Max 😬😬😬

  18. Mystr Mystic says:

    the 737 MAX had some MCAS problems

  19. John Boudreaux says:

    When this was uploaded
    I was born 9 years 364 days before this upload
    😐

  20. Rama Chetan says:

    737Max;)

  21. widgon says:

    United don’t fly the 757 to Belfast International Airport or George Best Belfast City Airport.

  22. Aidan Frison says:

    I came to the comments right after he mentioned the 737 MAX, XD hahahaha

  23. VideoRaw says:

    About the 737 Max…

  24. BOT Turtle says:

    now in 2019 we scream when we hear or see the 737 max

  25. BBoY drifter says:

    Picture of 737 at 7:37

  26. Dejaun Wallace says:

    I got a headache after this video🤕🤕

  27. Airforce 5 says:

    I think it the A380 and the 747 and the bigger iconic competitors, the A380 was built to rival the 747

  28. Iplays good says:

    I have flied with airbus 320 and 321

  29. Nice Try NSA says:

    7:27 That didn't age well…

  30. aopdemon says:

    Imagine crashing lol u would be falling for ages before u even die

  31. Andrew Soo says:

    787 ain't tiny

  32. Gianluca Tartaro says:

    3:47 There’s no way that model is accurate because a circle on a sphere wouldn’t look like intersections of circles on a plane lol. Geometry 👌

  33. its_kaven says:

    😬 737 Max isn’t so exiting in 2019 now is it

  34. MM Aviation says:

    3:45 no it doesn’t, the fly London-Perth with a 787

  35. Mr Cake games says:

    What is this question?! If you have been alive

  36. Sailen Katel says:

    This video didn't age well 7:27

  37. can Sancar says:

    İ am 11

  38. MJ Tv says:

    the a380 actually looks like a beluga whale

  39. Scrubscribe to PewDiePie says:

    >small plane
    >787

  40. Bŕøđý Cýř says:

    7:31 Is it really though. I dont see many of them working

  41. Pro & Contra Deutschland says:

    Very thoughtful comment! Well done! Just one mistake on the economics: A Boeing 747-8 and Airbus A380 are both more costefficient than any other plane (including the dreamliner),
    I F 9 0 % O F T H E S E A T S O R M O R E A R E B O O K E D !!!! That's really all. On routes where an airline has that potential these large 4-engine-jets still make sense. But with the new Boeing 777-9 and the Airbus A350-1000 even those days are gone soon.

  42. Samin Matin says:

    Hello, I am writing this from the time when 737 Max is released. warning don't use it

  43. Franklin&Tangelo345 says:

    7:27 if only he could have known.

  44. Truth Humanity says:

    Hey mate B737 Max is a flying coffin… not so great

  45. Matthew Sorg says:

    A380 > 787

  46. Holden Timulty says:

    In July 2019

    737-MAX No I don’t want that.

  47. Cool Transport says:

    the 737 max is already DEAD

  48. lonelyPorterCH says:

    I never was in a doubledecker jet…

    But I never flew outside of europe^^

  49. gabriel florentino says:

    Guess how the 747 sounds when it bownses, boeing… boeing… boeing…

  50. FlashOfLight says:

    Budget long haul doesn't work. An 8-hour flight is worth a lot less than five 1-hour flights (with 3 hours allowed for the four turnarounds at 45 minutes each). You have one opportunity to sell stuff like food, duty free, and lottery tickets on one flight. With five flights you have five opportunities to sell stuff.

  51. Larry McFly says:

    The A350 is a poggers plane too

  52. # DABING BOI says:

    737 max 8, yeah… Nope.

  53. # DABING BOI says:

    Great seeing all the comments being about the 737 max

  54. Stefan Kristersson says:

    This isn’t Boeing vs Airbus. Its Big vs small plane. Boeing has Big 777 and bigger 777x comming plus 747-8. Airbus has both a350 and small a330 neo.

  55. 50 Cent Kurwa says:

    The Airbus A380, but it's a budget airline and only economy class exists and it's on a high demand route

  56. Wincent Ivan says:

    How long does it take for us to go to work via plane like how bus is now

  57. MrMowky says:

    Yah but he didn't know that they'd do what they did. The 737 max is a great idea as long as you don't do unethical things to it.

  58. German Aviation says:

    The 737 MAX is the DC-10 in disguise. McDonnell Douglas‘s DC-10 failure plunged the company into economic failure, then Boeing came and bought the company. It seems like the MAX will likley (we don’t know yet since the plane is still grounded) suffer the same fate, though Boeing won’t go bankrupt due to it

  59. Ddog Darby says:

    aRE YoU suRe aBoUT ThaT?

  60. RandomGuineaPig Aviation says:

    2:04 it's actually 15 routes

  61. Gabe Fernandez says:

    7:27 hell no

  62. Sandesh Bidari says:

    The 737 Max part has not aged well. 😁😁

  63. 根岸由紀子 says:

    ANAをけ、ふくすぬむにひ!

  64. Muhammad Choukaier says:

    I am 10years old

  65. Oliver Eliasson says:

    A380 is a failure
    737 max is excellent
    2016

  66. Drew Sauer says:

    I think this is the first video I have ever seen where my home town (hartford) was mentioned

  67. Yippie says:

    9 year old will be sad

  68. deltagamer127 says:

    737 max is exiting…
    (Meanwhile…) 737 max is terrifying

  69. bboyjunyor says:

    "A380 was a failure"? You should read more reports on that and also take into account how much advertising this has meant for Airbus 🙂 Considering they have the airplane with the highest number of orders in history – A320 Neo, that sounds like a leader in their business.. and the A380 has made that happen!

  70. Tom Hicks says:

    Cardboard box

  71. hbihu says:

    I think it's unfair to say the boeing exclusively believes in a point to point model, while airbus wants hubs and trunk routes. The a330 is a similar size and range to the 787, and boeing is putting plenty of focus on the 777 range with the 777x, which is bigger than airbus's competing a350. Meanwhile the a321lr is an unusually long range and small plane, which should service small airports for transatlantic routes.

    Both companies want a piece of every pie.

  72. RONALDO GAMER says:

    0:32 there is a Lufthansa A380 in the back

  73. 747 Tctc says:

    Man of u looked back on your vid u would regret saying the 737 max was a good plane it's killed a lot of people

  74. 747 Tctc says:

    Md Dc 10: uhhhhhhhhuh I'm board. 737 Max: where am I Mc Dc 10:huh welcome to the club

  75. Sanchez King says:

    Personally I dont think point-to-point is the way to go. Sure, it does work NOW because airlines CAN make it profitable. But I think (not having done any extensive research) that it is only an option because the bulk of the demand is served by large aircrafts and hubs.

    Lets imagine a world without hubs and large (777 and up) aircrafts. In such a scenario almost every single airport on earth needs to connect to almost every other airport on earth, optionally via a stop en route for fuel. Demand would be so low on average that you would need extremely small airplanes to still have them filled, but even if that were technically possible it would be useless financially. But you still have those high-demand routes which you would need to serve with an obscene number of planes, as nobody makes high-capacity widebody's anymore. Obviously you cannot purchase and operate a fleet 5-6 times larger than the typical current one because probably nobody has got that much money. Next, the airlines are going to start segmenting their coverage into shorter distance and/or smaller demand routes and serving those with smaller aircrafts and "saving" the larger aircrafts for those high-demand routes as best as they can.
    And there you go, the grandfather of the hub model. No matter which way you cut, continuing on this train of thought will always lead to a hub model.

    Plus, while it may sound stupid, the worlds population, or at least that part of it that is relevant for airtravel, is getting older and girthier and has more purchasing power. That customer profile is not going to accept a narrowbody as long-haul transportation. Of course, a B737 or A320 is totally fine for about 3 hours, but anything more than 4 hours or so needs the smoothness of a larger plane and their larger space to fit appropriate seating. My rough estimate is that within the next 25-30 years, the average Economy seat will have to be sized similarly to a low-ish end Business seat of today in order to be deemed sufficient (plain english: so that fat people fit in them).

    Boeing is just being defensive with their statements of the hub model dying. Well, they have to be when they dont have a competing product to put up against the A380. But the simple truth is that while they have been saying one thing, they have been doing the other by developing the 777-X, a typical hub aircraft and (IMHO) a replacement for the 747 outside of "prestige" applications.

  76. Shadow Star says:

    787 dreamliner polskie linie lotnicze lot

  77. Johnny Zhu says:

    What's exciting is 321LR

  78. nick gabb says:

    Oh boy the 737 max is gonna be good! He stated not knowing what would await that plane in 2019

  79. anonomys pizza says:

    1:29 Hell yea Connecticut i live there the number of people leaving is high and the taxes are higher their bradly is an ok airport

  80. GamersSpace09 says:

    6:58 thinks of jetstar ad music

  81. LunnarisLP says:

    Something you forgot to mention is, that in the hub system airports need to be bigger, since the hub airport will obviously have the planes start and land to the close destinations, so in reality you don't even safe on gates at all, and only a little on pilots. Another point is, that planes 'decay' faster on the ground, compared to in the air and in general it's easier to build a plane that can fly a long time, compared to a plane who lands very very often. And fuel consumption is the highest when starting and gaining heigth, so by simply flying a route, no matter how long it is, you already consume a lot of fuel, therefore you might need more expensive prices.

  82. Bailey Michael Wilson says:

    What’s even better is Boeing 737 Max, ummm

  83. Richard Trester says:

    737 max😂 what a failure

  84. Navindu Silva says:

    Boeing floped

  85. 7upub says:

    this aged well

  86. Elijah Ford says:

    Planes I fly in are pretty small for the most part.

  87. Tirth Anand says:

    All airbus planes are better than boeing

  88. Ron Miel says:

    Boeing designed the 737 MAX to have only take off charges, but no landing charges.

  89. Krish Bb57 says:

    2016: Ah the 737 Max, solution to an old aircraft!!

    2019: all good to go, don’t mind the 2 VERY infamous crashes…

  90. fakshen1973 says:

    The concept of the 737 Max is great. The shortcuts Boeing employed to cut costs of development and production, aren't. AKA… how to turn a long haul flight into a very short one.

  91. jokubas vaitkevicius says:

    A350: am I a joke to you?

  92. Elprocesso says:

    Can u do a video on the 747?

  93. Kurt22 says:

    Her: Come over!
    737 max: I can’t, I’m grounded
    Her: my parents aren’t home
    737 max: You don’t understand, I’m literally grounded

  94. Slog says:

    To avoid hijack

    Put police officers or other trained personnel on board

    BIG BRAIN CMON

  95. Carbon Steele says:

    Oh man is he gonna be disappointed by the 737max

  96. Luke Carlin says:

    I always compare the a380 and the 747 idk y

  97. FloridaSpotter says:

    Uuugggghhhh, every time he mentions the max in a positive way makes me cringe

  98. Timewind dniwemiT says:

    Like to see Polish Airlines Dreamlimer in first minute

  99. YK 600 Aaron says:

    The 737 MAX doesn’t look suitable, perhaps it’s just me but, the engines look too high, like above the wing, they would of had to put some system on it to stop it nose diving, my prediction but that maybe that’s not true? Pffft don’t know, don’t care…love your work

  100. YK 600 Aaron says:

    Oh, there was problems? Wait what was the problem

Leave a Reply

Your email address will not be published. Required fields are marked *