The significance of the A380
The unveiling of the Airbus A380 raises a couple of thoughts (not entirely new ones, and pointing in somewhat different directions). First, this is another example of the US loss of dominance in manufacturing. Boeing has ceded the jumbo jet market it created with the 747 to Airbus, betting everything on the proposition that airlines will want medium size planes like its forthcoming 7E7. Even if this turns out to be true (and limp early orders don’t support the idea) Airbus has an entrant in this market as well (the A350). Meanwhile, by abandoning the 717 (the old DC 9 inherited in the merger with MacDonnell Douglas), Boeing has abandoned the small jet market, the winner here being the Brazilian fimr Embraer. All of this parallels Detroit’s loss of dominance in the car market. And all this despite the big decline in the dollar-euro exchange rate. This suggests that winding down the US trade deficit is going to be a painful process.
The second point is the slowdown in progress in transport. In the 25 years from the end World War II to 1970, passenger air travel went from essentially nothing to the 747 jumbo jet launched by Boeing in 1967. Move ahead another 35 years, and we still rely on the jumbo jet. With the A380, we are looking at what will probably be the state of the art for the next few decades, and it’s … a jumbo jet, only 50 per cent bigger. Of course, there have been improvements in every part of the plane, from composite materials to more efficient engines, but it’s still, in essence, a bigger 747. The same is true, in spades, for cars. For all practical purposes, it looks as though we reached our collective speed limit 40 years ago.
So, maybe it doesn’t matter that the US is losing the markets for cars and planes. With firms like Intel and Microsoft it dominates the moneymaking end of the most innovative part of the economy, and with Apple, it provides most of the creativity. On the other hand, you need a lot of iMacs to buy an A380.
fn1. In fact, we’ve slowed down in the interim, with the introduction, commercial failure and ultimate withdrawal of the Concorde.