Ready or Not, Here Comes Jumbo
THE high white contrails of cruising jets are bright symbols of the promise and pleasures of air travel. When the big ships descend into sight and sound, their aspect alters. Their great engines foul the air with noise and noxious fumes; their proliferating numbers crowd the airways with dangerous traffic jams. Each new plane seems to bring more problems than the last. But the newest and largest product of this technological age is built to a different pattern. The Boeing 747, first of the generation of superjets that will dominate the skies in the 1970s, is quieter and cleaner than its predecessors. Its huge capacity will help airlines keep ahead of their expanding roster of passengers. The new planes should alleviate rather than increase the clutter aloft. In the process they will bring new comfort, convenience and economies to ever greater numbers of travelers.
Boeing's 355-ton superjet is 231 ft. 4 in. long--three-quarters the length of a football field, longer than the Wright brothers' first flight. Its 20-ft.-wide cabin is almost twice as broad as the largest passenger plane now in service; it can be fitted with up to 490 seats. More like a small cruise ship than any familiar aircraft, the big plane brings to mind Comedienne Bea Lillie's comment on the Queen Elizabeth: "When does this place get to England?"
If all goes well, the 747 will get to England next week, when Pan American World Airways has scheduled the initial flight of paying passengers from
New York to London. By the end of June, at least 30 superjets should be regularly crossing the Atlantic, the Pacific and the continental U.S. With their remarkable efficiency, they will help hold fares down at a time when everything else is going up.
Risking the Future
For all such benefits, the superjets will create some giant problems all their own. Airport managers nervously await the great clots of passengers that will be disgorged from a single flight. Practically no terminal is prepared. In the first months of 747 service, baggage handling and ground transportation--already overstrained--may be utterly swamped.
Airline managers are equally concerned. The 747 is so costly that its advent has plunged the industry deeply into debt. When one line buys a new generation of aircraft, all feel the urge to follow. At a time when profits are down, credit is expensive and other costs are climbing, the airlines feel that they have no choice but to order the 747s. So far, 28 of them in the U.S. and abroad have ordered 186 of the superjets at around $23 million each. That amounts to a capital outlay of $4.3 billion.*
The initial cost is only the beginning of a new round of expensive investments that the superjets make necessary. Airlines must spend another $2 billion for new facilities and equipment in the next four years, including 54-ton tractors to tow the big planes and new boarding ramps to lift passengers to doors that are 17 ft. off the ground.
The airline that will be first with the most 747s, and thus must cope with every one of the bumps in what airmen call a new plane's "learning curve," is Pan American. As if that were not enough, the company is already experiencing more than its share of turbulence. Last year it lost an estimated $23 million, $7 million in the month of November alone. It is getting much tougher competition from archrival Trans World Airlines on the North Atlantic route, and it faces a flock of new competitors on transpacific routes that it once all but monopolized. Now, with the 747, Pan Am is taking one of the larger risks in business history. It has committed $1 billion to buy 33 of the jumbo jets and create the facilities to handle them. The company is staking its corporate future on the big ship.
Expert's Assessment
The man who must make the wager pay off is Najeeb Elias Halaby, 54, Pan Am's new president and chief executive. Halaby has not yet had time to demonstrate that he can lead a losing airline back to solid profits, but he has sound credentials for that difficult job. Before he landed at Pan Am, he was in turn an outstanding pilot, a practicing lawyer, a corporate executive and an imaginative, activist chief of the Federal Aviation Administration. He also showed himself to be accomplished in personal public relations, seldom failing to remind audiences that he was President Kennedy's principal adviser in all aviation matters. Pilots who met him at the gossip sessions known as "hangar fly-ins" took to greeting him with the line: "Halaby thy name. Thy will be done, on earth and in the heavens."
One of Halaby's major assets is the fact that he probably knows more about the 747 than anyone outside of Boeing. As FAA administrator, he framed many of the Government rules that will regulate the plane's flights. Last year, when reports filtered through the industry that the big ship was in trouble, Halaby went to Seattle to take the 747 on a test flight. Settling into the left-hand command seat, he piloted the plane through its paces for two hours, then gave a singularly satisfied description of its virtues.
Confidence Building
"You keep thinking that you have 170,000 Ibs. of thrust in four little levers," he said. "You've got your hands on a hurricane on the ground. You have to be careful, because the blast could blow in a hangar door. Another thing: you've got 355 tons of momentum when you're taxiing that machine, and you don't go charging around. So you have got to plan ahead while taxiing. But once it's airborne, it's absolutely superb." Halaby took the 747 through high-altitude stalls and a series of landings and takeoffs. "You become integrated with the ship. That big fin and so much rudder contribute to stability and control." The plane was so bulky that he found that it seemed to dwarf the runway. Landing, he reported, was "like training for carrier landings." When he taxied back to the hangar, the feeling was "like docking a patrol boat--you've got to sail it in, and very carefully."
"It's a confidence-building machine, straightforward and honest," adds Halaby with unbridled enthusiasm. "Once passengers get aboard, they will have such a feeling of space, of strength, yes, even security, that any early anxiety will disappear. It is going to be, for older people, like going back into an ocean liner. For the youngster, it is going to be a different kind of life in the sky, where he can move around, go up and down the deck, feel less inhibited and constrained than he was in previous airplanes."
Stepping into the 747's passenger cabin is indeed like walking onto the passenger deck of a luxury cruise ship. The aisles are wide, the walls nearly straight, and the ceiling an unconfining 8 ft. high. Economy-class seats are 10% wider than on an ordinary jet. Coats and carry-on baggage are stowed in large overhead storage compartments. The cockpit is in the prominent bulge atop the plane's front end, along with a surprisingly spacious bar and lounge for first-class passengers, reached by a winding staircase. On the main deck below, the cabin extends out into the nose of the aircraft. In the economy section--which is separated by galleys into cabins so large that TWA recently held a board meeting aloft--passengers sit nine abreast in rows of two, three and four, divided by two wide aisles. The total effect is of roomy comfort. In flight, the 747's heft helps to smooth out some turbulence but, as in every other airplane, passengers in the rear are subject to the most movement in bumpy air.
To many people, the sheer size of a superjet raises the horrifying image of a supercrash. The thought of as many as 500 passengers and crew members going down at once seems too appalling to contemplate. Even so, actuaries in London, where most airline insurance is written, forecast three 747 crashes in the first 18 months of service. Each accident would cost the insurers up to $65 million. Balanced against their projection is an actuarial fact: though 98 of the 3,012 jets that have gone into service in the past dozen years have been lost in accidents, air travel--measured on an aircraft-mile basis--is five times safer than it was a decade ago.
Moreover, judged by its extensive new equipment, the 747 ought to be the safest aircraft ever built. The superjet has three inertial-navigation systems--the same sort that has guided Apollo flights--lest one, or even two, should fail. There are two auto pilots instead of one, a redundant supply of communications gear and an advanced radar with a 300-mile range. The 747 even has an automatic landing system designed to bring it safely to a runway in any weather without the touch of a pilot's hand.
Gaps on the Ground
As its biggest boosters are all too well aware, it is on the ground that 747 passengers will find what Halaby calls "a surface-transport gap, a hotel gap and a parking-lot gap." There is also that conspicuous airport gap. The 747 can land in the same length of runway as a 707, but its sheer size makes many other changes necessary. The only airport in the world that claims to be fully prepared for the 747 is Paris' Orly, which has already built one separate terminal and has another under way. By June, London's Heathrow will be the second adequately" equipped airport, with an expanded terminal and twice as many customs officials. Tokyo's Haneda airport, probably the world's most crowded terminal, has made preparations only on paper, and no one knows how its thoroughgoing customs officers are going to handle the crush. J.F.K. airport in New York will not be fully prepared until 1973.
Ground transportation of every variety is already overloaded. Authorities at Kennedy and other airports may eventually have to ban private cars altogether, allowing only buses and taxis to drive up to the terminals. New York's Metropolitan Transportation Authority plans a rail line on an unused right of way of the Long Island Rail Road between J.F.K. and Penn Station to whisk passengers to midtown Manhattan in 20 minutes. But the first trains probably will not be ready until 1974.
Winning by Losing
Congress is moving belatedly to supply funds to equip the nation's airways and airports for the superjet age, and most of the load will fall squarely on the air traveler. By spring Congress is likely to pass legislation to raise nearly $1.8 billion a year in new revenues. The ticket tax on domestic flights will rise from 5% to 8%, and there will be a new "head tax" of $3 on passengers flying overseas and a 2% tax on air freight. The money will be used to improve airways by adding new navigation and communications aids; airports will also be improved.
Perhaps the most surprising fact about the 747 is that the plane that promises to accomplish so much actually began its existence as a loser. In 1964, Defense Secretary Robert McNamara ordered a competition for a giant military transport and an advanced jet engine to power it. Lockheed and General Electric won the plane-and-engine competition, and their entry became the C-5A. The two losers, Boeing and Pratt & Whitney, were eager to find a market for their rejected designs. Boeing's chief, William Allen, decided to risk what turned out to be $1 billion in turning the military reject into a commercial success. Pan American's founder, Juan Trippe, who had ordered the first 707s a decade before, was still in command. He backed Allen by placing the first order for 25 of the 747s and taking an option for more.
To get production under way, Boeing had to construct one of the world's largest buildings--a plant covering 42.8 acres at Everett, Wash. Inside that vast space, the engineers encountered vast problems. The aircraft's weight grew by 15 tons from its projected 340 tons, and Pratt & Whitney had to rush development of a still more powerful engine. Because it burns its fuel more efficiently than other engines, the 747 is virtually free of the greasy smoke that trails ordinary jets on takeoff like ink from a frightened squid. Its engine is only half as loud as a 707's, though the difference will be less noticeable during takeoffs than landings. The new engine was not put into production as fast as the plane. Boeing last week had 15 expensive airframes sitting powerless outside its plant.
Once attached, the new engines brought another serious difficulty. As the turbines thrust forward in flight, the rear casing was bent one-twentieth of an inch out of shape, letting jet gases leak around the turbine. Result:
the engines lost some of their power and fuel consumption rose a costly 5%.
Pratt & Whitney finally found a solution by modifying the mounting, in effect adding an extra strut to carry the thrust. The new part will not be ready until the first 30 aircraft have been built.
Middle-Age Spread Early design difficulties are inherent in building any plane, and the 747's major troubles now seem to be over come. Two weeks ago, the FAA gave the plane an airworthiness certificate, the final approval needed to fly passengers. Recalling a recent conversation with Pan Am's best-known director, Charles Lindbergh, Halaby says: "Slim Lindbergh and I were sitting in the 747, and we decided to list the greatest civil air transports of all time. We picked the German JU-52, the DC-3, the DC-6, the 707 family of jets, the DC-8s --and this airplane, the 747."
That assessment had better be right, because Pan Am needs a major new success. Almost as soon as it started flying from Key West to Havana in 1927, Pan Am became the high and mighty among U.S. air carriers. Patrician Boss Juan Trippe maintained what was virtually his own state department to negotiate landing rights with foreign governments; at home, he had the political clout of a board of directors that has always included more former high Government and military officers than that of probably any other U.S. company. Among the current crew: Cyrus Vance, Alfred Gruenther, William Scranton,
Robert B. Anderson and Lindbergh.
In recent years, though, Pan Am has been overtaken by symptoms of middle-age spread. It faces a fleet of increasingly nimble U.S. and foreign competitors, and has suffered a series of reverses in Washington. Last summer Pan Am lost out to National Airlines on the award of a Miami-London route that it coveted, and President Nixon's award of Pacific routes allowed a host of competitors onto Pan Am's most profitable runs. Unlike TWA, Pan Am has no domestic routes to feed passengers onto its overseas flights. But that does not explain why its regular passengers last year deserted to TWA by the planeload and TWA for the first time carried more passengers across the Atlantic than Pan Am. Strike threats and a brief labor walkout last summer badly hurt Pan Am. As its popularity dwindled, TWA stewardesses somehow earned a reputation for giving more considerate service. TWA, in fact, manages to maintain such service while spending less per passenger mile than Pan Am.
While Halaby is very much the boss, he delegates authority among several close associates and has brought in a cost-conscious new vice president to operate the airline and make the day-to-day decisions. He is Richard Mitchell, former head of Pan Am's aerospace division at Cape Kennedy, where Pan Am fills a housekeeping and maintenance role. Together, Halaby and his top managers are trimming the line's payroll, laying off 1,730 of 45,500 employees, including 450 of its 3,590 pilots.
Halaby expects that Pan Am's lead with the 747 will help the line to turn a quick if temporary profit this year; 1971 will be a tough year because by then so many competitors will have their own fleets of superjets. To make more money, Halaby plans a wide-ranging diversification, particularly by expanding a subsidiary, Intercontinental Hotels. Pan Am already owns 45 hotels around the world, mostly in the luxury class, and is building 60 more, largely for the middle-income group that it hopes to attract with the 747. "We'll let our beds match our seats," says Halaby, who also plans to open low-price hostels. Says he: "We will provide a clean, wholesome austerity."
Squalls of Competition
Pan Am is not alone in feeling the profit crunch that, in the year ending last Sept. 30, held U.S. airlines' investment return to 3.7%, down from 9.5% in 1967. "Nobody can make money in the goddam airline business these days," says C. R. Smith, chairman of American Airlines until 1968. "The economics represents sheer hell. Practically everybody is in trouble."
The economics of aviation was little better eleven years ago, when the 707s first flew into service. Then, airline executives wondered how they could possibly fill the expensive new jets or pay for them in a time of economic slowdown, slackening passenger growth, and steeply diving profits. For several years, the planes flew with too many empty seats. Not until 1963-64 did they achieve their full potential. Then the jets became the airlines' biggest moneymakers ever; airmen called them "the flying cash registers." Now Halaby and other industry chiefs hope that history will repeat itself, and the chances are that it will. The CAB predicts that passenger travel on U.S. lines will more than double by 1980. The notable economies of the 747 should enable airlines to wring more profit out of that increase. The jumbo jet can be particularly productive as an all-cargo carrier, and could cut the cost of sending a ton of air freight from Dallas to Tokyo, for example, from $340 at present to $135.
The immediate outlook, however, is for a few years of costly overcapacity. Pan Am will have 362 seats to fill per 747 flight, and TWA has ordered 15 superjets with 342 seats each. Even Ireland's little Aer Lingus has asked for two 400-seat versions for jampacked all-economy flights between Dublin and New York, presumably relying on Irish loyalty and cut-price deals to fill them. Besides overcapacity, the 747 will bring higher operating costs. Pan Am's senior pilots will get paid $58,000 a year to fly it; airport authorities are asking for triple the landing fees that airlines pay for a 707.
Meanwhile, the industry continues to be troubled by fare-cutting competition from unscheduled airlines. So-called "supplemental" lines carry passengers at fares far below airline rates, passing on to their customers the economies that result from having every flight a 100%-full charter. During Halaby's term as FAA administrator, Washington set rigid new rules for the proliferating --and sometimes unreliable--supple-mentals. The Government weeded out the weaker ones, reducing their number to about a dozen. In the years since, they have burgeoned again, cutting deeply into the scheduled-airline business.
The scheduled lines' answer has been to offer "bulk" fares. The lines sell wholesale blocks of tickets to travel agents, who retail the seats for as little as $175 for a New York-London round trip (provided that the passenger also pays $100 in advance for meals and services at his destination). Another bargain is the new "group inclusive tour," which reflects the power of foreign government-owned airlines in the International Air Transport Association. International fares are now designed to encourage tourists to make fairly long visits to individual foreign countries in which they will presumably spend more money. As a result, tour fares, which include round-trip ticket, hotel room, some meals and theater tickets, can supply a remarkably inexpensive two-week stay in many a European city.
The 747 may allow even more attractive package deals. Regular fares, however, are unlikely to be cut; businessmen and others who stay abroad for fewer than 14 days will continue to pay relatively high prices for airline tickets. On domestic runs, U.S. airlines were granted two increases totaling more than 10% last year, and some lines are now rallying lobbyists to press for another boost, on the order of 3%.
Talking Merger
Executives of the supplemental lines argue that they serve the public interest by helping to reduce fares. They are calling for looser regulation, and are asking for State Department assistance in negotiating new landing rights abroad. In rebuttal, Halaby makes the point that scheduled airlines are already tightly regulated and overwhelmed by a surfeit of competition. As he puts it: "We should abandon the recent trend toward multiplication of carriers and the inevitable addition of deficits."
In an effort to reduce extreme competition and improve profits, many airlines are talking merger. The U.S. hardly seems in need of a score of trunk and regional airlines. American Airlines has discussed merger with Western; ailing Eastern, admits President Floyd Hall, is "studying every other U.S. carrier" as a possible merger partner. TWA has considered both National and Northeast. Pan Am executives have held informal talks with American, Eastern, Delta and Continental.
Pan Am could compete on better terms if it were allowed to feed into its overseas routes from inland gateways like St. Louis and Dallas, or permitted to acquire a medium-sized domestic line to give it a home base matching TWA's. The Justice Department may well fight tie-ups between any two of the very biggest lines, but there is little doubt that the Administration will permit some mergers. Most airline executives agree that there will be fewer carriers surviving by the end of the 1970s.
Debate on the SST
The financial benefits of togetherness will be all the more important because the lines will have to raise so many billions to pay for the 747 and other superjets in the future. Next summer, test pilots are scheduled to take up the first of the huge, three-engine "air buses" --McDonnell Douglas' DC-10 and Lockheed's 1011. Both are expected to enter service by 1972 and carry 250 to 350 passengers in comfort comparable to that of a 747. So far, 382 of the air buses have been ordered. Originally designed for shorter-range routes than the 747, the trijets are now being offered in stretched intercontinental versions as the two manufacturers compete for orders. In the continuing competition of bigness, Boeing has designed a 747 that can carry up to 750 passengers. Eventually, the jumbo jets are likely to reach capacities of 1,000 and 2,000.
Last month Congress voted $86 million--of an eventual $1 billion or more --to underwrite development of an aircraft of less obvious benefit: Boeing's supersonic transport, or SST. It is the U.S. answer to the British-French Concorde and Russia's TU-144. The SST will, as Halaby says, "turn the Atlantic into a river and the Pacific into a lake." But it will be much less economic than the 747, and passengers will have to pay premium fares.
The SST has divided the industry. Halaby, who as FAA administrator supervised the original competition for an SST design, says that he is an unabashed "supersonophile." He seems confident that the plane's problems can be solved. Pan Am Director Lindbergh has questioned the SST as a potential despoiler of the environment. Unless there is a breakthrough in design, the SST will spread a sonic boom beneath its path up to 50 miles wide. "Slim and I are in constructive debate on the SST," says Halaby. "I'm for it and he's not."
So far, the supersonophiles are winning, and the U.S. SST is likely to be in service by the late 1970s or early 1980s. The lines are expected to have a broad mix of planes and fares: premium prices on the SST, regular tariffs on jumbo jets, somewhat lower fares on older jets. By then, the problems of air travel will have multiplied, creating an even greater need for improved control of airspace, more airports, better ground transportation and bigger, more efficient terminals. Halaby worries because public investment in such facilities has always lagged five to ten years behind technological innovation. As the 747 takes to the air, its first and most important lesson is that the disparity must be corrected.
* Foreign contribution to the total will be a considerable asset for the U.S. balance of payments, which has been bolstered by exports of well over $6 billion of U.S. aircraft since World War II.
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