Saturday, December 01, 2007

Airplanes and Real Estate

James Hamilton's analysis of the surprisingly strong 3rd quarter GDP number is here:

Jim's description is, as usual, clear and insightful. One striking point: while residential construction declines subtracted about one percentage point from GDP, around 40 percent of that was offset by exports from just one sector, civilian aircraft and engines. Because Boeing is the only civilian commercial (as opposed to private) aircraft company remaining in the United States, this means it has taken on a remarkable share of the burden of keeping the country out of recession.

So here is a fanciful question: how much do consumer preferences about aircraft shape airline decisions about what they purchase? The nicest airplane I have ever flown on is the Airbus 340-500 (it is the one that can fly from Newark to Singapore), and I would much rather fly on an Airbus 319-320 than a Boeing 737. Pilots have also told me that Airbuses can land in conditions of extremely low visibility (perhaps Boeings can as well, I don't know).

I am guessing that passenger comfort pales in comparison to operating and acquisition costs, and Boeing may have the edge there (I know the 787 is supposed to be very economical). Perhaps I am also unusual in my preference for Airbuses...

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