I have a prediction: Thirty years from now, I will be telling bedtime stories to my grandkids about the days of the massive four-engined airplanes.

“Back when I was young, airplanes were even bigger than they are today. They were so big, they needed four whole engines. And here’s the best part… they had two floors! There was a staircase to get from one floor to the other.”

“No way, Grandpa. Did you stop taking your meds again?”

“It’s true! These airplanes would fly across the world. They were so big, other airplanes had to move out of their way and stay out of their way for two whole minutes after they passed! They were called the King and Queen of the Skies.”

"Woah, Grandpa! King and Queen? They must have been beautiful.”

“Well… one was.”

They are the last of the four-engined behemoths. The king and queen of the skies. The A380 and 747. Fortunately, the bedtime story for which I am rehearsing remains three decades away. That leaves us several more decades to enjoy the very large jet.

COVID was not kind to the very large jet. Any 747-400s that were still flying passengers were mostly discarded, save for some leftovers at Lufthansa, Air China, and Rossiya Airlines. The newer A380 continues to fly at ten operators, notably led by Emirates, which operates nearly two-thirds of the remaining fleet.

The latest design, the 747-8i continues to fly with Air China, Korean Airlines, and Lufthansa, though only 38 of the total 155 747-8s built were delivered to passenger airlines.

It is the fate of these four-engined long-haulers that has been a topic of conversation this week. As previously mentioned, Emirates dominates that market. Emirates likes dominating that market. Emirates wants more big airplanes to keep dominating that market.

Despite new A350 and 777X orders this week, Emirates is asking for an even larger variant of the new 777 than is planned. The airline publicly pushed for a feasibility study for the 777-10, a yet-to-exist variant of the yet-to-enter-service 777X. You can read all of the inside baseball at my writing alma mater, The Air Current.

But one thing about the very large jet market is clear: there is no replacement. That means one thing for the King and Queen of the Skies - they will be around for passenger travel for years to come. Especially at Emirates.

For carrying boxes, though, it’s very likely my grandkids will still get the chance to appreciate the beautiful lines of the 747 a bit longer.

That will be a story for the great-grandkids.

Spirit and Frontier network overlap

An astute subscriber took a deeper look at the network overlap charts we built last spring, showing Spirit and Frontier network overlap. A few things have changed.

Firstly, Spirit has cut almost half its network.

Secondly, Frontier has actively gone after Spirit in several of the remaining markets.

Yet, as the subscriber pointed out very appropriately, when you consider total metropolitan overlap, it becomes greater. When combining the two network capacities, 40% overlap in competing markets.

Another way to view the overlap is to consider the least-affected airline. Whichever airline represents the least amount of overlap, most often Spirit, with its larger network and Latin American presence.

The regional jet risk paradox

Yesterday, we published a detailed analysis of regional jet risk.

This analysis, published alongside Falko, turns the idea of market concentration and operator risk on its head. What if metrics that apply to other parts of the industry don't apply here?

What if large regional jets are being overlooked by investors for the wrong reasons?

Consider this:

• Large RJs are remarketed 1/3 as often as narrowbodies.

• Only 10% of large RJs move to new operators between ages 8–12, compared to 27% of narrowbodies.

• Less than 0.2% of the large RJ fleet is at airlines with a Caa or lower rating, compared to 9% of the narrowbody fleet.

For investors avoiding the large RJ space based on liquidity concerns, significant value is being missed. You can read and download the full analysis here.

Research published this week

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