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So expensive is the creation of an all-new plane that Boeing is looking for partners to help do the work and share the cost. In no other industry are there such large international combines—or so much high-level politicking. When he visited Jimmy Carter last June, British Prime Minister James Callaghan discussed an Anglo-American aviation linkup. British Aerospace, a nationalized collection of airframe and weapon makers, is being courted by the European Airbus consortium and Boeing. As a start, Boeing wants British Aerospace to make the wings for its planned narrow-bodied, 150-passenger 757.
A British connection would probably make Boeing's new-generation aircraft easier to sell in the Common Market. European governments sometimes have forced their airlines to buy their own country's planes even though they were inferior to U.S. craft. France and Britain have been the worst offenders, saddling Air France and British Airways with money losers from the Caravelle to the Concorde. The European carriers now claim that they are free to pick the best jet. The problem is that the Boeing 767 and Airbus 310 are so close in price and performance that the Europeans—and the dozens of Asian and African airlines associated with them in sales and maintenance setups—may decide to buy the local product.
So far, Boeing has bagged the biggest order: a $1.6 billion bundle from United. In the past, such a big deal by United would have sent American, TWA, Eastern and others rushing to place their own orders and thus secure favorable delivery positions. And they would have been crowing about how they were going to create the biggest, all-new, best-everything fleet in the world. So what happened this time? Nothing—so far. U.S. airline chiefs are playing a wait-and-see game. They claim that they will not order new aircraft simply as a reaction to this summer's sudden and unexpected surge. Explains Pan Am's Seawell: "If you buy new capacity for marginally priced traffic, you don't really get an adequate return on your investment."
No one anticipates that passenger volume will continue to grow at the present annual rate of 23%. United's Ferris figures: "A new plateau of travel is now established. We won't see great leaps from that plateau, but growth will be off a higher base." In the future, passenger growth will be somewhere between 6%, which is the historic average, and 10%.
Even at that reduced rate, the surge would give quite a lift to the disparate businesses and entrepreneurs that benefit from travel, including skycaps, tour guides, restaurants, hotels, car rental companies and retail chains. Certainly fares will continue to decline, though the sharpest cuts will be on off-peak, midweek and overnight flights. On the thesis that you get what you pay for, the airlines probably will adopt three classes of service. There will be first class for expense-account executives and wealthy tourists, in some cases with stretch-out beds like Japan Air Lines has begun to offer for a $120 surcharge on its San Francisco-Tokyo flight. There will be second class, with hot meals and some elbow room. And there will be tightly packed sardine class—cold meals, close seating, cheap fares.