Grantville Gazette, Volume XII Read online

So it turns out that the fixed costs are just as variable as all the others. All the way from landings costing several hundred or thousand dollars per landing, when you're running two or three planes a month through only a couple of airfields, to the airfield paying you to make a stop at their location. Which starts to look like a reasonable deal for them, if you can land a hundred other places and totally bypass them.

  So it's time for another WAG, but this one doesn't fit into your calculations very well in terms of ton miles. Costs per ton mile go up or down as a percentage of cost almost in the reverse. The more miles you cover, the less they cost per ton mile. For the Jupiter, I'm guessing an average cost of around $500.00 USE for landing with an average of one landing every 300 miles. Some places it's going to cost more, some places it's going to cost less, some places they're going to pay the airline to make a stop. For the Gustav, which needs a prepared landing field, figure around $1,000.00 per landing. And it needs to make five trips to deliver the same amount of cargo or passengers.

  Back to the Jupiter. $500.00 every 300 miles adds in another $1.67 per ton mile plus $13.35, for a grand total of $15.02 per ton mile. That's $2.48 less per ton mile than a mule train times 30,000 miles a year. If the airline charges the same amount as the mule train, it's only going to make about seventy-five grand a year. Less than the pilots are being paid.

  The Garden Path:

  Which is what I have been leading you down. In our time line, several of the air shippers of cargo and passengers went broke in the early years of commercial aviation and most of the rest were only saved by mail contracts that were, in effect, government subsidies. Not that they didn't carry the mail and carry it fast, but without the mail contracts, the fledging commercial air transport industry probably wouldn't have made it.

  The situation in the 1632 universe is not analogous to that of our history, not even close. What people in 1920s USA were willing to pay for transportation was defined by how much they would have to pay to get their stuff transported another way. The same is true in 1634, but their other options are a great deal more expensive, a lot slower and much more dangerous. So price, acceptable speed, and acceptable danger are all much looser constraints in 1634 than they were in 1920. No one in their right mind is going to expect to get themselves or their cargo three hundred miles in a single day for the same price that they would pay for a ten-day trip. There are real differences in what the market will bear.

  So, while in a pinch the airlines of the 1632 universe could compete with mule trains in terms of cost, they don't have to. The actual price for customers seeking to transport goods on an aircraft or for a passenger seeking to travel on an aircraft is going to be five to ten times that of travel by ground transport. And the airlines still won't have enough aircraft to carry all their customers.

  Also, aircraft are expensive pieces of equipment. They are going to be worked as hard as they safely can be. Four trips a week is still only twenty hours a week in the air, with forty man hours for maintenance. Which effectively cuts the amortized cost of the aircraft in half. And the crew cost as well, since the pilots are still getting the same hundred grand a year apiece but are now transporting passengers and cargo 60,000 miles a year. If necessary, the airline can hire a couple of ground-based mechanics to add another 80 man hours a week of maintenance for less than two more pilots would cost.

  In general, I have taken the worst possible scenarios from the point of view of the owners of an airline and still ended up with a marginally profitable business. If, for instance, I were to use $50.00 per ton mile—less than three times the cost of a mule train—the net profit on one Jupiter comes to over a million dollars a year. See the chart below.

  I stopped at a little over three times the cost of a mule train, and seventy thousand miles a year because the profits were getting obscene. At $60.00 a ton mile the cost of a two hundred-pound item or, say, a passenger is $1,800.00 for a one-way ticket which naturally seems exorbitant to us. But when you start comparing it to the cost of a carriage ride of like distance, plus the fact that the carriage is going to take you six days or so, during which time you're going to be beset by toll keepers and possibly other bandits—not to mention the weather and the level of comfort—plus the fact that the carriage is going to have to take a roundabout route avoiding things like mountains, and it's going to cost you over $500.00 anyway, that $1,800.00 starts looking pretty attractive.

  So in the 1632 universe there are millions of good reasons to build commercial aircraft. They come right after the dollar sign.

  Editor's Note:

  Statistics being statistics, numbers being numbers and people being people, there are, of course, dissenting opinions regarding the potential costs and profits for an airline in the 1632 universe. And, deadlines being deadlines, another article covering the dissenting opinions wasn't available for this issue. It's entirely possible, though, that one will appear in a future issue. Stay tuned . . .

  THE END

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