The response from Boeing to rival Airbus when they announced they were moving forward with the A 380 was to upgrade the 747 to an 800 series. As of this month there were options on only thirty-two of the passenger version but seventy-six for the freighter configuration, almost making it a loss making venture for Boeing. It is interesting to note that some freighter operators, led by Cargolux, are looking at ensuring any replacement aircraft are new rather than conversions. With possible cancelations on the passenger 747-800, it looks like the 747 will go the way of the MD 11. In the last five years of MD 11 production all aircraft delivered were freighters.

I started in the business about the same time as Pan Am started flying the 747 to New Zealand. I have always been in awe that such a huge machine could actually fly. It is sad that starting with the “new” JAL, a mega international carrier, that the 747 will slowly fade from the skies because most carriers will undoubtedly follow Air New Zealand’s choice of scrapping the redundant aircraft rather than find buyers. To think it was 747 which transformed the airline business to move passengers in “bulk” which in turn led to pricing that allowed working class families to enjoy overseas travel at Greyhound bus prices.

Now I know some people, like that quirky idiot who runs Air New Zealand, Fife “the knife” think it’s cool to risk their lives each day by biking to and from work, but Adolf accomplished this throughout his lifetime simply because he was literally too mean to buy a car! Ironically enough, it was the automobile that brought about his demise. A few weeks back, Volkswagen became the largest company in the world by market capitalization because part-owner Porsche played the “put and call” derivatives game in order to fully acquire Volkswagen. Merckle borrowed heavily to bet against Porsche and in the end had to deliver shares to them at the cost of $billions. The result was (his personal wealth was already heavily leveraged) this time the banks were no longer interested in lending another Euro without major collateral, which literally meant surrendering control of his empire.

This miser, who accumulated his wealth for no other reason than greed, couldn’t stand the thought that his $billions had overnight shrunk to $millions and more importantly someone else namely the Porsche and Pieche families had benefited from an action he undertook thinking it would grow his piggy bank by another $billion or so, not cost him virtually everything he had socked away over the past forty years. As Bruce McNall, that famous spendthrift fraudster who at his peak of fame owned the L.A. Kings hockey team, on replying to a question of why he was so generous (no-one then knew it was actually the banks’ money and not his), retorted, “You never see a Brinks van following a hearse to the graveyard, do you?” Mr Merckle, you are now dead and buried and mate your tombstone should read, “I went to my grave not knowing when enough was enough”. The only thing I can add is the way you died will ensure misery stays in your family for many years to come.

The merger of British and Qantas makes absolute sense. I would throw Air NZ into the mix too. It looks like BA’s takeover over Iberia maybe a done deal and I see nothing but blue sky should the Qantas-British merger go ahead as well. Sure there will be huge redundancies, particularly in management, but on the other hand maintenance for Qantas will be brought back to Australia, making it a far safer airline. There will be huge economies of scale by in-sourcing so many other parts of the operations that recently have been handed over to outside contractors. Cargo, for instance, is an area where the merging of the terminal operations would be hugely beneficial both cost and service-wise for the new entity.

Unfortunately, there are many regulatory obstacles to overcome and every little tin-pot airline and/or government will be objecting along the European Union. There is no question the merger will be mired in lengthy and costly negotiations that probably will go the same way as the ill-fated BA/KLM (later bought by Air France) merger and the BA/AA alliance. What a crazy world we live in, where an industry that is barely hanging on, cannot lift itself up by the bootstraps to return to viability, because of an emotional issue – nationalism.