The Air Current

Crafting a summer reading list is easy. Sticking to it is a bit more challenging. One finds themselves gravitating back toward familiar parts of their bookcase. Revisiting one such shelf, a well worn text is read once more: The Sporty Game by John Newhouse is the definitive book on the airliner business. Newhouse died in 2016 at the age of 87.

Published in 1982, Newhouse’s anecdotes and lessons are as relevant, prescient and familiar as ever 36 years later.

“It is a time of rapid and sweeping change in the airliner business. In America, only Boeing is likely to hold its own in the years ahead. Whether Boeing continues to prosper and accept the risks of its trade will depend on some things that it probably can control and others, as for example world politics, over which it has no control.”

Far ahead of its time, The Sporty Game captured nearly all the trends we see in the aviation today: The tug of war for Britain on whether it would follow Europe or the U.S. for its industrial future, the rise of the importance of carriers in Asia-Pacific, and the threat of a distant new patient, well-funded entrant – then Japan.

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“Also,” he wrote. “the seating is becoming denser as airlines try to offset rising operating costs by adding rows of seats. And there is a trend toward slightly narrower and lighter seats, even though people are becoming gradually larger.”

And airframer frustration with propulsion providers, despite their inextricably linked fortunes, haven’t seemed to have subsided in the intervening decades:

Although rejoicing in multiple engine suppliers, Boeing doesn’t approve of any of them. Joe Sutter reflects an attitude that runs through Boeing: “Rather than complete their job prior to delivering engines,” he says, “they let the bugs and problems emerge after the airplanes are in service; at that point, the carriers and manufacturers share the problems and are expected to pick up part of the bill.”

The familiar modern lines of 1982’s aviation trends are too numerous to list. Crafted in the years following deregulation, the U.S. airline business was a mess as it tried to understand the competitive landscape after decades of Civil Aeronautics Board shepherding.

“It may be too soon know what or perhaps even how to think about deregulation,” Newhouse wrote. “Its Darwinian logic might eventually world to the advantage of both the industry and public by strengthening some airlines and pushing the less fit toward merger or oblivion.”

More than a decade of consolidation has left around ten major carriers, but more than 80% of passengers fly today on three global mega airlines. Richard Ferris, United Airlines’ then Chairman, said then: “Watch the blood on the floor. It will get so deep that the carriers become rational.”

From the collection of Tom Harris.

As for the airplane makers, it was evident in Newhouse’s estimation that McDonnell Douglas was on a path toward oblivion and Airbus was ascending slowly, but steadily. “What isn’t clear,” he wrote. “However, is whether [Airbus] is destined to remain in second place or gradually to become Boeing’s equal.”

You could read Newhouse’s deep exploration of economic and political forces driving the business of flying and be forgiven if you thought it was written today — with the exception of a few changed characters and aircraft designations.

“The hole in the market,” according to a Boeing sales executive “was right there—halfway between the 727 and the L-1011” or roughly 200 seats, wrote Newhouse.

It was the middle of the market of its day.

At the time, the debate inside of McDonnell Douglas was a precursor to a familiar one we see again in 2018 as Boeing weighs the business case for its own New Middle-Market Airplane (potentially the 797) against a squeeze by a notional Airbus A321XLR.

“Boeing’s 757, slightly smaller and narrower than the 767 discouraged McDonnell Douglas from building the DC-11, even though three of the major airlines-Delta, United and American-had encouraged the company to build it, in part because they wanted competition for its own sake, in part because they were not particularly attracted to the 757 itself. As conceived, the DC-11 was a double-aisle airplane and hence more comfortable than the longer, single-aisle 757; although the intended seating capacity was about the same for both, the DC-11 was supposed to have lower operating costs than the 757 because of certain performance advantages and, overall, a more modem design.

However, while aimed at the same market as the 757, the DC-11 would have cost the airlines considerably more to buy and would not have been available as soon. Of the three airlines most interested in it, only Delta could have made the necessary financial commitment at the critical decision point-late 1980. United and American weren’t ready-at least, not financially-and all the airlines wondered whether McDonnell Douglas, at that stage, really could surmount the problems of creating a new airplane, one that fulfilled the company’s strong claims for it and would be cheaper to operate than the 757.”

Delta is still interested. Notably, the 757 of Newhouse’s day was a heavily modified 727, not the clean sheet design we came to first fly with Eastern Airlines in 1983. James S. McDonnell, in his decision to shelve the DC-11 for good, often replied to those who urged him to move forward: “There may be a hole in the market, but why should I fall into it?”

A September 1978 Boeing brochure highlighting the features of the 757 and its commonality with the 727. From the collection of Tom Harris.

Even the verbiage of The Sporty Game is alive and well four decades later, as Boeing tries to replace the 757 and 767 in a single airplane. Back in Seattle in the late 1970s, Boeing was pushing ahead with twin airplane designs.

Along with the 757 (then the 7N7), was the 7X7, the precursor to the 767. Ferris, whose voice features extensively across the book’s 231 pages, was “dazzled by the low seat-mile costs of the smaller 7N71 and asked Boeing to design something that combined the customer appeal of two aisles with the superior economy of a single-aisle airplane.”

The X stood for experimental. T. Wilson (then-Boeing’s top executive) said: “The design boys wanted a specific number. I said no. A number would imply we know what the hell we’re doing to build and we don’t. So the 7X7 is whatever we’re going to do next.” Boeing has learned caution, if not humility, from its 747 experience. It was unwilling to settle on a design before the market was clearly ready for it.

But of the great risk — betting the company on an all new airliner — was the very heart of the sporty game.

“Companies that tempt fate by failing to plan seriously for the unknowns may pay dearly for their rashness,” Newhouse wrote.

Everything and nothing has changed.

Jon Ostrower is Editor-in-chief of The Air Current. Prior to launching TAC in June 2018, Ostrower served as Aviation Editor for CNN Worldwide, guiding the network's global coverage of the business and operations of flying. Ostrower joined CNN in 2016 following four and half years at the Wall Street Journal. Based first in Chicago and then in Washington, D.C. he covered Boeing, aviation safety and the business of global aerospace. Before that, Ostrower was editor of the award-winning FlightBlogger for Flightglobal and Flight International Magazine covering the development of the Boeing 787 Dreamliner and other new aircraft programs from 2007 to 2012. Ostrower, a Boston native, graduated from The George Washington University's School of Media and Public Affairs with a bachelor's degree in Political Communication. He is based in Seattle.

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