Originally Posted by Globaliser
There is one piece of aviation history that illustrates this last point. London-New York was the only commercially viable year-round Concorde route, driven by regular business traffic of the highest yield type. It was also one end of the only other commercially viable scheduled Concorde route, the seasonal low-frequency run to Barbados.
Don't forget that supersonic flight was restricted over land. This was a big reason why LHR-JFK and LHR-BGI were the only "viable" routes (except for CDG-JFK, n'est-ce pas?). I imagine that LHR-TLV and JFK-LAX might have been very successful routes for the Concorde as well, if not for the overland restrictions. And since it's operating costs were so high, it could only be used on the highest yield routes, not just high volume ones.
But I digress...your point about LHR being a natural hub is correct. Add to your reasoning the fact that, as transatlantic air travel grew from its infancy, aircraft ranges were limited such that LHR was a required stopping point, as it was the closest major European city before the transoceanic segments. And recall that many early flights had to stop in BGR on their way.
I also agree with the argument that there is room for both the 7E7 and the A380. The 380s will largely replace the 747s on the highest-volume interhub routes. The 7E7, however, addresses the emerging point-to-point model exemplified by many of the LCCs and the hub-to-secondary model of some legacy carriers.
Consider WN. (Read on...I'm not suggesting they'll be a 7E7 customer!) WN for a long time was just a low price, and it was marketed primarily to vacationers. But over the last many years, WN has seen increased usage by business pax. Even as legacy carriers have matched WN's prices on certain city pairs, WN has grown their share of business traffic. Why is that? Well, most business flyers will tell you that they fly WN for the nonstops/directs or to avoid hub connections. They may also fly because of the low prices, but the direct flights are certainly a big factor. Now extrapolate that to longer routes on the legacy carriers. For someone to fly from, say LAS to PVG, the routing would have to be LAS-US hub-PVG or even LAS-US hub-Asian hub-PVG). Vacationers from Shanghai who really want to visit Vegas might be willing to connect once or twice. But business flyers (and there are a heck of a lot of conventions in LAS, and a heck of a lot of businesses in PVG now) would probably pay more for the opportunity to fly nonstop PVG-LAS, or at the least to cut out one hub connection from a two-connection routing. Much like business travellers will fly WN to get a nonstop IND-MCI instead of having to go IND-ORD/DTW/CVG/MSP-MCI, for example. Think of other examples where there might be 200-250 pax wanting to fly between two cities without the hassle and time requried to connect through one or two hubs. US cities such as LAS, PHX, MSY, TPA, RDU, DEN could have enough demand for 5x weekly nonstop to HKG, SIN, PEK, PVG, NRT, SYD, TLV, FCO, CDG, LHR, etc. And the only way to meet that demand would be on a super-efficient aircraft like the 7E7.
The other model that the 7E7 addresses is the hub-to-secondary model. A great example of this routing model is CO's expansion of service into Europe. There has been much discussion of the aircraft used for CO's new European service ex-EWR to places such as GLA, MUC, EDI, OSL, etc. What they're doing now is shifting 777s to the highest-volume routes, replacing shifted 777s with 767s shifted from second dailies or lower-volume routes, and then replacing the shifted 767s with reconfigured 757s. The 7E7 would serve many of these markets with a lower CASM than the 757s or 767s. It may also allow an airline like CO to offer more frequent flights on the high-volume routes (such as EWR-CDG) than by using the 777s. And it certainly will allow them to start serving more cities ex-EWR than currently; lots of Asian destinations would be ideal for this aircraft. Considering that the recently retired uber-CEO of CO, Gordon Bethune, is an ex-Boeing guy, you can see how this kind of strategy lines up with Boeings ideas on the 7E7.
The fact is, business travellers are still where a lot of the big money is. And they won't pay higher fares for the exact same service as the people on holiday three rows back. But they will pay for direct service and more frequent service. That's still going to be the future, and that's where the 7E7 fits in.