This video was made possible by CuriosityStream. Watch the companion video to this, plus tonsof other exclusive videos, by signing up for the CuriosityStream/Nebula bundle deal, currentlyon sale for an unbelievable dollar a month at CuriosityStream.com/Wendover. Airlines are pragmatic. Each, inherently, is a sizable organization a degree of scale is necessary due to the massive capital costs needed to, quite literally,get a plane off the ground. There are no mom and pop airlines. Therefore, airlines have the resources toanalyze choices to a far greater level of detail than most businesses—any decisionthat we, the public, see has passed through such a level of review, such a level of scrutiny,that it must mean something. Airlines typically don’t make emotional,informal, or off-the-cuff decisions. Therefore, it’s odd how much airlines careabout climate change because, from a theoretical perspective, they shouldn’t. It doesn’t currently make sense for airlinesto care about climate change. Of course, from a moral perspective it does,but businesses, traditionally and theoretically, don’t value morality higher than profit. That’s the role of non-profits—the organizationalstructure designed to value social impact first and foremost. For-profit business, in the traditional sense,are designed for profit.
Therefore, properly managed, they do whatgenerates the most profit, and for airlines, right now, what enables that is to not careabout climate change. Carbon doesn’t have a cost for airlines. With a few exceptions, emitting more carbondoes not cost the airlines anything, but it enables them to make more profit, so the theoreticallycorrect thing for airlines to do is to emit the amount of carbon that enables them togenerate the most profit, regardless of environmental consequences. Some say airlines care about climate changefor public relations, and they’re right—but only to an extent. Airlines clearly posture as caring about theircarbon footprint because consumers increasingly care about their carbon footprint, so beingviewed as a greener airline translates to being a more desirable choice for consumers—who,unlike for-profit businesses, do care about what’s morally right to an extent. However, net carbon-zero is expensive, biofueldevelopment is expensive, sustainable aircraft development is expensive—all more expensivethan would make sense if airlines and aircraft developers exclusively cared about PR. So, the reason why airlines are starting tocare about climate change is because they’re terrified of the r-word: regulation. It’s started already. In France, the national assembly has passeda bill that would ban short-haul flights on routes that could be travelled in two anda half hours or less by train. Here’s the worst thing for airlines: measureslike this make absolute, perfect sense.
With airports located away from city centers,security lines, less reliable departure times, and more, no journey that would take two andhalf hours by train could reasonably and reliably be accomplished faster by plane. The bill would still allow this shorter flightsto operate for the purposes of connections to longer-haul flights, but passengers justcouldn’t book the short flights by themselves. So, there’s no real downside, but there’sthe massive upside of shifting travelers onto trains, which in the case of France emit 77times less carbon per passenger on journeys of this length. While this bill faces an uphill battle asit needs to pass through the more conservative French senate before enactment, it’s nowonder why similar measures have been seriously considered or implemented in the Belgian regionof Wallonia, Austria, the Netherlands, and by countless employers globally. The problem for airlines is that they justdon’t have any good arguments against regulations like these. A move away from the shortest-haul, most replaceableflights will be the start, but it won’t end there. As one of the more carbon-intensive industries,airlines will face increasing regulatory barriers to their operations—unless, of course, flyingbecomes less carbon-intensive. Flying must happen, in many cases. Governments will not ban flying, full-stop. Governments will not heavily restrict flying,full-stop. But governments will make it so the externality,the carbon footprint, is priced in to the cost of flying. That is, governments will create structuresin which greener flying is cheaper flying with, for example, hefty carbon taxes.
So, why airlines care about climate changeis because airlines are pragmatic, and its quickly and increasingly become the case thatcompetitiveness, as companies, is linked to how green they are. Biofuels, engine efficiency improvements,carbon offsetting—these things all help, but they’re incremental changes that canonly take flying from being incredibly carbon-intense to very carbon-intense. However, there is one solution that can actually,realistically turn flying into a somewhat sustainable method of transport: electricaircraft. Now, here’s the thing: electric aircraftare no massive innovation. They existed in 1973 when the MB-E1 becamethe first to fly with a human crew, they existed in 2015 when the Solar Impulse 2 circumnavigatedthe world exclusively on solar power, and they existed in 2020 when the Pipistrel VelisElectro became the first commercially-available type-rated electric-powered aircraft. There’s not a whole lot technologicallythat has or is preventing electric aircraft from existing.
What is is the business case. Batteries are just more expensive and lessenergy dense than fuel, so with carbon emissions always having been free for airlines, it justalways made sense to use petroleum-based fuel. Aircraft development is an unbelievably expensive endeavor, and getting an aircraft certified for commercial use using a new type of motoris just all that much more, so it never made sense for a manufacturer to go through allthat for an aircraft that didn’t have a strong business case. Now, however, for the first time ever, a stronghypothesis of a business case has developed and, if it works, we will see the the mostdramatic shift in how commercial aircraft work in generations. Electric aircraft inherently have constraints. While much progress has been made in the pastdecade to bring down the price of batteries, and they now cost 1/10th as much per kilowatthour compared to a decade ago, less has been done to increase battery energy density—thatis, the amount of electricity stored per pound or kilogram. That’s because, with electric vehicles,the primary novel application, weight doesn’t matter that much—it’s easier to increaserange by bringing down cost and putting more batteries in than improving their energy density. It’s different with aircraft.
The lighter they are, the further they canfly, so there are diminishing returns in adding additional batteries since doing so meansone needs to add even more batteries to provide the energy to carry the weight of those batteriesand so on and so forth. Also, for now, all viable electric aircraftare propeller-driven, specifically because it would be far more costly to develop anelectric jet engine, and the time savings it would offer on the short-range flightsthat electric aircraft would be capable of completing would be negligible. So, airlines need to find a use case for short-range,slow, electric aircraft. Conveniently, it already exists. From their Denver, Colorado hub, United Airlinesflies to sixteen destinations less than 250 miles or 400 kilometers away. In particular in this case, many of thesedestinations, such as Montrose, Aspen, Eagle County, and Hayden, are high-yield and high-frequencydespite their close distance since they connect tourists to popular ski towns. In the case of Widerøe, a Norwegian regionalairline, 19 of their 47 overall destinations are within 250 miles of their Tromso hub,and a strong majority of their routes are over distances less than this. Then, there are airlines like Cape Air, whodo not fly a single route over 250 miles in length.
The use case for electric aircraft alreadyexists, because airlines like Cape Air have already found it, just not yet using electricaircraft. They fly from large hubs to small destinationson 9-seat propeller aircraft, and partner with mainline airlines to offer connecting itineraries. For them, the electric aircraft range constraintsdon’t matter since all their routes are so short, and therefore the speed constraintsdon’t either. When Cape Air flies from Martha’s Vineyardto New York JFK on their propeller-driven Cessna 402, the flight takes an average of70 minutes, whereas Delta, flying the same route using a jet CRJ200, takes 45. When Cape Air flies from Nantucket to BostonLogan airport, they take 39 minutes, whereas JetBlue, on their E190 aircraft, takes 28. Those extra 11 or 25 minutes are negligiblein the overall travel experience, especially considering that Cape Air’s boarding times,with 9 passengers, are certainly quicker than with Delta’s 50 passengers or JetBlue’s100. So, not only could electric aircraft seamlesslyreplace all of Cape Air’s flights, but they could also take over some of Delta, JetBlue,United, or other larger airlines’ routes without a negative impact to overall triptime. So, the use case exists, passengers wouldbe accept the switch, but what do electric aircraft do for airlines, aside from enablinga continuation of operations in the face of increasing regulation?
A very specific answer for this exists thanksto one short document. This is the US Department of Transportation’sOrder Re-Selecting Airline document for their essential air service subsidized flights fromBoston Logan Airport to Augusta and Rockland, Maine. You see, the US government subsidizes routeslike these to small, remote communities across the country, in order to improve connectivityand economic opportunity for these areas. As it’s the US taxpayer funding these programs,the bids from airlines to operate these routes are a matter of public record, providing atruly unique glimpse into accurate operating costs for a single airline route. While they competed against Boutique Air,Cape Air ended up winning the bid, so they now operate the route to Rockland, Maine. In exchange, they received a subsidy of $2,218,126for their first year, 2018 to 2019, ramping up to $2,495,090 by their fourth. Rockland is a tourist hotspot in the summer,but it returns to a quieter state for the rest of the year, so the airline’s obligationsfor flight frequency varies by the season—anywhere between three daily round-trip flights inwinter, to six in the summer. All in all, though, they’re obligated tooperate some 1,365 flights annually, representing 12,285 total available passenger seats ineach direction. According to Cape Air’s estimates, thisroute should cost some $3,350,746 a year to operate.
They estimated some 15,122 total passengerswould fly, but publicly available data shows that only 6,733 boarded their planes in Rocklandin 2019. Assuming it’s roughly the same in the otherdirection, as one would expect, that means they saw only 13,466 total passengers, representinga 54.8% load factor. Selling tickets for an average of $83, theairline likely therefore brought in $1,117,678 in passenger revenue which, combined withtheir $2,247,721 year two subsidy, means they earned some $3,365,399 in revenue. Subtracting their annual cost estimates, thatmeans they only turned $14,653 in profit or $1.09 worth per passenger. This is how tight airline profit margins canbe. But what would they be if this route was operatedby an electric airplane? Well, to start, fuel costs would be almostentirely eliminated. Electricity isn’t free, but its costs areso low compared to fuel that it essentially becomes a non-factor. Electricity can also be converted into a capitalcost, instead of ongoing cost, through investing in solar or wind energy generation, whichCape Air has hinted at doing. So, this $844,002 in annual fuel costs—wecan consider it, for all intents and purposes, eliminated. Other costs would go up. Cape Air budgets $269,903 per year on ownershipcosts—meaning, the amortized, prorated cost of owning their aircraft. While details are not known, and so an accurate estimate would be impossible, there’s no world in which a new, electric aircraft ischeaper than the mass-produced, long-proven Cessna 402. It would’t be unreasonable to expect thatownership costs would, say, double.
Then, there are the maintenance costs. These would be significantly lower than withtraditional internal combustion driven aircraft. The thing is, electric motors just so simple. They have exactly one moving part—the shaft. Electric vehicles typically never requiremotor maintenance, as there’s really just nothing that can break or wear down withintheir lifetimes. This same principle will apply to electricairplanes, as so much of the maintenance work aircraft require currently is on their engines. While its very tough to know with any confidencehow this will play out in reality with planes that don’t yet exist, there’s a worldin which aircraft maintenance would cost a fraction as much. Overall, these three factors combined—anear-total elimination of fuel costs, a dramatic increase in ownership costs, and a dramaticdecrease in maintenance costs—track with Cape Air’s estimates for a 40% reductionin operating costs. That is enormous. On their Rockland route, assuming no changein revenue, that would take $1.09 in per passenger profit, and turn it into $100.62—a numberso dramatically different that it doesn’t even sound correct. This would immediately turn Cape Air intothe highest operating-margin airline in the world—full-stop. This is why the future of short-haul flyingis inevitably electric. This is why, in 2019, Cape Air became thefirst commercial customer to order the Alice—a nine-passenger electric aircraft developedby start-up aircraft manufacturer Eviation.
It will be able to fly each and every oneof the airline’s routes roundtrip without charging. There are certainly no guarantees that theAlice will see the light of day—aircraft development is an incredibly costly, risky,and long process that can spell failure for even the strongest concepts—but everythingso far suggests that Eviation has just as much a shot at success as all the other playersthat have entered this race. While Cape Air may be pioneering the use ofthese aircraft in the commercial context, as they have the advantage of a pre-existing route network and business strategy that are conducive to their use, the release of suchaircraft will fundamentally break a long-held truth about aviation. Short-haul flying is currently more expensive,per mile, than long-haul flying, due to the high fixed costs involved with the groundoperations at each airport. However, with electric aircraft availableexclusively on shorter routes, at least in the near-future, there’s a reality in whichits cheaper per mile to fly 200 miles than 2,000 miles. That will shift airlines’ focus to moreregional route networks, and connect communities that previously were too small to make economic sense for airlines. It short, not only will electric aircraftallow airlines to continue to operate short-haul as regulations ramp up, but it will allowthem to increase it in a sustainable, profitable way. The future of flying is inevitably electric,because the business case is just too strong to ignore.
Plenty of progress has already been made to make electric flying a reality, and as much as I’d like to tell you in detail about the specific electric aircraft that you might fly in a matter of years and how they work, there just isn’t the time in this video. The YouTube algorithm has just decided that15-20 minutes is our sweet spot for video length, and if we stray from that, the videos don't perform well. Conveniently, though, Nebula doesn’t have an algorithm. So, I created a companion video about that topic and put it there. Nebula subscribers can watch that, our regular videos early and ad-free, other exclusive companion videos and extended cuts, and our big-budget Nebula originals—of which we have plenty, and we have our biggest one yet in post-production right now. Making that even better, you can get access to Nebula through the bundle deal with CuriosityStream, which is on sale for Father’s Day at its lowest ever pricing of under $1 per month. Of course, by signing up through them, you also get access to their massive, super-interesting library of non-fiction documentaries and shows. For example, and I’ve recommended this before because it’s so good, you could watch China’s Last Little Train—about the narrow-gauge railway that connects one of China’s most isolated regions.
All together, this bundle provides a massive amount of stuff that you’ll actually watch, and it comes at an absurdly low price. Again, the current Father’s Day sale is the lowest their prices have ever been, just under $1 a month, so there has never been a better time to sign up at CuriosityStream.com/Wendover and, best of all, you’ll be helping all these independent creators stay independent while you’re at it.
Reviewed by Kashif
on
August 22, 2021
Rating:
No comments: