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ZEHRA – A bold innovation or a commercial enigma?

July, 2011

Entrepreneurs, technologists and innovators seeking to commercialise novel ideas or inventions can also learn useful lessons from the advent of projects such as ZEHRA.

Author: Zaf Gandhi, Managing Consultant & Partner

The Zero Emission Hypersonic Transportation (ZEHRA) announced by the European Aerospace and Defence Systems (EADS) is a bold endeavour that captures public and employee imagination and the EU political agenda, whilst (temporarily?) taking the initiative from its US-based arch-competitor, Boeing.

The Vision

A bio-fuel powered aircraft, capable of flying a distance of approximately 3500 nautical miles in around 2 hours, carrying 100 passengers and their baggage, has a significant appeal. And, therefore, the conceivers of ZEHRA ought to be commended for the boldness of their vision and rationale, especially in view of the pending climate change imperatives and the need to reduce the aviation industry’s dependency on oil (kerosene).

The History

Those of us privileged enough to recall the Concorde era will be reminded that Concorde (whose mission profile is intended to be replicated by ZEHRA) too was a technological and design marvel. A 1960s design that had the charisma and sentimental appeal that allowed it to remain operational until 2003. Unfortunately, it turned out to be a commercial liability for its makers and operators.

It is also useful to note that the equally ambitious projects (as ZEHRA) that were proposed by HOTOL and its successor the ‘Son of Concorde’ never even saw the daylight outside a design office. Hence, we should know all too well that when it comes to balancing the tough commercial realities and technical challenges of the aerospace and air transport industry, best intentions and aspirations often remain unrealised.

As forerunner to ZEHRA, let’s for a moment consider some of the notable developments in the more recent days of the commercial aerospace industry, particularly the EADS Airbus A380 and its Boeing counterpart - the 787 (now known as Dreamliner).

The Reality

When we compare the merits and drawbacks of the two competing designs, it is clear that the A380 favours the hub-and-spoke type of airline operation and economics (i.e. a lower cost per seat-mile primarily due to 15-20% greater fuel efficiency than its closest competitor Boeing's 747-400 (Jumbo derivative), and passenger capacity in the range of 525-853 seats, depending on configuration).

On the other hand, Boeing’s Dreamliner is smaller-sized (210-290 seats depending on configuration/variant) than the A380. The Dreamliner leans more towards point-to-point airline operations, and offers a longer maximum flight range (8,500 nautical miles), logistical and operational flexibility, and radical (80% composite by volume) airframe structural design to achieve a competing value proposition and economics - including a target 20% fuel efficiency over its closest relative, the Boeing 767.

The A380 has also presented, and will continue to present, a significant number of logistical challenges for its manufacturer, airline operators and airport authorities, and even for the passengers.

From a passenger safety perspective, the A380 design has also had to overcome a vast array of challenges. And given that a larger aircraft will have significantly more parts and components, one would reasonably expect that A380’s scheduled and unscheduled maintenance effort and cost will be significantly higher than its smaller rival. However, a direct comparison would be more sensical in terms of the total cost of ownership, with the operating cost compared on a per seat-mile basis†, for the whole in-service fleet of each type of aircraft.

Granted, Airbus does provide reliability and spare parts availability assurances with its Flight Hour Services (FHS), as well as 24/7 AOG (aircraft on ground) support to airline customers, combined with on-board electronic access to central maintenance system (CMS), and a host of other tools to identify problems or faults before they occur.

Notwithstanding, the fact remains that it only takes one mission-critical part to cause a delay or cancellation of a flight, leaving 600 or so disgruntled passengers looking for hotel rooms; with the adverse knock-on effect on the airport passenger throughput, ground handling and passenger logistics. Experience shows that, as an aircraft ages, additional technical problems do tend to surface from time to time.

Boeing’s Dreamliner, which has yet to enter into service, has also had its fair share of delays and technical and supply-chain challenges. Given an almost all-composite airframe, one would also expect the usual learning-curve related issues around manufacture, assembly and in-service maintenance.

The Future

Thus, with ZEHRA, it would appear that EADS has switched its allegiance with size, and opted for speed instead. However, a more considered assessment reveals that not to be the case. With the A380, the underlying motivations for its super-size design was greater payload capacity, lower drag, and hence reduced fuel consumption, leading to a more economic (than Boeing's 747-400), eco-friendly, ergonomic and quieter product.

ZEHRA is a follow-on endeavour, and appears to be a compromise between fuel type and consumption and payload capacity, and the distance that must be flown to make ultra-high altitude cruise a practical necessity.

Given the proposed radical design and operational envelope for ZEHRA, with a commercial model that provisionally pegs the ticket price of £5000 (in 2050) per business-class passenger, and a production date of 2050 (first prototype 2020), ZEHRA is and will – for now – remain an enigma; especially when one takes into consideration the significant learning curve involved for the airline operators, pilots and maintenance service providers in owning and operating such an aircraft. Add to that the rapid advances in information and communications technologies (ICTs), including video conferencing and free internet based services, and the wallet share of the business segment shrinks even further.

Yet again, like many of its predecessors, the ZEHRA endeavour may help to generate a wealth of knowledge and improved understanding of the challenges of commercial hypersonic flight and ‘green’ power for aviation. These are crucial factors in maintaining European leadership and progress in this sector of utmost strategic and economic importance to our present and future generations. Therefore, for these reasons, the ZEHRA project may be worth taking the risk.

The Lesson

The key lesson for entrepreneurs and technologists looking to commercialise novel ideas or inventions over the medium to long term is, therefore, to pay special attention to the basic fundamentals and drivers of their proposition. This involves careful analysis of why the proposed idea or invention offers a sustainable commercial advantage over the current state-of-the art, as well as any alternatives that could be offered by potential or existing competitors.

Moreover, it is important to bear in mind that what appears to be the right product or service proposition today, may not be so when it enters the market after its often arduous and costly development cycle.

In order to realise a genuine innovation, one must consciously resist the temptation to go with the ‘flavour of the month’, hypothetical SWOT (Strengths/Weaknesses/Opportunities/Threats) analysis, or ‘peer pressure’, but learn to challenge the conventional wisdom often, and select the most appropriate resources, know-how, people (or advisers) and tools to manage the risk in the most effective way.

† Direct comparisons based on cost per flight hour, or cost per passenger, have a tendency to skew the cost figures depending on an airline's operational model (type of routes flown, buy or lease fleet, etc) and passenger load factors (which are indirectly related to ticket pricing and sales effectiveness, etc).

Audacious Innovation

As innovator and enabler of innovation for our clients, Excellis Business Consulting provides strategic advice pertaining to new product and/or service development, innovation management, market deployment and commercialisation.
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