The Advent of the Hybrid Air Vehicle

by Reihan Salam

The new Hybrid Air Vehicle, which Rachel Arndt of Fast Company describes as “a mix of airplane, airship, and hovercraft,” has signed a number of big contracts recently, including a multi-billion dollar contract to deliver cargo in hard-to-reach areas in northern Canada. Among the many advantages of HAVs is that they can land almost anywhere, they require relatively room to take-off, and they are impressively safe, particularly when compared to more primitive airships. But the following from Arndt is particularly intriguing:

Two forward and two aft engines guide the aircraft. They also make for a fuel-efficient flight–the HAV burns as little as a quarter of what an airplane uses. The downside: It tops out at a leisurely 120 mph. A New York to L.A. trip could thus take more than 20 hours.

That, of course, is a prohibitively long trip. One wonders, however, if something like the HAV might prove a viable competitor for coach travel, traditional jet travel, and rail travel over shorter distances. For example, Amtrak’s Acela Express theoretically can achieve a maximum speed of 150 M.P.H., which is actually slower than speeds the pre-Amtrak Metroliner achieved during the late 1960s. Yet the average speed of the Acela on its New York to Boston route is 72 M.P.H., much slower than the HAV can achieve. 

The trouble is building an alternative infrastructure. The great advantage of passenger rail in the northeast corridor is that security theater has made air travel an increasingly unpleasant and time-consuming experience, and major U.S. airports tend to be located at a considerable distance from central business districts. HAVs would require considerably less space than airplanes, including most general aviation aircraft, yet they’d still need a fair bit of space in reasonably close proximity to CBDs. Arndt writes the following:

Thanks to their ability to fly like airplanes–and to land almost anywhere, including on water–HAVs can serve as passenger shuttles, landing in empty parking lots to ferry hundreds (or thousands) of passengers.

If that’s really true, well, that’s completely huge. We might be seeing the advent of a truly disruptive transportation technology. Tim Lee, who like me is an enthusiastic Clayton Christensen fan, offers a useful definition:

What makes a technology disruptive is that it’s dramatically simpler and cheaper than the technology it replaced.

Think about the extraordinarily expensive infrastructure that has built up around air travel, the number of moving parts that must be maintained, the crippling labor contracts, etc. Air travel is a legacy industry that is being crushed under the burden of fuel costs, regulation, and decades of security anxieties. Like a classic disruptive technology, HAVs are inferior to passenger jets for the obvious reason that they are much slower.  But hey, they are simpler and cheaper. 

To get back to the niche travel concept, they’d also need to achieve a fair bit of volume — it helps to have many trips scheduled at regular intervals, as it gives passenger more flexibility. Perhaps the cost advantage wouldn’t be big enough to displace coach travel, though I wouldn’t be so sure. Are these obstacles insurmountable? 

The advent of HAVs also reminds me of the frustrating narrowness (I had originally written “stupidity,” which still applies but seems somehow ungenerous) of many of our conversations around infrastructure. Aging legacy technologies like high-speed rail, which require the carbon-intensive manufacturing of rolling stock, etc., are touted as the wave of the future because, well, haven’t you heard the Chinese are building HSR? Our decaying roads are often presented as a symbol of American decline, and I, like many people on the right and left, believe that large-scale infrastructure investments are entirely appropriate, though I tend to emphasize the importance of road pricing, private investment, and other measures that are designed to encourage only cost-effective, sustainable investment. 

But consider the following from Keith Barry at Jalopnik:

While the word “airship” may conjure images of prewar zeppelins and Goodyear advertisements, the aircraft are quite useful for carrying cargo to remote locations, because they have greater payload flexibility than airplanes or trucks. They’re often cheaper to operate, too.

“If you look at the mining operations in the North, the traditional way of opening a mine is to build a road to it. That’s very expensive and time consuming,” said Barry Prentice, a professor of supply chain management at the University of Manitoba. He builds, tests and studies airships.

Prentice estimated the cost of a road to a gold mine in Baker Lake, Nunavut, at $110 million – an amount not easily recovered if the mine shuts down – and said obtaining the permits to build it can take as long as three years.

“The day after your mine is finished, the road has no value whatsoever,” he said. “The idea of being able to use an airship to bring the product back out means you could start your operations sooner, and have the flexibility, if mineral prices turn, to cease operations temporarily.”

In theory, HAVs might allow us the ability to leapfrog over traditional road and rail options for the transport of heavy goods, as these vehicles can deliver freight at “one-quarter the cost of other alternatives.” Now, the alternatives in this case are alternatives in remote regions, so presumably the gap would be smaller relative to urban trucking and freight rail, the latter of which is extremely cost-effective. But due to wear-and-tear on roads, we have good reason to believe that truckers aren’t capturing the full social cost of their operations, which would make HAVs an attractive alternative if we ever subject trucks to more aggressive (and appropriate) pricing mechanisms.

And HAVs might also release shippers from the tyranny of the megafirms that dominate the U.S. rail freight industry, the subject of a brilliant Fortune story by Mina Kimes:

As the number of railroads has decreased, the number of captive shippers has grown. Szabo, the shippers’ lobbyist, estimates that more than one-third of all shippers are now served by only one railroad.

Their rates are skyrocketing. OxyChem, a division of Occidental Petroleum (OXY), says its rates have jumped by as much as 160% over the past five years. Dairyland Power, a utility in Wisconsin, reported a single-year increase of 93%. Chemical maker PPG Industries (PPG) says the rates it pays to ship chlorine, which must be moved by train, have climbed more than 100% since 2004. By contrast, the rates it pays for other chemicals that have alternate transportation options have risen by just 20%.

And rates tell only part of the story. Like airlines, freight railroads now impose a bevy of “extra” fees, such as charges for storage and the diesel fuel that powers their engines. The carriers have also raised indirect costs by pushing customers to provide their own train cars.

The railroads’ power is amplified by an unparalleled set of antitrust exemptions. The industry’s regulator, the STB, permits several practices that severely restrict competition: The Big Four are allowed to sign secret agreements, known as “paper barriers,” with short-line railroads, in which the small fry agree to funnel all their traffic to just one big railroad. They are also permitted to refuse to connect customers to a competing freight line.

Kimes describes the efforts of shippers to secure regulatory relief from the power of the railroads. Yet shippers might instead find relief from HAVs. 

So there you have it. At least two industries that are dominated by a small number of incumbent providers that are notorious for screwing customers — passenger rail and freight rail — and another industry that exacts a heavy environmental and economic toll — trucking — could get their hats handed to them by strange blimp-like machines dreamed up by a bunch of marginalized British nerds. 

This is THE BEST STORY EVER. Or rather a mildly diverting fantasy. I’m obviously getting ahead of myself. 

Now let’s get ready for the failures of imagination, the regulatory roadblocks driven by threatened incumbents, and all the rest of it.