When the 757 was built, it had the lowest cost to operate per available seat mile of any plane built. It also had very high thrust to weight ratio and eight wheels with brakes making it an excellent airplane for airports with short runways or high density altitude. The legacy airlines loved the 757, and wanted a newer version of the 757 that was lighter weight and even more fuel efficient. The plan to build a newer version was killed by September 11, cutthroat business maneuvering, and government ineptitude.
Following the September 11 terrorist attacks, passengers stopped flying on the legacy carriers that operated the 757 and shifted to smaller discount carriers. Without passengers, American, Delta, United and Northwest Airlines all went into bankruptcy, and carriers like Southwest, Jet Blue, and Value Jet argued that the legacy carriers were using an outdated business model and should go out of business, or at least be barred from buying new airplanes until they adopted their “low cost model.” They succeeded in killing any potential orders for the upgraded 757, while Southwest and Continental Airlines saw an opportunity to buy more 737 airplanes at a discount from Boeing, which was also suffering from the downturn in sales, and willing to put their efforts into a new version of the 737.
Boeing shifted the 757 upgrade to development of the 737 Max, a stretched version of the 737, which could be operated under the same type certificate as the earlier 737 airplanes that Southwest and Continental already flew.
Passengers quit flying the legacy airlines because passengers feared being the next target of terrorism, not because of the business model. But pressure from discount carriers convinced the government to intervene in future sales and change to the “low cost carrier” model. That meant fewer large airplanes operating thru hubs and an increase in smaller airplanes doing direct point-to-point flights. This created an increased demand for smaller and higher cost regional jets, while killing the next generation of 757.
The 757 was killed by orders for the New Generation 737, from smaller discount airlines who were able to convince our government that the larger legacy carriers were in bankruptcy because of a bad business model rather than the worst terrorist attack in history. It was a business tactic that was intended to hamstring the legacy carriers, while reducing the cost of their own airplanes.
Writer: Brian Rourke
