Betting on the Boeing 747: mass air transport (1966)

The long reach of the investment that set up the prosperity

The decision to absorb doubling demand in a single stroke, with a wide-body aircraft, can be read as rational given the premise of a licensed monopoly. As a way to secure carrying capacity while politically holding down extra flights, the jumbo meshed with both the technology and the institutions of the day. That JAL could commit to an aircraft investment liable to exceed its own sales was itself possible only because demand was guaranteed by the licensing system — and this single move did much to prepare the “world number one” of the 1980s.

Yet capacity built on the premise of guaranteed demand turns into a burden once the premise collapses. The jumbo — the very symbol of the carrying power JAL wagered on in 1966 — became, at the 2010 bankruptcy, a target of the cull, cleared away as the “retirement of large aircraft seating more than 300.” Capital spending that had set up the prosperity was rewritten, half a century later, as the emblem of overcapacity: how the logic of an era shielded by institutions rebounds in an era that has lost them is what this decision demonstrated, over a very long span of time.