Flight International – 11 June 2019

ightglobal.com 11-17 June 2019 | Flight International | 75

PARIS

Concorde retrospective

Break-even required production of 60-70

First Heathrow departure, January 1976

Sidney Smart/AP/REX/Shutterstock

Dave Caulkin/AP/REX/Shutterstock

see BOAC and BEA, and Mason hinted that a
forced acquisition of Concorde was, at least,
conceivable – although not a course to which
the government planned to resort.
“We have no powers to direct BOAC to pur-
chase Concorde and it would not be desirable
to take powers in the forthcoming Civil Avia-
tion Bill to give a specific direction to the Air-
ways Board to do so,” he said. “We shall there-
fore have to rely on persuasion.”
Mason pointed out that BOAC’s experience
with the Vickers VC10 and BEA’s with the
Hawker Siddeley Trident 3B would “certainly”
result in a demand for indemnification against
losses if BOAC agreed to any government re-
quest to take Concorde against its judgement.
Sixteen airlines had placed 74 options on
Concorde but the government was aware that
operators would not place firm orders before
BOAC and Air France. The ministry of technol-
ogy stated in July 1970 that BOAC remained
“pessimistic” about the effect of Concorde on its
profitability: “Their latest expenditure forecasts
implied that they would lease Concorde. There
is a strong possibility that they will refuse to op-
erate Concorde without a subsidy.”
Even on a network of just five candidate
routes, requiring five aircraft, BOAC was indi-
cating that it would lose up to £3 million per
year for each Concorde in 1975-1976, and up to
£1 million per year by 1979-1980, if it operated a

mix of Concordes and 747s versus all 747s.

Prospects from other optioned customers,

particularly US carriers, were also fading. The

ministry warned that US airlines – including

American Airlines, Eastern Air Lines, Pan

Am, TWA and United – were unenthusiastic

and looking to reduce their interest to the

minimum number of aircraft necessary to

maintain their competitive positions.

MOUNTING DEFICITS

The central policy review staff memorandum

of November 1971 put the BOAC loss from

Concorde’s inclusion at £95 million – amended

to £110-200 million – over the period from

April 1975 to April 1980. It believed that BOAC

could afford to take a “more imaginative” mar-

keting approach to Concorde, including an in-

centive scheme, with special amenities to treat

each passenger as a “VIP in a hurry”.

Suggested amenities included “Concorde Su-

perbuses” – with on-board customs and immi-

gration – to transport passengers from central

London. More curious proposals included an

“air-ground radio service” for passengers, “spe-

cially-selected stewardesses”, and caviar and

sandwiches to permit “more passengers instead

of ovens to heat up pre-cooked duck”.

Despite its “commercial disaster” refer-

ence, and a description of the project’s man-

agement structure as “farcical”, the memoran-

dum said the government should “commit

itself whole-heartedly and publicly” to Con-

corde. It recommended the government en-

sure that BOAC did not order the aircraft later

than Air France and that Concorde be sold, at

least initially, at a subsidised price.

The bill for Concorde’s development had bal-

looned to £1.07 billion by mid-1974 – over £11

billion or $14 billion in today’s money – with

the UK’s share amounting to £535 million –

none of which would be recovered. Production

of 16 aircraft had been authorised: five for Brit-

ish Airways, four for Air France, with two other

jets unsaleable without refurbishment. No or-

ders had been received for the other five but,

even so, the French government – not entertain-

ing UK suggestions to cancel the programme –

was proposing to manufacture another three.

British Airways was estimating, by this time,

that its five aircraft would generate £110 million

in operating losses over 10 years. While the UK

government argued that this made the aircraft

“unmarketable” – and therefore justified cancel-

lation – it considered that the French govern-

ment would counter that marketability could

only be tested once the aircraft entered service.

The UK government, in May 1974, put the

cost of producing the 16 authorised aircraft –

of which 14 would be in service – at £360 mil-

lion, nearly £100 million more than the esti-

mated overall cost of cancelling the

programme inclusive of potential damages

from French government lawsuits. It listed

British Airways’ investment at £90 million.

DWINDLING INTEREST

Concorde’s customer base outside of the UK and

French operators had whittled away by this

point, and a briefing document from the Office

of the Lord Chancellor stated that the only seri-

ous negotiations in progress were with Iran Air.

“Recent fuel price increases and the weak

finances of many airlines give no reason for op-

timism for an early improvement in the market

prospects,” it added, in a section relating to the

French proposal to build three more aircraft.

Production costs for each Concorde would

exceed its sale price until the run reached

60-70 aircraft. “The chances of this figure being

reached are virtually nil,” sad the briefing. Pro-

posed fuel capacity hikes and weight savings

would not improve Concorde’s attractiveness,

as it would still generate the same noise and

would still fall short of full payload capability

on key routes including Lufthansa’s Frankfurt-

New York and Qantas’ Sydney-Singapore.

While the notes of a May 1974 cabinet meet-

ing acknowledged that the huge expenditure

on Concorde, including a continuing subsidi-

ary to British Airways, could be perceived as

having been “devoted to enabling a few privi-

leged passengers to fly faster at the taxpayers’

expense”, a paper submitted the day before, by

secretary of state for industry Tony Benn, put

forward several positive considerations.

“Concorde is the finest aircraft ever built,”

it said and, five years after its maiden flight,

the flight-test programme was well-advanced.

Future orders were “really possible” given

that US airlines would lose first-class passen-

gers to UK and French supersonic services, it

claimed. All new technology was costly to

launch, it pointed out, and the Soviet Union’s

Tupolev Tu-144, plus a possible re-entry to the

market from the US manufacturers, indicated

that supersonic travel was “here to stay”.

These suggestions proved to be wildly opti-

mistic. But the paper also advised that the UK

government should avoid the “severe psycho-

logical shock” of scrapping the programme.

Spared the axe, Concorde entered service in

January 1976. Two months later, aircraft 002,

the first UK flight-test airframe, was retired to

the Royal Naval Air Station at Yeovilton. ■