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Monday, 15 October, 2001, 13:45 GMT 14:45 UK
Demand for Concorde uncertain
A British Airways Concorde
Concorde's relaunch may be "good for morale"
By BBC News Online's Nick Edser

It now seems likely that Concorde is to resume commercial services next month, but many people are now wondering whether the demand will be there for the service.

The relaunch of a premium air service at the current time may seem odd, with the global economy slowing and the airline industry in crisis following last months terrorist attacks.

And financial analysts seem split over whether Concorde will be able to attract customers when it returns to the skies.

Profitable

Concorde has now been grounded for over a year since the fatal crash in Paris last July.

It has been estimated that the grounding is costing Air France and British Airways (BA) between $4m (2.8m) and $10m a month.

Despite its small size, the high price of fares means that Concorde was a profitable service, with BA thought to be making between 10m-20m each year from the service.

Andrew Darke, transport analyst at Williams de Broe says that while Concorde is "not a huge money spinner" he adds "anything in the current environment which contributes to revenue is welcome."

Unique service

The main factor in Concorde's favour is that it offers something no other service can.

It can cross the Atlantic in three hours, nearly five hours less than the usual transatlantic flight.

"It's a unique product in that it takes such a small amount of time, there is a need for this kind of service," said Mr Darke.

"It's still going to be a product that people want."

BA has launch a PR drive to persuade previous Concorde passengers return to the service.

The company has held open days to explain the safety modifications that have been made to the planes.

Difficult environment

But predicting whether these customers will be prepared to pay for the Concorde service when it resumes flights is tricky, as circumstances have changed considerably since July 2000.

The terrorist attacks in the US has plunged the airline industry into crisis, with passenger numbers sharply down, and over 100,000 jobs lost.

Also the global economic slowdown means many companies are looking to trim expenses, which may leave Concorde vulnerable.

Chris Avery, aviation analyst at JP Morgan, says he hopes demand will be there but "forecasting anything in aviation at the moment is very difficult."

Morale boost

One thing analysts do agree on is that the resumption of Concorde flights will provide a boost for BA after a series of recent gloomy announcements over jobs and services.

Andrew Light, airline analyst at Schroders Salomon Smith Barney, says it is "important for morale" and may also help in winning back customers to other BA services.

"It's all part of the brand positioning for BA," he says, as the airline tries to attract customers who are prepared to pay more for a higher level of service than the low-cost airlines provide.


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The crash

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See also:

05 Sep 01 | Europe
Concorde to get flight approval
28 Aug 01 | UK
Concorde faces flight delay
24 Jul 01 | Talking Point
Can Concorde regain its status?
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