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Last Updated: Friday, 10 October, 2003, 08:25 GMT 09:25 UK
Why economists don't fly Concorde

By James Arnold
BBC News Online business reporter

Concorde
The costs were sky-high, too

In June 1964, a Cabinet Office civil servant drew up a worried memo for the Prime Minister, Alec Douglas-Home.

Less than two years after the British and French Governments had signed a deal to develop the Concorde supersonic aircraft, and five years before its maiden test flight, the project was already spiralling out of control.

"There were always doubts about this project," the civil servant wrote, pointing out that it was already projected to cost as much as two Channel Tunnels.

Even assuming the host of technical snags could be ironed out, the sales outlook was highly uncertain, and state airline BOAC risked being saddled with "yet another unwelcome and uneconomic aircraft".

The Anglo-French entente made the project hard to junk outright, the civil servant conceded, but "a complete commitment... should be avoided for the time being."

Inevitable disaster

Shame no-one listened.

CONCORDE TIMELINE
Concorde factory
1962: Anglo-French accord signed
1962: "Concorde" name coined by Charles de Gaulle
1964: New UK Labour Government withdraws from project
1965: Government returns to project
1966: First prototypes assembled
1967: First Concorde unveiled
1969: First test flight in UK
1975: Bookings begin for first scheduled services, to Bahrain and Rio
1976: Commercial services begin; Washington routes added
1977: Services to New York begin, after years of opposition over noise levels
1978: Governments announce no more Concordes will be built
1980-81: Services to many destinations discontinued amid mounting concern over Concorde's economic viability
1982: Air France cuts back all services except New York route
1994: BA cuts back routes to focus on New York and charter market
2000: Air France Concorde crashes near Paris - first major incident in 25 years
2001: Services restart after almost 18 months on the ground and 17m in safety investment
2003: Concorde flies for the last time
Concorde has always appealed far more to politicians and engineers than to administrators and economists.

A trawl through the cabinet archives for Concorde's development phase - slowly becoming public under Britain's 30-year disclosure rules - reveals a torrent of official contempt for the project.

As late as 1971, when the aircraft was to all intents and purposes a fait accompli, Concorde was being called "a commercial disaster", which "should never have been started".

But the same paper conceded that political considerations gave London no choice but to "commit itself whole-heartedly and publicly to Concorde".

A big-budget project powered by politicians, but reviled by those who fund and administer it, was never going to be an economic success.

In 1962, Concorde was projected to cost 160m (about 2bn or $3.1bn in today's money).

By 1975, the year before commercial launch, more than 1.2bn - at least 11bn today - had been spent.

That's partly because the designers ran into a number of unforeseen problems, especially surrounding noise levels and the aircraft's revolutionary drooping nose.

But the overrun was also the result of interminable political spats across the Channel.

At one point, work was halted after the French insisted that the plane should have a Gallic final letter "e" in its name - the British stolidly referred to it as "Concord" during development.

The French, of course, got their way.

White elephant

If you force yourself to forget about the horrible trouble and expense of developing the aircraft, it is just about possible to make a commercial case for it.

Concorde cabin
Not exactly the lap of luxury
British Airways was always reluctant to talk precise numbers, but it was reckoned to make a 20m annual operating profit from its London-New York Concorde service.

But even that figure is flattering.

Concorde was foisted on British Airways and Air France by their governments; not a single aircraft was ever commercially sold.

Many airports refused to welcome Concorde, citing noise regulations.

And although Concorde became the transport of choice for a few hundred rock stars and fashion designers, many of the well-heeled were put off by the cramped cabin conditions and sky-high prices.

On Concorde, a return flight across the Atlantic could easily cost 8,000, compared with 3,000 or so in vastly more comfortable first class on a Jumbo Jet.

When Concorde returned to service in 2001 after its Paris crash, it simply failed to convince enough people to fly.

Fast is past

For British Airways, the scrapping of Concorde means some 84m in write-off costs, not a major financial blow, even in these uncertain times.

Airbus A380
The way ahead?
But the implications for the wider aviation industry are far more profound.

Concorde may prove to be not only the world's only supersonic commercial aircraft, but also its last.

Over the past couple of years, a host of supersonic projects have foundered.

Boeing pulled the plug on its Sonic Cruiser project in December; a prototype from Japan's National Aeronautics Laboratory failed in a test flight last July; a $20bn French project to develop a mach-2 jet seems to have been mothballed.

The most ambitious project, an orbiting aircraft on the drawing board at Nasa, may be throttled by the agency's current Space Shuttle worries.

A different sort of super

Aerospace fashion swings aside, it's not hard to see why.

Engineering difficulties, still unresolved despite Concorde, make developing a viable supersonic passenger jet a $30bn-plus dream.

Now, airlines are switching their focus from supersonic to so-called super-efficient aircraft - planes capable of carrying passengers as cheaply, not as quickly, as possible.

Airbus' A380 super-jumbo, a whopping aircraft that seems to be selling tolerably well, is the first of this breed; Boeing is developing a smaller super-efficient model that will look something like its current 767.

As for the last Concordes, those former symbols of the white heat of European technology, British Airways plans to donate them to museums.




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