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Wednesday, 16 August, 2000, 10:47 GMT 11:47 UK
Concorde blow to BA
British Airway's tailfin
The Concorde suspension is the latest blow to BA
British Airway's decision to ground its Concorde flights is unlikely to hit the airline hard financially.

The airline has declined to say how much the flights on Concorde contribute to its annual earnings.

Estimates are that BA receives between 150m and 200m from Concorde flights, less than 2% of the 8.9bn in turnover it has each year.

But even if BA can withstand the blow dealt by the loss of its Concorde revenues, their suspension cannot but sully the reputation of an airline already struggling to maintain its competitive edge and attract more high-paying customers.

Ticket to fly

BA flies a Concorde to New York and back daily, each carrying 100 passengers. Each return ticket across the Atlantic costs 6,600. On top of this, it makes money from specifically chartered flights.

BA's hope will be that passengers who would have opted for Concorde will take the next most luxurious option that BA offers. A return first class flight to New York travelling in August costs 5874.

But while BA and Air France were the only airlines offering flights on Concorde, competition for luxury transatlantic flight is fierce and there is no guarantee that those customers will choose BA.

BA's recovery strategy has been based on the idea of increasing the proportion of its passengers from the more lucrative first and business class services - so the loss of Concorde could damage its broader objective.

While BA provides few details of the cost of running Concorde, Air France has indicated that the cost of servicing Concorde absorbs a lot of the potential profit.

The cost of maintaining the supersonic airliner was growing prohibitive anyway, Air France has said.

Huge servicing costs meant the plane contributed only 10 to 20 million French francs ($1.4m to $2.8m, 1m to 2m)) to Air France's overall profit of 2.3 billion francs ($318m, 230m) last year.

The cost of improving the airline to ensure safety might also prove more than Concorde's profitability justified.

"You don't have to change much on an aeroplane to run into a lot of costs," Malcolm English, aerospace engineer and editor of Air International, said.

Troubled times at BA

The suspension of the Concorde flights is the latest blow to BA.

Greater competition on North Atlantic routes, higher fuel costs and competition from low-cost carriers has already hit BA hard.

Last year the airline lost 244m before one-off items.

In recent weeks, BA has claimed signs of revival as it said improved staff morale and a focus on high paying passengers were beginning to pay-off.

The airline reported an 8m pre-tax profit in the three months to the end of June, excluding a one-off 58m loss.

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07 Aug 00 | Business
British Airways seeks revival
11 Jul 00 | Business
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