What is the future of Concorde? How did it performed since it's
inception? Why is it scrapped though it is a tech advanced plane? What
is the strategy of BA and AirFrance in running them? Why is Virgin's
Richard Branson after Concorde?

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Clarification of Question by mskonda-ga on 22 Aug 2003 11:35 PDT

I understand that the Plane is not Advanced, although it was called as
an Engineer's Delight. My main consideration is to know how did it
performed all these three decades - It looks like that BA or AF did
not have(to my knowledge)any seperate accounts for supersonic and
subsonic aircrafts. I would like to know the financial perf of
concorde since its inception. If BA didn't make any profits (after
writing off the initial investments), how can it could have maintained
till now? Or if it made any profits (obviously it wouldn't be
scrapped), why is it bothered to take off the shelf? Is there any
Strategy with which BA worked all the while or no strategy at all??
Why did not BA classified fares like first class and economical on
Concorde? Is really saving time for executives(with 5 or 10 times
costlier tickets) a good cause to fly Concorde?

Mskonda --

The economics of the Concorde have been marginal since its first
flight  in March, 1969.  The development started in 1962, with France
and Great Britain planning to spend $448 million or $28 million per
year, divided evenly.  However, by the time the program was finished,
costs had risen to $2 billion.  Only 20 aircraft were ever built and
only 14 put in service -- 7 each with British Airways and Air France
(the others were prototype and test aircraft).
U.S. Centennial of Flight Commission
"The Concorde Supersonic Transport"
http://www.centennialofflight.gov/essay/Aerospace/Concorde/Aero53.htm

The SSTs (supersonic transports) were put into service in 1976 but
faced high operating costs, especially when compared with the other
aircraft used for international transport -- the Boeing 747.

*  Fuel costs for the Concorde have been equal to or higher than the
Boeing 747.  This article on a Concorde devotee's website notes that
Concorde fuel costs were 33% of its direct or variable operating
costs:
Concorde SST
"Concorde B Model" 
http://www.concordesst.com/concordeb.html

At best, the Concorde uses the same amount of fuel as an early model
Boeing 747.  A May 18, 2003 article in the New York Times notes that
it uses twice as much fuel as a 747, though the comparison is to the
more-efficient Boeing 747-400.

*  Passenger loads are smaller than the competing aircraft.  Boeing's
747 now carries 400 passengers; the Concord was originally designed
for 128 people
but often configured for only 100, as passengers carried more baggage
than planned.  In the version of the aircraft in use the past two
years (with better fuel tank protection), Air France's
Paris-Washington, DC flight only has 92 seats.  And on some vacation
routes such as Bermuda, baggage requirements would restrict passenger
loads to 80 people, according to the Concorde SST site:
Greg Goebel/In the Public Domain
"The Rise and Fall of the SST"
http://www.vectorsite.net/avsst.html

Thus, fuel costs per passenger mile would be 5-10 times that of the
Boeing 747.

• Other operating costs were higher too, particularly because the
Concorde required a 3-person crew (2 pilots + flight engineer), while
the more modern Boeing designs are all for 2 pilots.  The cost of a
flight engineer would add more than $500,000 per year to aircraft
operating costs.

* Though now fully-depreciated after 26+ years of service, there is
high cost to maintain aging airframes and engines.  In April, Aviation
Week & Space Technology reported that British Airways had looked at
the cost of airframe updates to allow Concorde to fly another 10
years, then decided to cancel the program:
Aviation Week & Space Technology
"Concorde's Beauty, Grace and Speed to Cease this Fall" (April 13,
2003)
http://www.aviationnow.com/avnow/search/autosuggest.jsp?docid=37900&url=http%3A%2F%2Fwww.aviationnow.com%2Favnow%2Fnews%2Fchannel_awst_story.jsp%3Fview%3Dstory%26id%3Dnews%2F04143air.xml

Already, the aircraft was suffering from low usage and high
engineering and maintenance costs, partly due to the 15-month
suspension of service from July, 2000 to November, 2001 -- following
the Paris crash.  According to British Airways (NYSE: BAB)  annual
report, 5 Concordes produced only 1.63 hours of revenue per day -- 25%
of its WORST other aircraft.  Also, the planes averaged 26.3 years or
more than twice the age of the average plane in the fleet.  (Note that
2 Concordes have already been put into retirement.)
British Airways annual report:
SEC Edgar database
"British Aiways PLC" (Form 20F, for year ended March 31, 2003)

The same annual report notes that the decision to halt Concorde
service "was made for commercial and operational reasons with
passenger revenue falling steadily against a backdrop of rising
maintenance costs for the aircraft."  The annual report also notes
that Airbus, the aircraft manufacturer said that technical support for
Concorde was no longer economically viable.

The level of write-offs -- $132 million for British Airways in
combined engineering and depreciation costs -- indicate that the 5
remaining airplanes were consuming at least $20 million per year in
on-going technical support.

•  Passenger loads needed to be extraordinarily high for profitability
-- but they had been shrinking.  When British Airways resumed flying
after the Paris crash, they noted that passenger loads were 75% to the
U.S. and 65% to the U.K. and that at those loads, profitability was
nearing.  However, as Aviation Daily reported in June, loads this year
have been about 45%:
Aviation Daily
"Concorde's Losses Augur Against Successor" (June 13, 2003)
http://www.aviationnow.com/avnow/search/autosuggest.jsp?docid=38113&url=http%3A%2F%2Fwww.aviationnow.com%2Favnow%2Fnews%2Fchannel_aviationdaily_story.jsp%3Fview%3Dstory%26id%3Dnews%2Fcon06133.xml

Aviation Daily
"Aviation Daily: BA Counting On Profits From Restarted Concorde
Flights" (Nov. 11, 2001)
http://www.aviationnow.com/avnow/search/autosuggest.jsp?docid=3397&url=http%3A%2F%2Fwww.aviationnow.com%2Favnow%2Fnews%2Fchannel_maint.jsp%3Fview%3Dstory%26id%3Dnews%2Frsst1112.xml

*  All of these financial assumptions don't show how much innovation
has gone on in commercial aircraft since the Concorde was designed in
the mid-1960s.  The New York Times, in its May 18, 2003 article
describes what has happened in an article titled "Advanced in
Airplanes are Mostly Invisible."  However, there are several
passenger-related enhancements, including more space and electronic
entertainment centers.


OTHER SCENARIOS
-----------------

There's a very interesting thesis written by Yorgos Saounatsos that
treats the economics of building and operating an SST.  Saounatsos
notes that a minimum of 600 -- but probably more like 1,000 -- of the
aircraft would need be built.  He also has a variety of assumptions on
the premium necessary on ticket prices.
Forthnet
"Commercial Viability of the Next Generation of High-speed Civil
Transport" (Yorgos E. Saounatsos, 1996)
http://users.forthnet.gr/ath/gs/thesis.htm


Google search strategy:
When doing a search for the Concorde, you'll want to do a compound
search using one or more of the following terms in order to eliminate
references to a popular Chrysler car:
Concorde + SST + economics

I knew in advance that the best sources of information on the
economics of running the Concorde would be Aviation Week & Space
Technology, the magazine of the aerospace industry, and the Wall
Street Journal.

The Wall Street Journal articles are available for a fee on-line but
are also accessible via Infotrac at some libraries.  Some libraries
also have older Wall Street Journal issues in microfilm.  There's an
early article that notes flights are unprofitable in the WSJ, though I
wasn't able to get a copy:
"End of the Boom?  Closed Assembly Lines for Concorde Signal Halt in
Supersonic Era; Aerospace Experts Don't See a New Commercial SST for
Decades at Least; Flying Full Losing Millions" (June Kronholz, Jan.
16, 1980)

A final note: for more detail see the bibliography on the first
reference in this Google Answer -- it's excellent, though several of
the books are out-of-print.

I'm not sure that any comments are necessary on Branson's strategy. 
It's clear that without the support of Airbus, it will be difficult
for him to succeed.

Best regards,

Omnivorous-GA

---

Clarification of Answer by omnivorous-ga on 02 Sep 2003 16:28 PDT

Mskonda --

Thanks so much for the rating and the extra sum.

Your citation can simply be for Omnivorous-GA, Google Answers
reseearcher.

I'm glad you found the information useful.  I somehow forgot to
include comments from friends who have flown the Concorde: that it was
cramped and noisy, but an incredible experience in high altitude
flight.  "The sky is black," notes a friend.

Best regards,

Omnivorous-GA

Excellent - Thanks for your direction. It had given a different
outlook for research work I was doing. Well done and I am pleased with
your answer. If you could send me your name and details, I would like
to acknowledge in my work, please.

I would like to make clear that the "Concorde" is not an advanced
high-tech airplane. It once was, but now, in fact, it is nothing but a
horribly outdated veteran of the skies.

Scriptor

It was not very practical, more of a prestige thing. It was rather
cramped inside and with low headroom. The fares were also horribly
expensive. It was also reaching the end of its useful life with no
prospect of a replacement.

It did have an impressive safety record until the Paris disaster and
various hiccups since. These have probably not helped.

Richard Branson does not get everything right but he is very adept at
keeping his and Virgin's name in front of the public.

Maybe it was just a publicity stunt.

I was present at a live interview with Richard Branson earlier this
year (April 2003)when he was asked what his plans/hopes were with
respect to Concorde.

He indicated that he felt that the Concorde was very much a part of
British history and that it shouldn't be relegated to a museum. 
Excerpt quote: "We believe....,that as a private company it would be
worth flying Concorde as a loss leader.  Concorde would help put
Virgin even more on the world map.  It is a great British invention
that should not be put in a museum 15 years before its time".

As probonopublico commented earlier: <<Richard Branson......is very
adept at
keeping his and Virgin's name in front of the public>> and thus it was
no small surprise when, at the end of the interview, the interviewer
presented Branson with a model replica of the Concorde, complete with
Virgin logo on the tailfin.  To the delight of the snapping
photographers, Branson brandished the model over his head whilst
striking a pose.

:) jem-ga

concorde's biggest dissapointment was that it flies at only mach 2.2.
to be financially viable, it needed to fly mach 2.4
(to fly roundtrip over the pacific in one day).

Also thanks to other comments!