Concorde's Uncertain Future: High-Maintenance Cost vs. High-End Corporate Appeal

Strategic Insights -

Despite its lucrative appeal to high-end corporate travelers, the Concorde's high maintenance costs, daunting fuel bills, and limited passenger space have raised questions about its profitability. Analysts say its loss would divert these customers to other airlines or corporate jet travel, yet its revenue accounts for only 1-2% of the total at Air France and slightly more at British Airways. With talks of the Concorde's usefulness waning and no other supersonic jetliners in development, the airlines are caught between its unique appeal and financial burden.

Key Takeaways:

  • The Concorde's revenue accounts for only 1-2% of Air France's total revenue and slightly more for British Airways.
  • The plane's high maintenance costs, with up to 57 hours of maintenance for every hour in the air, are significantly higher than subsonic aircraft.
  • The Concorde burns about 4,670 gallons of kerosene for every hour of flight, compared to 2,340 gallons for the Boeing 747-400.
  • Despite its fuel-guzzling habits, the Concorde is able to draw large numbers of first-class and business-class travelers, who pay high premiums.
  • British Airways has capitalized on increased traffic between Wall Street and the City, London's financial district, using the Concorde to lure the "Goldman Sachs crowd."
  • A further inducement to premium travelers has been the Concorde service's preferential treatment of passengers that expedites them through customs, passport control, and baggage checking.
  • Analysts believe that many would shift to corporate jets or desert British Airways and Air France if the Concorde were to be permanently grounded.

Statistics:

  • The Concorde burns about 4,670 gallons of kerosene for every hour of flight [1].
  • The plane's revenue accounts for 1-2% of Air France's total revenue [2].
  • The Concorde requires up to 57 hours of maintenance for every hour in the air [3].
  • The Boeing 747-400 consumes 2,340 gallons of kerosene for every hour of flight [4].
  • British Airways has seven Concordes in operation [5].
  • The Concorde's cockpit crew consists of three instead of two, adding to its maintenance costs.

Sources:

  • [1] Bankers Trust analyst quoted in the article as saying the Concorde burns 4,670 gallons of kerosene per hour.
  • [2] Analysts' estimate of the Concorde's revenue as 1-2% of Air France's total revenue.
  • [3] British Airways' maintenance record for the Concorde.
  • [4] Fuel consumption of the Boeing 747-400.
  • [5] Number of Concordes in operation at British Airways.