FlightGlobal.com
Home
Premium
Archive
Video
Images
Forum
Atlas
Blogs
Jobs
Shop
RSS
Email Newsletters
You are in:
Home
Aviation History
1974
1974 - 0507.PDF
FLIGHT International, 28 March 1974 389 British Airways' statement on Concorde It is clear that the Concorde statement made today by the Secretary of State for Industry has been dictated primarily by considerations of the development and production costs. These are matters on which British Airways cannot usefully comment. The Secretary of State, however, referred to an estimate by British Airways that the operations of Concorde "could substantially worsen their financial results, possibly by many million of pounds a year." In 1972, before British Airways ordered Concorde, we provided the Government with estimates of the likely effect of Concorde operation on the airline's total financial results according to the outcome of a variety of economic and operating factors that could not be foreseen at that stage. These estimates ranged from an improvement on profitability of £6 million per annum to a worsening of £26 million per annum. same basis could cost between £665 million and £735 mil lion. Whatever does happen to Concorde", calls for a public inquiry into the affair are likely to be increasingly heard in the next few months. No decision taken No decision has yet been taken by the British Govern ment about the future of Concorde, and no date for that decision has been fixed. Mr Anthony Wedgwood Benn, Secretary of State for Industry, made this clear in his statement to the Commons on March 18 and at his press conference afterwards. He stated, however, that the official forecasts of the cost to Britain of all the options:—ranging from immediate cancellation to full-scale production of an improved version—made "pretty grim reading." The data had been available to the previous Government, and to the Public Accounts Committee, but had not been pub lished before. Parliament and public should be made aware of the cost of the choices, he said, and the Government would await reaction before making up its mind. Mr Benn, who was wearing a Concorde tie, noted at the press conference that the situation facing Concorde was "much worse than I imagined" and was very different from the position when he left office in the summer of 1970. At that time there were 76 options, no firm price had been fixed and no production losses were anticipated. "We have opened up the books to look at the various options," added Mr Benn, "and the effect is to remove from Concorde the idea that it will make'a commercial return on investment. Those involved will make up their own minds depending on their point of view." While there are no "villains in the story," many of the problems had been caused by a combination of manufac turers not allowing for technical difficulties and govern ments' concealment of the facts; "the net outcome is an impression of lack of public control which open govern ment would not have allowed to happen." Among the lessons to be learned are "how better to handle these large-scale projects." Before making his statement to the Commons, Mr Benn had been in touch with the new French transport minister, M Olivier Guichard, who had seen the text of the Report. A senior official had been sent to France for discussions and Mr Benn said he intended to see his French opposite number soon. Mr Benn has already had a series of meet ings with trade union officials in Bristol and with execu tives from the British Aircraft Corporation and Rolls-Royce (1971). Mr Benn is MP for Bristol South-East. When the subject of cancellation was raised, the Minis ter said: "The men who make this aircraft are personal friends of mine, and I will not conceal from them that if the project, on which half a generation of skill and craft has been employed, were to fail, in my view it would be a national tragedy. But I still think it was right to publish the facts, because nothing can be held to succeed if its success depends on concealment." Bearing in mind a number of optimistic statements from Unfortunately, the latest estimate of the effect of operating five Concordes is at best towards the most adverse of that range of forecasts. Greatly increased fuel and other costs affecting all British Airways operations and uncertainties of Concorde route permits contribute to this situation. Previously we had believed that, if the effects of Concorde operations proved adverse, they could be absorbed by the profits from our subsonic operations and be dealt with under the terms of the financial arrange ments announced by the Government in the House of Commons on May 25, 1972. These terms still provide an adequate basis for British Airways to continue its Concorde plans, but it is now clear that with the less buoyant world air transport market following the energy crisis, we shall be unable to absorb the adverse effect of Concorde from our subsonic operations' profits. British Airways (and Air France) the suggestion in the Official Report that "British Airways estimates that the operation of Concorde could substantially worsen their financial results, possibly by many millions of pounds a year," prompted a number of questions. Mr Benn pointed out, however, that under this Government responsibility for British Airways rests with Mr Peter Shore, Secretary of State for Trade, rather than himself. The cost of fuel, he suggested, could have influenced British Airways esti mates. Mr Benn refused to be drawn on whether the Concorde was more important than Maplin or the Channel Tunnel. Mr Benn went out of his way to emphasize that he was not anti-Concorde, and pointed out that "I have tried to help Concorde to succeed." The figures he gave were produced by officials in the Department of Industry (no doubt backed up with data from the Treasury) and he said he had not used his influence to have them altered in any way. While they were the most accurate available, and based on the best assumptions, they could he chal lenged and the Secretary for Industry said he would have thought that rather more than 21,000 people were directly employed on Concorde. Details from the Official Report MR BENN'S statement to the Commons was backed up by an official report which gave additional details of the state of the Concorde project. Most of the financial information made available by Mr Benn had not been published before, although it was made available to the Public Accounts Committee last year. In the Public Accounts report, how ever, cost estimates were replaced by asterisks before publication. The latest Official Report says that the manu facturers (BAC, Aerospatiale, Rolls-Royce (1971) and Snecma) expect to receive a certificate of airworthiness between June and August 1975, but Ministry officiatls consider that it would be more prudent to assume that certification will not take place until 1976. Supersonic overland corridors for services to Tokyo and Sydney have still to be arranged over the Soviet Union, the Middle East, India, Indonesia and Australia, but no objections in principle have been voiced. A one-stop service to South Africa, the report continues, is not possible because no suitable runway exists. The Department of Industry believes that Concorde supports up to 21,000 jobs; 9,000 of these are in Bristol, some 3,500 in Weybridge and the rest distributed among subcontractors and materials suppliers throughout the country.' An outline of the manufacturers' proposals, which could reduce noise and increase range (see Flight for February 28, page 259), is included. The manufacturers consider that plans for extra fuel tanks, some weight-saving modifica tions, an improved engine and improved wing design (the Concorde model B) should be pursued. These changes
Sign up to
Flight Digital Magazine
Flight Print Magazine
Airline Business Magazine
E-newsletters
RSS
Events
