Monday, October 27, 2003

Thoughts on the Retiring of Concorde

It was with some sadness that I followed the news of Concorde’s last commercial flight. I remember as a small boy in the early 1970’s being taken to Prestwick International Airport to see the first one. It is one of my earlier memories. Concorde isn’t an aircraft - it is an icon. Concorde is the quintessential essence of London and the crown jewels of the national flag carrier, British Airways. You cannot arrive at London’s Heathrow Airport without seeing the 1:5 scale model. You cannot avoid the souvenirs of London and Britain which carry its image. Apparently the French had something to do with it. But its wings and engines were British - what else is left? The drooping nose, perhaps. The main contribution from the French was to leak the blue prints to the Russians resulting in the TU-144.

In the days when America was putting men on the moon, the world’s only supersonic passenger aircraft was British - and that was something small boys could be proud of - something inspiring. That’s what makes Concorde an icon of Britishness in the latter 20th Century.

So why is it gone and not replaced? Why are slow, fat, large, ugly aircraft all the rage?

Simply put - for most passengers, the vast majority in fact - time is not the constraint. It makes more sense to go slower and save money. For businesses this reduces costs. Reduced costs go straight to the bottom line. Faster speed would only be worth it if it increased throughput. This would only be true when the passenger is a constraint (or works within one) of a business. Most businesses just blindly save costs with corporate travel. Most businesses also have no idea where their constraints on increased throughput lie. The result is that saving costs blindly does make sense. The chance that the constraint will be impacted is slim. However, when a constraint’s capacity is reduced through slow travel, there will be a loss in throughput for the business.

Why is this not much of an issue in the early 21st century? As the IBM advertisement used to say “Show me the flying cars! They promised us flying cars!” and then explained that we don’t need them because we have the Internet. So there is no need for a supersonic jet airliner in the 21st Century, then? I think that is a hasty conclusion.

Some market research, TOC-style! Who would want to justify the costs of flying supersonic? Someone who is a constraint on throughput? Who are such people? Celebrities for the most part. There is only one Ewan MacGregor. If you booked Ewan MacGregor then only the physical presence of the man will suffice. There is no substitute available. If a celebrity such as Ewan MacGregor wants to maximize his revenue generating potential then he needs to get places fast. So it is no surprise then that before the tragic accident, Concorde was very popular with the showbiz glitterati.

So would there be a market for a replacement? If a plane could be built cheaply enough and a limited number made for routes such as New York - London, Los Angeles - London, Los Angeles - Tokyo, then it is just possible that there might be. The Economist thinks that there are alternatives such as private jets - more flexible substitute products. They are not so fast in the air but the total door-to-door time is comparable with Concorde.

And therein lies the lesson - the time spent in the air is not the system constraint! The goal for a celebrity is door-to-door transport in the shortest possible time. Spending billions to shorten the time in the air may not be the best use of funds. There may be better ROI from reducing the time spent getting to, from and through airports and providing flexible flights in small private jets from quiet private airfields.

Britain continues to lead the world in fast cars - almost all racing cars are made in Britain, even the ones which go around in circles in the United States - and it iconified the fast passenger aircraft. Why couldn’t it brand itself as “fast” Britannia, and niche market its products as fast, good and expensive? Britain needs something to be proud of! The Millennium Dome just didn’t hack it. A new Concorde project might be the thing - something around which people could rally - something to be proud of - something to print on all the tourist souvenirs for a new century. However, the economics just don’t seem to be there. Building a new Concorde appears to be a poor use of funds - even when the derivative effects of inspired little boys who grow up to be productive in other ways, are fully taken into account.

Bottom line - when you’re not the constraint, you don’t get the investment! Sorry Concorde! I will miss you.

[Thanks to Daniel Vacanti for suggesting this topic]