BA0197

Discounting the first few years of operation, Concorde always made a profit for BA (I recall a figure of £60m for 1999, but don't quote me on that).

In fact during a rejig of pricing, a BA Concorde captain was put in charge to turn around Concorde's losses. He surveyed pax and found they thought they had paid more for their flights than they actually did (the result of PA's booking their flights for them). As a result, BA set the prices to what people actually thought they were paying and voila, BA made flying on the pointy supersonic aircraft profitable!

headingwest

I wanted to fly with oneworld to Florida in May, and could have paid about 686+ EUR for VIE-LHR-DFW-VPS return. When I added the BTS sector the price went down to about 632 EUR (I live in Bratislava). Taking out the DFW-VPS sector drops the price to 403 EUR, and then I booked it as reward flights. Adding the additional 4 flights increased the price by 17 EUR, plus lots of additional TP's and Avios. Hence an interesting itinerary with an evening on Miami Beach followed by a second day of flying to get to Valparaiso, Florida. Net gain 23,321 Avios + 165 Tier Points. I really love flying and in economy doesn't bother me in the slightest. Maybe I will change my mind after this excursion, particularly as it follows my first First/Club World trip in April.

Going back to the point about loss making, this booking must be taking a loss. Especially when you take into consideration that I will have Gold status and will be visiting the lounges 10 times along the way! I really don't know how they can afford to sell bookings like this.

muishkin

See my modified post. I am not certain but I don't think BA paid a single cent to cover the massive development cost of the Concorde.

I know for sure Air France and Braniff never made it profitable. Too bad though, I would have loved to fly in the Concorde but my parents refused to take me on it.

Calum

It's switching on March 29th. I'm really looking forward to it and hope it helps the route. What are the loads like in Y and W?

BA0197

Taken from a Concorde Admiration site:

Claims in the Meida that BA paid £1.00 for the Concorde fleet or that it was given in trust are wrong.
British Airways predecessors (BOAC) paid the manufacturers more than £155 million for the Concorde fleet and over the following 27 years of operation British Airways has invested more than £1 billion on the aircraft. The Concorde book value was written down to nil in 1979, by the then labour governmanet, and subsequent capital investments in the Concorde programme to 1983 were also written off to nil.

In March 1984 the government ended its involvement with Concorde when British Airways assumed full responsibility for Concorde support costs. The British Airways Board paid £16.5 million to acquire the government’s stock of spare parts and was released from the profit share scheme under which the government collected 80 percent of Concorde operating surpluses. Within this agreement BA aquired the 2 Concordes that had been placed at its disposal in 1980 for a book value of £1 withing the £16.5M sum.

Also:

How much profit did Concorde make for British Airways?

On average Concorde made and operating profit of £30-50 Million a year for British Airways in the boom years where many passengers were travelling first class. British Airways reportedly received £1.75 Billion in revenue for Concorde services against an operating cost of around £1 Billion. Air France made a much smaller profit.

Gold77

So if I follow this correctly, excluding the spare parts bit:
Operating revenue over the years: £1.75bn
Operating costs over the years: £1bn
Capital expenditure initially: £155mm
Capital expenditure follow-on: £1bn
--> Net cash flow loss over lifetime of Concorde for BA across ownerships: £405mm.

But priceless in terms of image and marketing...

HIDDY

I doubt if they'll be in any rush to fly EDI-IBZ again.

LDNConsultant

I think it does have peaks and troughs - when you go during major Korean holidays (i.e. Chuseok or Korean New Year) the load is quite heavy in Y and W (around 80%) the last couple times I flew that route. However, the last couple times in off season, the load in Y, W and J have been very light around 40-50%. The upgrade at the airport from W to J for BA 18 was very good at actually.

Prospero

Chatting to AA cabin crew the other month on board a SFO-JFK flight I learned the A321T has proved very popular with AA crews (IFE issues aside) and financially is working very well for AA. Evidently, operating costs theoretically break even with 2 full fare occupants in F and 8 in J and in practice is proving very successful for the airline. Something to think about on your next trip to HNL

destere

It wasn't BA's job to pay back. That was BAC & Aérospatiale's job to sell aircraft to airlines. I think what you're talking about goes way beyond the remit of this thread!

As far as the books are concerned BA made a profit from it - even if the government helped 'cut corners' during the early days.

Sixth Freedom

I disagree!

BAH-DOH-BAH is often surprisingly full in economy, especially at the weekend. Also, the operating costs will be tiny.

When we rolled out MXP<>NCE at QR there were only ten or so passengers required to cover costs, given that the aircraft was at MXP anyway.

Behindthecurtain

Are there not routes that BA fly that are unprofitable but subsidised by cities/countries? I'm sure I saw something on a few BA routes in the press a while back

ShadowCaptain

I believe originally the deal was BA didn't own the Concorde but instead had to pay 80% of profit to the government. They made a loss.

Then in the 80s bought the planes outright, then hiked the costs up and started turning a profit.

Make what you will of that!

BA0197

Y pax are, as I'm sure you know, not very high yielding. Combining this, with the massive operating coasts of a 772 for such a short-haul route (these large aircraft are extraordinarily uneconomic for short routes), I think I'll stick with my guess (but that's all it is!)

I'm sure BA can support a 788 flight to BAH and a 788 (or indeed 772) to DOH direct to LHR. For the life of me, I cannot figure out why this has not been implemented.

ShadowCaptain

I've read on this forum elsewhere that the LCY-JFK service is subsidized by some big financial firms in the city.