Why did the Concorde retire from service?

In 1969, the world’s first SST (Supersonic Transport) passenger airliner took first flight from Toulouse, France and entered service a few years later in 1976. The aircraft was considered one of the safest for travel when considering the passenger to deaths ratio, however, it was retired from service on November 26th, 2003 after 27 years of operation and with only 20 units built.

Interestingly, the life of the Concorde offers theories relevant to the signals of change which were discussed in Clayton Christensen’s; Seeing What’s Next such as catering to non-consumers, to catering to overshot and then undershot customers.

First of all, the making of the Concorde was considered a huge technological step forward, symbolizing the spirit and aspirations of many in Europe who worked hard for years to bring this aircraft to life, while responding to the hopes and dreams of frequent business travelers worldwide. Undoubtedly, the airliner entered the market as a disruptive innovation in terms of speed of travel with no competition in sight – Consider this for a disruptive innovation: The Concorde takes off at 220 knots (250mph) compared with 165 knots for most subsonic aircrafts. It cruises at around 1350mph – about 1 3/4 times the speed of sound and at an altitude of up to 60,000 feet (over 11 miles high). A typical London to New York crossing would take a little less than three and a half hours as opposed to about eight hours for a subsonic flight. When travelling westwards, the five-hour time difference meant Concorde effectively arrived before she left. It comes as no surprise that back then it was widely assumed that this would in turn open up a new market to compete within. But as more and more companies were no longer able to afford expensive business travel in response to increased costs and security measures following the 9/11 events in 2001, many corporations and business travelers turned to alternate options, mainly flying the traditional jets such as the Boeing 747 and 777. This forced the Concorde to compete against far less expensive possibilities and shifted the playing field from being the only competitor in the market catering to undershot customers to a mere opportunity of upmarket sustaining innovation for overshot customers.  

Although British Airways reported significant profits from operating the Concorde in its prime time – approximately 70 million Euros annually back in the 1980s, the Concorde later was deemed unprofitable by both British Airways and Air France due to increased maintenance costs and environmental considerations. Many would argue, however, that the real reason behind retiring the Concorde from service in 2003 was due to non-market factors, namely it’s only crash in Charles De Gaulle International Airport in Paris on April 10th, 2003 bringing to an end the era of supersonic passenger transportation.  Others, including an aviation engineer whom I sat next to during a flight back from Philly this weekend, believe that the Concorde would have remained in operation until this day had the aircraft been manufactured here in the US vs. Aerospatiale; a syndicate of highly bureaucratic/ previously state-owned European companies.

Image Source Page: http://www.tehrantimes.com/index_View.asp?code=213689


1 Comment

  1. […] Ruba (week 3- Christensen **) […]

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