Supersonic Profits?

Whatever happened to the Concorde?

Photo: Steve Fitzgerald. Source: Wikipedia

The Concorde was a grand experiment. Supersonic flight had proven practical and useful for military purposes. Why not extend the application for civilian use? Jet aircraft made it practical to cross the continent or an ocean in a single day. Cutting that time down to a few hours could be equally transformative, it was thought.

Only it didn’t work out that way. The aircraft were expensive to develop and maintain; only a few dozen were ever made. The $12,000 tickets barely covered the cost of the fuel, and the seats were cramped. Even with narrow seating, the airplanes could only hold about 100 passengers. The planes burned up so much fuel that trans-Pacific flights were out of range. British Airways and Air France lost so much money on the service that it was discontinued in 2003 – 30 years of “supersonic service.”

There’s a movement now to revive supersonic passengernjets, with imaginative designs proposed, some for hundreds of passengers, some for just a few dozen. There’s no doubt that a few ultra-wealthy individuals could afford globe-spanning, ultra-fast travel. And the technology is well established. But affordable supersonic travel is unlikely to become commonplace.

Aeron Corp AS2 Design. Source: Aeron Press Center

It’s often the case that new technologies get cheaper over time, as engineering improves the science advances. But not this time. The Concorde was beautiful, in its day, with its elegant delta wing and a “droop snoot” to facilitate landing. But beautiful isn’t always practical. Or profitable.

Douglas R. Tengdin, CFA

By |2017-11-01T07:54:34-04:00November 1st, 2017|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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