The Flying White Elephant

On February 4 Secretary of Transportation William Coleman granted temporary permission for the Concorde supersonic transport to land at New York and Washington, DC. Coleman's decision capped months of heated controversy, in which both sides distorted facts and made emotional appeals. Many news media have attempted to frame the issue as one pitting advocates of "technology for technology's sake" against opponents of technology. Such a framework seriously obscures the real issues at stake in the Concorde case. Far from being a case of pro- versus anti-technology, Concorde represents an enlightening example of government (and its big business allies) versus taxpayers and homeowners.

Make no mistake about it: Concorde is in no sense a product of commercial (i.e. capitalist) enterprise. From start to finish it is a government project, and one of the 20th century's biggest boondoggles, at that. Conceived in a fit of nationalism by officials of state-owned British Aircraft Corporation (BAC) and Aerospatiale (SNIAS), Concorde was an attempt to recapture from American firms the lead in commercial aircraft sales. Under the terms of a British-French treaty signed in the early 1960's, taxpayers of the two countries were soaked for $3 billion in research and development costs over a 12-year period. The net result of this lengthy development time is a plane that embodies 1960's technology in 1976's market—in particular, very noisy, fuel-gulping turbojet engines; a tiny, cramped fuselage; and extremely marginal fuel capacity. (The Concorde is just barely able to make the westbound Paris-New York run for which it was designed; on its initial route from Bahrain to London, it can carry only 70 of its intended 100 passengers due to headwinds and hot weather takeoff conditions.)

Because the plane is such a marginal design, British and French taxpayers are being ripped off once again. State-owned British Airways and Air France (the Concorde's only purchasers) are receiving millions of dollars in operating subsidies so that they can hold the fare to 20 percent over normal first-class, while providing a variety of expensive frills (fancy stewardess uniforms, special buses for Concorde passengers, exclusive gate and baggage areas, etc.). Not only that, but in a so-far fruitless effort to obtain additional buyers, BAC and SNIAS are keeping the selling price of the Concorde at $100 million each, despite a production cost of about $156 million per plane (if all 16 of the current run are sold; so far only nine have been). Thus, the taxpayers will have to cough up close to a billion dollars to subsidize the plane's production, on top of the $3 billion already spent on R&D. If the R&D costs and production subsidy were included in the sales price, each of the 16 Concordes would retail for about $344 million (compared with about $21 million for a 747). And opposing this kind of boondoggle is equated with opposing technology!

Apart from its absurd economics, Concorde has been faulted for a number of other issues, many of them red herrings. Some wild charges were made that nitrous oxides from Concorde operations would partially destroy the ozone layer—a charge discounted by the World Meteorological Organization in January, at least for a fleet of 30 to 50 aircraft. In addition, physicist Hugh Ellsaesser of Lawrence Livermore Laboratory has pointed out that from 1957 to 1970 the large increase in military supersonic aircraft and missile flights did not harm the ozone layer (which actually increased during that period). Other environmentalists pointed out that Concorde burns two to three times as much fuel per seat mile as subsonic planes—a true but largely irrelevant charge (so long as the higher fuel cost is reflected in the fares, which it partially is). Some air traffic controllers raised safety objections, charging that Concorde's marginal fuel reserves may require special handling procedures in approach and landing patterns—a real possibility but not a crucial failing.

By far the most important environmental objection is the Concorde's noise levels. The sonic boom issue was resolved years ago by national bans on supersonic flight over most of the world's populated areas (which reduced Concorde's projected market from 400 to 45—a change which would have caused any private manufacturer to cancel the project). Today's noise problem concerns landings and takeoffs. With its 1960-era turbojets, a Concorde takeoff is twice as noisy as those of older 707's and DC-8's and up to six times as noisy as those of newer DC-10's and 747's. Thus, Concorde would impose its noise on large numbers of people who today are beyond the noise contours of the airports it serves, reducing the value of their property and leading to lawsuits demanding compensation.

Given all of the foregoing, what would libertarian principles suggest as appropriate public policy? There are two issues involved: noise and government subsidy. On the noise issue, each airport operator (i.e. owner, in a free society) ought to make the decision regarding Concorde service based on the costs involved in compensating affected neighbors. If the airport property extended beyond the maximum harmful noise contours, or if suitable agreements with all affected neighbors could be reached, service would be approved (and landing fees—not taxes—would be set high enough to cover the extra compensation costs). In the absence of such conditions, Concorde service is not permissible, however much some desire it.

The subsidy issue is more complicated. U.S. airline companies protest that it is unfair for them to compete against a plane that is built, purchased, and operated with foreign government subsidies, and therefore attracting passengers via significantly below-market fares. Although these same airlines receive U.S. government protection from competition on domestic routes and subsidized air traffic control service, they nonetheless have a point. A similar question arises in cases such as foreign steel or textiles produced with government subsidy for sale in competition with unsubsidized American products. In each case the product is produced at the expense of foreign taxpayers—in short, by means of forced labor. But does this coercion justify U.S. government action to prevent Americans from buying such "tainted" products? Clearly not. Ultimately, each individual must decide the morality of purchasing such goods and services.

The fate of the Concorde, then, should ultimately rest in the hands of airport neighbors. If the legal system requires the full costs of Concorde's noise impact to be paid by its operators, this technological white elephant is not likely to serve U.S. airports.