International Project Management

Question: What strategic threats and opportunities existed in the context of the Concorde Airlines? Answer: Introduction Both the Air France and the British Airways decided to discontinue the services of Concorde in 2003. The Concorde fleets were reduced into aviation museums globally. The Sud Aviation in France and the BAC Aviation in Britain signed an agreement in 1959 that show the development of Concorde Airlines (Clarke Gibson, 1976, p. 56). The decision to close its operations were arrived at after several problems were experienced. Some of the issues that were experienced by pilots while flying the concords were; a) high level of noises; b) safety issues based on the crashing of Air France Concorde in 2000, high level of fuel consumption, and the advanced age of the fleets. The last fleet of Concorde landed at the Heathrow on 24th October 2003 bringing the supersonic aviation era to an end (Trubshaw Lowe, 2000, p. 117). This case study examines the challenges that hindered the success of Concorde commercial airlines despite the superior technicality that came with it. Lastly, the study examine s the factors that can be used in determining the success of an aircraft. Key Issues Examined in the Case There two main issues being examined in the case of Concorde. First, examining the issues that faced the operation of Concorde aircraft amid its technical superiority. And second, to establish the relationship that exists between feasibility study and the success of any project and if the former automatically guarantee the latter (Clarke Gibson, 1976, p. 101). The Concorde's Experience Customers who had fled the Concorde to be a thrilling and unique experience. One reason was that the Concorde would fly as a greater height compared to subsonic jets. The Concorde could take the customers to the heights where only the astronauts and military had reached before. Another aspect that Concorde came with was the speed. At high speed, the customers arrive at their destination twice as fast as the subsonic aircraft could. We can say that the aircraft had the best technical superiority that had not been witnessed before (Simons, 2012, p. 99). The Problems that Faced Concorde First, amid its popularity in the market, Concorde could not sustain the demands of the market. A major reason why the aircraft could not be sustained was the high prices charged for its tickets. The prices charged on the tickets narrowed the market segment that could be served by the aircraft; it was a product for the rich and not for the commoners. One had to spend between $5000 and $8000 to fly between New York and London using Concorde. However, the same amount would be used to pay for ten trips using subsonic aircraft between the two places (Simons, 2012, p. 105). Second, analysts considered Concorde to be a thirsty fuel aircraft. It was designed during a period (the 1960s) when the global decline of fuel supply had not become an issue. However, during the 1970s oil-producing countries in the Middle East faced a lot of production tension leading to a shortage in oil supply (Dutta, 2003, p. 92). Fuel restrictions and shortages hit the western countries real hard which made them realize the importance of considering fuel supply and consumption when designing an aircraft. The oil crisis witnessed during the period made it hard to maintain the aircraft forcing the developers to rethink. Faced with the oil crisis, Concorde's operations were severely affected. The number of the expected per trip reduced from sixteen to four and lastly two because the prices of the tickets were raised to maintain high operating expenses (Owen, 1997, p. 20). Third, the research on the development of Concorde aircraft was done in haste. The understanding of the compressibility technique and how it would affect the aircraft was still at an infancy level. This was a major blow to the sustainability of a project that had been deemed to be a national pride in Britain (Glancey, 2015, p. 67). Fourth, issues of safety and age concerns also impacted Concorde's sustainability in the aviation industry. In the 2000s, Concorde had become undeniably outdated. At its conception, the aircraft enjoyed monopoly within its market segment. However, with technological and economic pressure, new sustainable airlines were introduced in the market segment. They were computerized and economized beating Concorde which still had analogue features in its cockpit (Orlebar Marshall, 2004, p. 89). The Beginning of the End On 25th July 2000, the Air France Flight 4590 crashed shortly after taking off from Paris airport heading to New York. Tire bursting caused the crash during the take-off leading to the piercing of the engine under the left wing. The aircraft was set on fire leading to engine failure. With an insufficient thrust to fly the plane, it veered towards the left and crashed after losing attitude (Glassman, 2005, p. 71). The crash led to the death of 113 people, i.e. 100 passengers, nine members of the crew on board and four people on the ground. Even though Concorde was not the first aircraft to ever crash, its crash came with grave consequences based on its design flaws (Hirschey, 2009, p. 46). The operations of Concorde were stopped for one year until all the safety requirement had been met. During the period, the developers were required to conduct an extensive test on the design flaws that had been experienced (Orlebar, 2011, p. 54). Shortly after the airline had resumed its operations in 2001, the first flight was forced to land abruptly after the WTC attacks. The hopes of Concorde coming back into operations quashed after the Aerospatiale mantle refused to fund the manufacture and maintenance of the spare parts. In 2003 9 (April), made an official announcement that it would wind up the operations during the year (Kelly Meredith, 2005, p. 98). Some of the reasons that prompted the fallout of Concorde from the aviation industry were; Design flaws Rising cost of maintenance and manufacturing spare parts The low number of passengers which resulted from high prices of the tickets and the 2000 crash. The airline was not paying back the expenses that had been incurred in safety modification, maintenance, and other system upgrades. Critical Analysis The Concorde airlines were pride to both the BAC and the Sud. If all the project steps had been done extensively by carrying adequate feasibility study, the fallout would have been avoided. However, the two companies were in haste to launch the airline in the market. From the analysis, people were ready to pay the high prices of a ticket just to enjoy the services of Concorde for example, traveling at a faster speed than the subsonic aircraft. However, the number of the customers who could afford such services were few (Glassman, 2005, p. 91). The amount of revenue collected from the operations could not maintain the airline. If extensive research had been conducted, Concorde would have economic to expand the potential market. The same issue of poor planning is witnessed with the failure to address the fuel consumption during the design process. The developer had not anticipated that oil crisis in the future could have affected the Concorde operations (British Airways, 2003). Likewise, it would be important to recommend the efforts of the developers amid design flaws. Before the first crash, Concorde had had smooth operations apart from financial constraints. It should be recognized that design/ technological advancement alone could be used to anticipate the success of the product (Hirschey, 2009, p. 53). Financial/ accounting criteria were to be assessed as well to determine the profitability level of the project. Other studies such as budgetary control and planning, market research, financing requirements and cost assessment should be conducted even before the commencement of development phase. In the case of Concorde, the developer failed to carry out a feasibility study to determine the financial implications of the project even if it enjoyed the latest technology regarding design and engineering. Therefore, I conclude that there is a connection between feasibility study and the success of any project. According to project analysts, Concorde is a good example of an exclusive service faced with a limited potential/ target market. Concorde was technologically superior as compared to other airlines in the market during the time but, it was too much ahead of the time. They maintained that the targeted market was not ready for a product like Concorde. In short, Concorde failed not because of inferiority but because it failed to take the market needs into consideration before being launched in the market (Clarke Gibson, 1976, p. 84). Conclusion The fallout of Concorde marked a major blow to the aviation industry. The project failed because commercial supersonic services offered by the Concorde were way beyond the market needs. Only a small number of the targeted customers could afford the expensive service while most of the customers were willing to use and enjoy the speed (British Airways, 2003). The revenue collected from the operations could not meet the operational expenses, maintenance cost, and the cost of manufacturing spare parts. The Concorde required more time to be accepted in the market. I feel that the Concorde project could have succeeded if it was initiated at a small scale. For instance, with a sitting capacity of 10, the commercial supersonic traveling services could be offered to a fewer people willing to pay the cost (Hirschey, 2009, p. 113). I hope the developer would reconsider the project and re-launch it in future with a focus on a smaller scale than targeted before. References List British Airways, 2003. Celebrating Concorde, London: British Airways. Clarke, F. G. Gibson, A., 1976. The story of the world's most advanced passenger aircraft, s.l.: s.n. Dutta, A., 2003. Why was the Concorde retired in 2003 despite having a good operational history barring the 2000 crash?, s.l.: Quora. Glancey, J., 2015. Concorde: The Rise and Fall of the Supersonic Airliner. Main edition ed. New York: Not Available. Glassman, G., 2005. Supersonic Dream, s.l.: PBS broadcast. Hirschey, M., 2009. Managerial Economics. 12th edition ed. New York: Wiley. Kelly, N. Meredith, A., 2005. The Concorde Story: 34 Years of Supersonic Air Travel. 1st edition ed. Paris: Merchant Book Co. Orlebar, C., 2004. The Concorde Story: 21 Years in Service (Osprey Civil Aircraft). 6th edition ed. London: Osprey Publishing. Orlebar, C., 2011. The Concorde Story. Seventh Edition ed. London, UK: Osprey Publishing. Orlebar, C. Marshall , L., 2004. The Concorde Story: Includes an Account of Concorde's Final Flight: 21 Years in Service. 6th Edition ed. London: Osprey Publishing Ltd. Owen, K., 1997. Concorde and the Americans: International Politics of the Supersonic Transport (Smithsonian History of Aviation and Spaceflight Series). First Edition edition ed. New Jersey: Smithsonian. Simons, G. M., 2012. Concorde Conspiracy: The Battle for American Skies 1962-77. 1 edition ed. New York: The History Press. Trubshaw, B. Lowe, C. J., 2000. Concorde: The Inside Story. London: The History Press.