The Concorde Fallacy and why people make bad decisions

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7 points·kervokian··5 comments

Sunk cost fallacy is real, but sometimes ambitious pursuits accidentally end up making the world a better place.

Once Concorde went live it was making an operating profit of £30-50 million a year.

Clearly it wasn’t going to pay off the investment, but it didn’t make sense to retire it while it was making some profit to recoup on the losses.

During development it was assumed that demand would be much higher, so you can only say that they should have stopped with hindsight. To be honest the value proposition seemed pretty good on paper - half the journey time for 20% more cost compared to a first class ticket, at a time where first class was the market trajectory.

The planes were facing expensive maintenance costs, the operating profits weren’t going to last. Plus the planes were very unsafe., and couldn’t be easily brought up to modern safety standards.

I don’t think the Concorde was purely a financial decision. I think they also wanted to show they they could make a great plane (even if it cost them to do so).

It’s pretty depressing to make every decision on what makes the most money.

They only sold 14 Concordes and if they had invested the same time and energy in a more economically sound airplane design they could have sold hundreds or thousands and created far more highly skilled jobs fir much longer periods.

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