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I think the criticism is that it's not much of an achievement to get a non-binding commitment to sell what some people think is $20b worth of work for $2b. Yes

I think the criticism is that it's not much of an achievement to get a non-binding commitment to sell what some people think is $20b worth of work for $2b. Yes it's a flashy number to throw around (whoa, $2b!) but at the end of the day, the real challenge hasn't even begun yet. Edited: Revised the numbers to better reflect the article.

rory096 11y ago
I'd call those criticisms spurious. First off, the Concorde had a unit cost of £23 million in 1977 - about $130 million in 2016 dollars – for a plane 2.5x the size. An early-bird unit price of $200m doesn't seem all that unreasonable. Secondly, why should they have to amortize all their development costs on the very first sale? Yes, there's still a ton of technical work to be done. But it's a hell of a lot easier to hire smart people and raise the funding you need to build stuff when you've decisively proven the business case for your product.
- timr 11y ago
  The Concorde cost ~£1 billion to develop in the 1960s. That's something like £17 billion, inflation adjusted. Also, not for nothing: "An advertisement covering two full pages, promoting Concorde, ran in the 29 May 1967 issue of Aviation Week & Space Technology. The advertisement predicted a market for 350 aircraft by 1980 and boasted of Concorde's head start over the United States' SST project. The consortium secured orders (i.e., non-binding options) for over 100 of the long-range version from the major airlines of the day: Pan Am, BOAC, and Air France were the launch customers, with six Concordes each. Other airlines in the order book included Panair do Brasil, Continental Airlines, Japan Airlines, Lufthansa, American Airlines, United Airlines, Air India, Air Canada, Braniff, Singapore Airlines, Iran Air, Olympic Airways, Qantas, CAAC, Middle East Airlines, and TWA. At the time of the first flight the options list contained 74 options from 16 airlines." [1] Guess how many they sold? 14. LOIs for unbuilt, undesigned airplanes are meaningless. [1] https://en.wikipedia.org/wiki/Concorde https://en.wikipedia.org/wiki/Concorde
  - notahacker 11y ago
    To put things into perspective, I once did some back of the envelope maths which suggested that the governments that underwrote the development costs of Concorde spent something in the region of £2000 per flight ticket sold in today's money. It's something of an understatement to say the business case for SSTs remains unproven.

rory096 11y ago

I'd call those criticisms spurious. First off, the Concorde had a unit cost of £23 million in 1977 - about $130 million in 2016 dollars – for a plane 2.5x the size. An early-bird unit price of $200m doesn't seem all that unreasonable. Secondly, why should they have to amortize all their development costs on the very first sale? Yes, there's still a ton of technical work to be done. But it's a hell of a lot easier to hire smart people and raise the funding you need to build stuff when you've decisively proven the business case for your product.

timr 11y ago
The Concorde cost ~£1 billion to develop in the 1960s. That's something like £17 billion, inflation adjusted. Also, not for nothing: "An advertisement covering two full pages, promoting Concorde, ran in the 29 May 1967 issue of Aviation Week & Space Technology. The advertisement predicted a market for 350 aircraft by 1980 and boasted of Concorde's head start over the United States' SST project. The consortium secured orders (i.e., non-binding options) for over 100 of the long-range version from the major airlines of the day: Pan Am, BOAC, and Air France were the launch customers, with six Concordes each. Other airlines in the order book included Panair do Brasil, Continental Airlines, Japan Airlines, Lufthansa, American Airlines, United Airlines, Air India, Air Canada, Braniff, Singapore Airlines, Iran Air, Olympic Airways, Qantas, CAAC, Middle East Airlines, and TWA. At the time of the first flight the options list contained 74 options from 16 airlines." [1] Guess how many they sold? 14. LOIs for unbuilt, undesigned airplanes are meaningless. [1] https://en.wikipedia.org/wiki/Concorde https://en.wikipedia.org/wiki/Concorde
- notahacker 11y ago
  To put things into perspective, I once did some back of the envelope maths which suggested that the governments that underwrote the development costs of Concorde spent something in the region of £2000 per flight ticket sold in today's money. It's something of an understatement to say the business case for SSTs remains unproven.