I'm sure the airlines were well aware that conventional first-class tickets were more profitable. Both British Airways and Air France made plenty of money selli

I'm sure the airlines were well aware that conventional first-class tickets were more profitable. Both British Airways and Air France made plenty of money selling those at the time, and they still do. But Concorde was a differentiated product that other airlines couldn't compete with. Despite it's high operating costs, it was profitable (at least for BA) and it also acted as a "halo" product that boosted to the image/prestige of the entire airline. In the case of BA, they were also given the aircraft (and spare parts) by the government at far below market value. There may have been some kind of unwritten agreement that they would keep operating them for as long as reasonably possible, basically as a matter of national pride.