HC Deb 03 April 1979 vol 965 cc621-2W
Mr. Terry Walker

asked the Secretary of State for Industry whether he will make a statement on the placing of the two unsold British-assembled Concorde aircraft.

Mr. Varley

On 22 February, my right hon. Friend the Secretary of State for Trade announced new financial arrangements for the British Airways fleet of five British-assembled Concordes, under which 80 per cent. of the fleet's future operating surpluses as defined will be paid to the Government. In considering the future of the two unsold British-assembled Concordes, the Government have taken into account that, while the ultimate value of a Concorde cannot be established in the foreseeable future, its capacity to generate operating surpluses is expected to rise substantially over the working life of the aircraft. We have therefore concluded that the right course is to place the two aircraft in a way which will maximise the total operating surplus of British-assembled Concordes, and which will assure for the Government the major part of the operating surpluses generated by the two aircraft.

On that basis, the Government have decided to allocate the two aircraft to British carriers. Within the framework of this decision, and in the light of an offer by British Airways, the Government have decided that one Concorde should in due course be placed with British Airways at a minimal cost to the airline on the, basis that 80 per cent. of the enlarged fleet's operating surpluses will accrue to the Government. Work to modify this aircraft to British Airways' standard will begin shortly. A decision on the placing of the second Concorde has been deferred to allow British Airways and British Caledonian Airways to develop financially acceptable proposals for its utilisation.

The placing and support of these aircraft will require the financial and logistical co-operation of the French Government and manufacturers. Corresponding British co-operation will be needed too bring the three unsold French-assembled Concordes into airline service. These and other Concorde issues are scheduled for discussion between British and French, Ministers at an early date.