125. Memorandum of Conversation1
- The Concorde and the US SST
- Brigadier General Jewell C. Maxwell, Deputy Administrator for Supersonic Transport Development
- Frank E. Loy, Deputy Assistant Secretary, Economic Affairs
- J. Bruce Amstutz, Aviation Liaison Division, Department of State
Mr. Loy said that the purpose of his meeting with General Maxwell was to gain further insight into the US SST program and to obtain [Page 228] the General’s views regarding Dr. Stephen Enke’s (Deputy Assistant Secretary of Defense) proposal for a tripartite US-UK-France agreement to delay commercial introduction of the Concorde and the US SST.2
For purposes of perspective, General Maxwell said that the Concorde was expected to make its first prototype flight in 1968 and to be in commercial operation in 1971. The first flight of the US SST prototype was expected to take place in 1970 with commercial deliveries in 1974 at the earliest. There was a good possibility, however, that the US SST would not be ready for commercial service until 1976 or thereabouts.
General Maxwell added that a unique feature of the US SST development schedule was the overlapping of the prototype, certification, and production phases. This is not the normal way civil aircraft are built. All three phases would overlap in 1970, and the certification and production phases would continue to overlap for three and a half more years. This overlapping of phases, with the many retoolings that will be required, promises to be very expensive. The full 4-year certification and production stage will cost $1 to $2 billion, bringing the total bill for the US SST (together with R&D costs) to $3 to $4 billion. This overlapping of phases is a consequence of a decision of the President’s Advisory Committee which calls for: go slow now; accelerate later.
Elimination of this overlapping of phases would result in an extension of the time necessary to develop a US SST. This would suggest that the FAA was in favor of Dr. Enke’s proposal for a tripartite agreement. On the contrary, the FAA was against it. The idea of a tripartite agreement was raised and discussed last fall during a meeting of the President’s Advisory Committee and was not adopted. It was discussed again most recently, a few days ago, between FAA Administrator General McKee and Secretary of Defense McNamara. Both agreed the proposal should not be pursued.
General Maxwell said that the FAA was opposed to an agreement for several reasons. First, the FAA did not believe that the US was in a good bargaining position or could ever get the UK and France to delay introducing the Concorde. The builders of the Concorde were well aware of the time advantage they enjoyed over the US SST and may be cognizant that the 3-year lead time they now have could stretch to 5 years. They would be foolish to delay introducing their plane.
Secondly, even if negotiations could be concluded successfully to delay introduction of the Concorde, FAA would oppose this for fear of the adverse appropriations effect this would have on Congress. [Page 229] Congress would be sure to learn of any attempt to delay introduction of the Concorde and US SST and would probably react by cutting FAA’s annual requests for SST development funds. Any cut this year and for the next few years, when we are already in a slow stage, would be particularly unfortunate. In any case, it is hard to believe Congress would not try to stretch out its appropriations, with the effect that at the end of the extended period, the US SST would not be any more ready for service than under the present plan. It is thus doubtful that a more efficient US SST would end up being built by negotiating a stretch-out agreement.
Thirdly, this year, 1966, is not the most advantageous time to negotiate with the UK and France. If we were to decide to negotiate, it would best be done in 1968. At that time, the UK and France will be faced with the decision of moving into their expensive production phase costing $1 billion or more. Similarly, the US would be at the point of requesting large appropriations for the first year of the overlapping phases mentioned above. Both sides and the three national legislatures involved would be faced with the need for very large sums and thus might be more amenable to some stretch-out agreement.