1. Memorandum From the President’s Assistant for International Economic Affairs (Flanigan) to President Nixon1
SUBJECT
- The Concorde
President Pompidou and Prime Minister Heath have written to you asking for support with respect to various U.S. regulatory hurdles which the Concorde must cross in order to be legally flown into this country. These letters and proposed responses are attached at Tabs 1 and 2 respectively.
The Concorde has been in development for ten years at a cost of about $4.5 Billion to the British and French Governments. U.S. Government experts believe that the airplane will be so expensive as to require premium ticket prices or cross-subsidization. They also express the general conclusion that the Concorde is a technological failure which will be economically unsuccessful and environmentally (principally noise) unsatisfactory. Thus far there are no firm orders for Concordes except those of BOAC and Air France. Iran and PRC have given highly qualified orders and a number of U.S. and other airlines hold options to [Typeset Page 2] buy Concordes. The Pan American and TWA options expire at the end of January, and both airlines have indicated that they will not exercise their options (however, the British and French Governments have not yet been informed of this).
Because the Concorde’s principal asset is its supersonic speed, its natural markets are Transoceanic (because of the sonic boom problem over land) routes to and from the United States (because of the heavy traffic on those routes). If U.S. environmental, safety or other regulations were to keep U.S. airlines from buying the Concorde or to prohibit the Concorde from landing in the U.S., its potential for sufficient sales to be economically viable (approximately 400 planes) would be destroyed.
The many facets of civil aviation regulation in this country require that any new airplane which is to be flown here be subjected to close scrutiny on all aspects of its construction, maintenance and operation. As development of the Concorde has proceeded in tandem with increasing environmental protection regulations here, it has become increasingly clear that if all relevant agencies are left on their own the Concorde will never be allowed into the U.S. Warned of this possibility and suspicious that these actions had been designed by the Administration as non-tariff barriers to destroy competition for our own aircraft industry, the British and French have steadily escalated their cries of alarm, including a recent meeting with me by both Ambassadors and their technical experts stressing the danger on a broad economic front and culminating in the attached letters to you. This timing may have resulted in part from the approaching deadline on the American options. On the assumption that PAA and TWA do not exercise their options, we want to be sure that the blame for that decision rest solely on economic considerations, rather than on U.S. Government action.
At a recent meeting of cabinet and subcabinet representatives of the Departments of State, Treasury, Commerce and Transportation, the National Security Council, and the Council on International Economic Policy the various environmental concerns and safety and operating problems relating to the Concorde were reviewed and a plan of action was unanimously agreed upon. Minutes of that meeting are attached at Tab 3.
This recommended plan can be characterized as one of accommodation of the Concorde on issues of administrative discretion within our control (other than safety matters which would be left to the technical discretion of the FAA). Our private advice to the French and British would be to that effect, coupled with the advice that (a) EPA and FAA noise and emissions standards must be nondiscriminatory and (b) the CAB as an independent agency with authority for airline fares, the Congress as a co-equal branch of the Government, and local com [Typeset Page 3] munities may take actions which could harm the prospects of the Concorde and which would not be subject to the control of the White House.
In the first specific Executive Branch action, the FAA is about to issue an advance Notice of a Proposed Fleet Noise Rule which would require a reduction in the average noise levels of the fleets of U.S. airlines by the end of 1976. In accordance with the agreed plan of action, this rule will be drafted so as to be inapplicable to the Concorde.
In addition, it has been agreed that a proposed FAA rule which would apply subsonic noise standards to all supersonic airplanes will be delayed until comments have been received on the proposed fleet noise rule, on the basis that these two rules are related and should be made final jointly and in connection with a joint environmental impact statement.
Through these actions we will signal our intent not to impede the prospects of the Concorde to the extent that that result is within the control of the Administration. Furthermore, nothing in this proposal will provide anything solid upon which the environmentalists can mount an attack in Congress or the news media.
Recommendation:
1. That you approve the policy recommendations and course of action discussed in this memorandum. NSC, State, Treasury, Commerce and Transportation concur.
2. That you sign the attached letters (Tab 2) to President Pompidou and Prime Minister Heath responding to their letters to you on the subject of the Concorde. These letters have been cleared with NSC and approved in substance by State.
Discussion:
The letters to Pompidou and Heath are intended to assure them of our good faith in this matter while indicating that such good faith should not be repaid with any kind of governmental subsidy of the price of the Concorde which would allow it to compete with U.S. planes other than on its own economic merits. We also refer obliquely in the Pompidou letter to the undesirability of French pressure on the Swiss Government not to buy our A–7 military aircraft.
Approve*
Disapprove
See Me
*Secretary Schultz and Chuck Colson concur.
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Summary: Flanigan sought Nixon’s approval of U.S. policy toward Concorde.
Source: National Archives, Nixon Presidential Materials, NSC Files, Box 752, Presidential Correspondence, France, Pompidou, 1972 (1 of 2). Confidential. Shultz and Colson concurred. Attached but not published is Tab 1, a December 11, 1972 letter from Kosciusko-Morizet to Nixon; Tab 2, a December 11 letter from Cromer to Nixon; and Tab 3, minutes of a December 11, 1972 Interagency Review Group discussion of Concorde. Nixon did not indicate his preferences regarding Flanigan’s recommendations; however, he did sign the attached letters to Heath and Pompidou, both of which are dated January 19. (Ibid.)
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