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The story of the VC10 often includes a note stating that the type was so much more expensive to operate compared to its competition, the Boeing 707. Over the years I have tried to compile some data in an attempt to get to the bottom of this statement. How much more expensive was it for the operator? The easiest way to look at this is to start from BOAC's annual reports, as these show the numbers for both the VC10 fleet and their 707s. This led to the article below. There is a second side to this story, the question of how much money Vickers made on the project. I plan to look at that in the future and will add it to this page or add a separate article. Let's start with the airline side of the story, but before I do I have to thank both Geoff Hall and Gert Meijer for their thoughts and supplied information.
Airline economics are a complicated subject. Working out the cost of operating an aircraft is not as easy as taking the purchase price and dividing this by the miles flown. First of all, as distance is very much influenced by weather, specifically wind, often the time is the more relevant unit. That is not the only variable to influence costs though and several approaches to quantifying operating costs have emerged. From this large subject two units have emerged as useful cost indicators:
The first one will give you the price to operate the aircraft for one hour while carrying cargo (either self-loading or actual freight), the second one is the price to carry an imperial ton of cargo over one mile. As long as you use the same definition for both the weight and the distance, you can compare these numbers between types, while taking into account that some types can carry more useful load than others. Over the civil career of the VC10, the cost per revenue flying hour was a number in the hundreds of pounds, while the cost per CTM was originally given in dimes, and later in (new) pence after decimalisation in 1971. These Cost per CTM numbers have all been converted to a (new) pence figure for comparison's sake. Note that inflation has not been taken into account, so comparing these numbers to other values from those days is probably not realistic, but it provides a pretty fair basis for a comparison as we are mostly looking at the costs relative to other types.
Graph 1 shows the three relevant aircraft types with the cost per revenue flying hour in pounds plotted for the various years that these types were operated by BOAC. The graph clearly shows a few interesting things:
It is worth mentioning that the 707 when first introduced was significantly more expensive than the Comet 4s that were already flying. In the 1961/62 financial year the 707 cost £461.80 per hour while the same hour of flying only cost £294.73 for a Comet 4. The main difference was in the cargo carried, with the Comet 4 initially seating only 48 while the 707 could seat up to 141 passengers, which was much closer to the VC10's seating capacity. Because of this, the larger 707 was a lot less expensive to operate compared to the older de Havilland jetliner. This is clear when you look at the Cost per CTM. (Incidentally, this was 21.55 old pence for the Comet in 1962, which equates to 8.98 new pence. Compare that to the figures in Graph 2 below.)
This graph also includes two dotted lines. One for the expected costs for the 707 (dark grey) and one for the promised operating costs for the VC10 (light blue). Note that these promised or expected figures are only relevant for the early years of operation. It immediately becomes clear that the Standard VC10 (type 1101) did not meet the promised figure. This variant was very much the losing party as it was too far advanced on the production line to be reconfigured with the redesigned leading edge without incurring a significant delay. Because of this, BOAC accepted the type with the original wing and concurrent higher drag figure. The Super VC10 did get the full benefit of both the redesigned wing and the changed thinking with regard to the envisioned operating theatre. This variant traded some performance for higher capacity and this graph shows the effect: a significantly lower cost per CTM than the Standard VC10, a difference that continued to exist throughout the BOAC career of these two subtypes. Having the capacity for more paying cargo clearly paid off for this variant. Comparing the Super VC10 and 707, we can see that the numbers were to the 707s advantage, but not by much. From 1966-67 on the numbers are close together and variations in operating costs appear to influence both types in the same way. After 1970-71 the Super VC10 actually has the advantage, however slight, over the 707. This may be related to the fact that the 707s needed a pretty major mid-life overhaul of the wing structure that was not needed for the VC10s. This project was carried out over two winters in the 1967 to 1969 timeframe, cost £835,000 and extended the life of the type from 30,000 flying hours to 50,000 hours. Although the differences are small the outcome of this can be significant, as the cost per CTM should be viewed against the very high number of miles that the airframes racked up over these years. Taking a random early 70s year as an indication, the Super VC10 fleet produced 626 million CTMs while the 707 fleet produced 758 million CTMs (1971-72 figures). The 0.10 pence difference becomes a large number of pounds when multiplied by these figures. To be fair, I need to add to this that I have used the numbers for the original Boeing 707-436 as built for BOAC in this graph. The annual reports only show B707 as a type up until 1969-70 and afterwards they split this into B707-436 and B707-336 (or B707 'pax' and 'cargo' in other years). The -336 variant was based on the later -320 subtype and equipped with Pratt&Whitney JT-3D turbofans instead of the Rolls-Royce Conway 12 engines that were used on the -436 variant. Even though the Conway was also a bypass engine, the JT-3D was a slightly more modern development of the original JT-3 engines and the combination of the -320 airframe and JT-3D engine was a lot better for the costs. The -336 variant started out at 2.86 pence per CTM in 1969-70 and the operating costs for this variant would continue to be significantly lower than for both the 707-436 and the VC10s. This may also be due to the fact that the -336 was operated as a freighter for a large part of its career, but apart from this it is an indication of how further development managed to bring operating costs down significantly, an option not granted to Vickers unfortunately.
Another interesting number is utilisation (Graph 3). Commercial airliners do not earn any money by sitting still. You only get some return on your investment by putting them in the air and keeping them there. You do need to have them on the ground for essential tasks such as unloading, fuelling, loading etcetera, as well as scheduled and unscheduled maintenance. The average hours per day (over a full year) that you managed to have them flying is a good indicator of how useful a type is to you as an airline. Graph 3 shows these numbers for the two VC10 subtypes and the 707-436 model in the BOAC fleet. This data shows that the VC10s were pretty evenly matched at first, with the Standard VC10 losing out to its longer brethren from the late 70s on. The 707s started out slow when they first showed up in 1960, but they quickly averaged over 10 hours of flying per day. Of interest is the drop in utilisation for this type from 1970 onwards. This might be due to the 747's introduction, the use of other 707 variants or other factors but by that time, the VC10s were obviously better money-makers for BOAC than this 707 variant was. This lower utilisation may partially be responsible for the change in operating costs seen in previous graphs for the 707s. If they are used less, the cost per flying hour will go up as most of the running costs stay the same but less revenue is produced. There may well be other reasons for the discrepancies shown though and a complete explanation will be hard to come by after all these years. To put the numbers in this graph in perspective, the 747 was achieving a daily utilisation of nearly fourteen hours per day by the summer of 1973, significantly higher than the VC10s or 707s managed to reach during the mid 70s. This same 747 was also able to operate for 3.62p per CTM in 1972/73. Compare this to some of the numbers in graph 2.
Adding the fleet size to the utilisation figures (Graph 4) does not provide all that much extra information. The starting dates for the various fleets could be a point of discussion, this is due to the discrepancy between delivery and start of service (in the eyes of the operator). Clearly BOAC started operating the VC10 in April 1964 when G-ARVJ operated the first scheduled service. This starting date is somewhat earlier than the first sign of VC10 operations in the numbers here, in the 1964/65 financial year. While there were twelve Standard VC10s 'available' in that year, the full fleet will not have operated a full season during that first year of operations. The same holds for the other types and may explain the gradual increase in utilisation over the first year or two. The addition of the number of airframes does show that the decrease in use of the B707 from 1970 on is not linked to a dwindling fleet size. We do know that the type needed an expensive structural overhaul during those years and this is most likely the explanation for the change. This is shown in Table 2 below. What is interesting is how the 707 started out at a pretty low utilisation during the first few years of it being in use, explaining the higher operating costs. This may of course be due to unfamiliarity with the type but it also shows how the VC10 was quicker to 'deliver' for its owner. It took several seasons for the 707 to get to 10 hours of utilisation per year or more, while the VC10 got there a lot quicker. The 1964/65 annual report stated that "For the introduction into scheduled service of a completely new aircraft, the achievement and maintenance of the high daily utilisation realised with the Standard VC10 is an indication of the effort that the Division has contributed to this programme." This effort mentioned was the close relationship between BOAC's operational and engineering departments and the aircraft's builder, Vickers, in Weybridge. One part of this effort was the use of new VC10 components in BOAC 707s prior to the VC10's introduction so that service experience could be built up. This led to a very smooth introduction, which still had its teething troubles, but managed a very quick build up to a useful utilisation figure.
Table 1: Breakdown of costs per flying hour (£) for VC10 and 707 variants during 1969/70 (Hall, 1974, adapted).
Table 2: Breakdown of costs per flying hour (£) for VC10 and 707 variants during 1972/73 (Hall, 1974, adapted).
The breakdown and data in Tables 1 and 2 are from a 1974 report by Geoff Hall who used internal BOAC data to have a look at the 707/VC10 orders. The costs per flying hour do not completely match the numbers from the various annual reports as shown in the earlier graphs, perhaps they cover slightly different periods. An interesting point is that various minor costs are not specified, but do turn out to contribute 5 to 15% of the operating costs, which is a significant number. This breakdown does show the influence of fuel consumption on the costs. This comprises approximately 25% of the hourly cost and the numbers clearly show the two Vickers variants to be more expensive on this front. The cells marked in yellow indicate the increased costs due to the 707's mid-life update program mentioned earlier. As we do not know how these costs were spread over the various years and what the breakdown of the engineering costs looked like, it is difficult to say a lot about this particular category. One theory is that the VC10 was less expensive to maintain overall, but the data I have is not detailed or complete enough to confirm nor deny this. The numbers shown in the tables above certainly point in the opposite direction. Having looked at BOAC's figures in detail, another interesting question is how other operators managed to make their VC10s pay for themselves? History has shown that East African Airways ended up being unable to balance their books. They did have a significant advantage though in that their VC10s had the main deck cargo door that Freddie Laker had built for the type. This enabled the airline to operate their routes while carrying significant amounts of cargo next to a complement of passengers. Routes on which the demand was not high enough to fill an entire Super VC10 could be flown with a lower number of passengers and the cabin adapted to carry cargo as well. This changed the odds in the VC10's favour, as the right cargo contract could add a significant bit of income to the balance sheet. BUA also made good use of this option, by adding cargo to the mix on their South American routes they were able to make money out of a set of destinations that BOAC were happy to be rid of. It is difficult to say a lot about the finances of the other operators. On African and Middle Eastern routes Ghana Airways, Nigeria Airways, Air Malawi and MEA no doubt were able to fill up their VC10s more than they could a 707 on a warm day. The benefits of the hot and high capability of the type will have served them well, and the question hinges on whether these airlines were able to sell the tickets needed to fill the seats on these flights. Together with Gulf Air, some of them also had the benefit of having bought the VC10s second hand, or they leased the airframe(s). By the early 1970s BCal tried to sell their VC10s for £1.25M each (based on a pencilled note on the sales brochure). That is significantly less than original purchase prices from the early 1960s, especially when taking into account the cumulative inflation of approximately 43% over that period. A typical £2.95M purchase price from 1964 would be worth approximately £4.22M in 1971, turning a £1.25M second-hand airframe into quite a good deal. What happened next? Due to a number of reasons, that is something I do not know. One reason is that on 1 April 1974, BOAC merged with BEA to become British Airways, a state-owned entity that later became a privatised commercial concern that continues to operate to this day. The company was still state-owned throughout the rest of the 70s but so far I have not yet been able to obtain any of their annual reports. I know that the historic data is out there, and a place like the British Airways Heritage Collection has yearly accounts and such going back to 1974, but I have not yet been able to visit them and carry out any further research.
By 1973 the oil crisis was in full swing. This had a major effect on operating costs as fuel prices skyrocketed. The crisis, combined with coal miners and railroad workers strikes during the winter of 1973-1974, almost led to a major energy crisis within the UK. The effect of all this on aviation was profound, the industry needed to save fuel and consolidate operations to weather this economic storm. This spurred on the development of more economic types and larger fan engines. The VC10 obviously could not match the requirements of this newer age. This effect was not lost on the competition: the 707's retirement was also accelerated by the increase in fuel costs, which was aggravated by the influence of anti-noise legislation turning up around the same time, and the type left BOAC/BA's service not much later than the VC10s, with the last one going to a new owner in 1984. The market changed and continued to change during the 1970s. Freddie Laker's Skytrain venture would (eventually) lead to various low-cost/no-frills operators and the continuing growth of air travel for tourism led to more operators and various charter airlines. Larger airliners such as the 747 became the norm for long-distance travel, with journalists predicting even larger types for the future, and the VC10 was relegated to the second-tier routes. Ironically, these included the various routes to the Middle East and Africa that suited the type to a tee. Within a fleet that included 747s the Super VC10s were now the smaller airliners and by the late 70s and into 1980 and 1981 they would also be used on some distinctly short-range routes. Although using a type on a route that is way off the optimum range is financially not very advantageous, by now the Super VC10s were a stopgap type that could be used to sort out scheduling issues or capacity shortfalls.
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