The announcement from Aerion that it folding its supersonic business jet program is significant. Aerion’s demise is a major reality check for the industry. Despite backing from numerous key industrial partners, a supposed ten billion dollar order book, final design verification of the AS2 jet almost complete, and production start planned for 2023, Aerion has failed to attract adequate funding to transform the project into hardware.
Its direct competitors Boom Supersonic and Spike Aerospace are in different stages of their own projects, with Boom in an advanced stage with its XB-1 demonstrator. What Aerion’s demise means for their success (less competition?) remains to be seen, but the sudden announcement from Aerion on May 21 is an indication of second thoughts with investors about the financial and long-term outlook for a supersonic business flight.
AS2 under development since 2014
Aerion has been working on the AS2 since 2014 after abandoning its first attempts that went back to 2003 when Robert Bass started the company. The AS2 was launched as a 12-seat business jet with three engines, two slung under the wings and one in the tailplane. In 2018, General Electric committed itself to the project as the exclusive supplier of the Affinity powerplants. The AS2 would have a supersonic speed of Mach 1.4 but would fly most of the time at what it called boomless cruise between Mach 1.0 and 1.2. The aircraft would have a subsonic range of 5.400 nautical miles.
In 2019, the Reno (Nevada)-based company secured major backing from industrial partners. On February 5 that year, Boeing announced a partnership that included a significant investment in engineering, manufacturing, and flight test resources. Boeing would also put its marketing efforts behind the AS2.
At the time, Boeing Next vice-president Steve Nordlund said: “This is a strategic and disciplined leading-edge investment in further maturing supersonic technology. Through this partnership that combines Aerion’s supersonic expertise with Boeing’s global industrial scale and commercial aviation experience, we have the right team to build the future of sustainable supersonic flight.”
Production of 300 aircraft planned in the first decade
On February 21, 2019, Aerion and Spirit Aerosystems announced a collaborative agreement for the development of the pressurized forward fuselage. CEO Tom Gentile said: “Joining a project team this early allows us to apply our technical expertise and commercial best practices to make the most positive impact. We can create cost-efficient, innovative engineering solutions that take into account Spirit’s highly efficient manufacturing processes.”
This was followed by a Memorandum of Understanding in July 2020, in which Spirit committed itself to further investments in Aerion and contributed with further engineering resources. Spirit said it expected to build 36 forward fuselages per year once the program would run at full rate, with the first aircraft planned to be completed in 2023 for the first flight in 2024 and entry into service in 2026. In the first decade of production, some 300 AS2s were set to be completed.
Wind tunnel model of the Aerion AS2, constructed with the help of The Netherlands-based NLR Aerospace. (Aerion)
In December 2019, GKN Aerospace joined the program to develop and design the empennage of the business jet as well as the electrical wiring interconnection systems. That same month, Safran said it would supply the landing gear, braking, and also design the engine nacelles, which form a key part of a supersonic jet.
Aerion’s CEO Tom Vice hailed the partnership as working with the French company: “It’s that wealth of experience, paired with Safran’s eye toward the future and our shared commitment to sustainability that makes us feel so confident about this relationship.” The list of key suppliers grew almost by the month to include Potez Aeronautique, Collins Aerospace, Honeywell, BAe Systems, Liebherr, Rosen Aviation, and PPG.
Florida was chosen as the site of Aerion Park
Aerion also recruited heavily for its engineering and management teams and announced in August 2020 that it would establish its manufacturing plant in Melbourne (Florida). Aerion Park was to become a site of over 110 acres, including a campus. With the potential of offering 675 jobs in 2026 and creating a true aviation technology center, Space Florida, invested in the $300 million project at Orlando Melbourne International Airport. “This is a truly transformational project for Florida that changes the game both for high-speed air transportation as well as for advanced aerospace manufacturing in the state”, Florida Space President and CEO Frank DiBello said.
Last November, Aerion said it has successfully completed low and high-speed wind tunnel tests in the US and in France, equalling hundreds of flight hours and 78.000 nautical miles flown. It used a model built in partnership with the Netherlands Aerospace Center NLR. The high-speed simulation at the ONERA wind tunnel in Modane was essential to validate the final design before Aerion would commission the production of key parts for the first AS2 in 2022.
Aerion revealed this artist’s impression of a Mach 4 airliner in March, the AS3. (Aerion)
The OEM revealed the first glimpse of future plans on March 29, when it presented ideas of the AS3. As a 50-seater commercial airliner with a range of 7.000 nautical miles potentially doing Mach 4, the AS3 would be a direct rival to Boom’s Overture. Aerion promised further details later this year.
Order book includes just twenty firm orders
Since the launch, Aerion had worked hard on building its order book but this has proved quite difficult. It claims to have a $10+ billion backlog, but the only firm order that has been announced is that from FlexJet at the NBAA in November 2015. It ordered twenty AS2s worth $120 million each.
As recently as March 3 this year, Netjet said it had signed an agreement for purchase rights for twenty aircraft. A purchase right is not a firm order, so if FlexJet’s agreement is the only firm deal in the book it would represent only $2.4 billion in list prices. That’s a far cry from the ten billion it claims to have in potential orders.
It’s this lack of firm orders and customers at a time when it needed to commit to investing in the actual production start that seems to have swung Aerion’s destiny in the opposite direction. From a technological standpoint, the AS2 is sound, as the company confirmed in its May 21 statement: “The AS2 supersonic business jet program meets all market, technical, regulatory and sustainability requirements, and the market for a new supersonic segment of general aviation has been validated with $11.2 billion in sales backlog for the AS2.”
It is the business case that has come apart: “In the current financial environment, it has proven hugely challenging to close on the scheduled and necessary large new capital requirements to finalize the transition of the AS2 into production.”
The Boom Overture has got massive media attention but firm orders are lacking. (Boom Aerospace )
As a matter of fact, Boom and Spike don’t seem to be in much better shape. Boom’s Blake Scholl said in March that 2021 is a “pivotal year” as it prepares for the first flight of the XB-1 demonstrator and accelerates the development of the Overture 65-88 seater. While Boom is ahead of Aerion in that it has about to test an actual plane, the business case could have some similarities: no firm orders and huge investments ahead.
Boston-based Spike Aerospace’ 12-18 seater S-512 has only won two orders that were announced in 2019. Its website shows a 2021 delivery date, but the business jet still has to make its maiden flight. It’s not just Aerion that will be forced into a major reality check.
First deliveries of the Spike S-512 were scheduled for this year but the aircraft still has to make its maiden flight. (Spike Aerospace)
In a statement to the Seattle Times, Boeing said it is disappointed that Aerion has failed to secure additional funding. The airframer, which had Mike Sinnett as a board member at Aerion, remains committed to working “with innovative and creative partners who, like Aerion, continue to push limits on groundbreaking technology.”
Is there a better business case for zero-emission aircraft?
It could be that Boeing is looking for these innovative partners in a different market: that of hybrid, full-electric, or even hydrogen aircraft technology, which a range of start-ups across the world is preparing to enter. Almost all are in very early stages of development and have secured only purchase rights, like Heart Aerospace from Finnair recently.
It will be interesting to see how investors compare their business cases for zero-emission aircraft against those for supersonic jets and that Aerion’s demise marks a shift away from the latter kind of aircraft.