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Daily Insight: Thursday 7 February 2019: Is the Boeing Investment in Aerion Sound?

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News

Boeing has announced a “significant investment” in the Aerion supersonic business jet, and appears to be a closer tie than Aerion’s previous partners, Airbus and Lockheed Martin.  Financial terms of the investment were not disclosed, but it was expected that Boeing would provide Aerion with engineering, manufacturing, and flight test resources, as well as “strategic vertical content.”

Analysis

Boeing will be the fourth major partner for Aerion, joining GE, who will produce the Affinity engine for the supersonic business jet.   The history, with both Airbus

and Lockheed Martin having a very close look at the technology and potential market and terminating their relationships, suggests that either the technology or management team is not up to speed.  Just a few months ago, at NBAA, Aerion was touting its partnership with Lockheed Martin.  Today, it has apparently found a new partner / financier.

Insight

Building supersonic aircraft is not easy. Competing in the business jet market is also not easy. The most logical player to bring a supersonic business jet to market is Dassault, who have both the military and business jet experience under one roof to easily integrate technologies and analyze the potential market. To date, they have not seen the business case develop well enough for market entry. Can Aerion succeed? It could, but will require substantial resources, apparently more than prior partners Airbus or Lockheed Martin were willing to provide.