Takeaways from the 2023 Paris Air Show – Part 1

This series of stories will cover our takeaways from the Paris Air Show from a strategic perspective on the topics of Technological Change, Aftermarket and Retrofit Growth, Urban Air Mobility, SAF for Carbon Reduction, and Airbus continuing to pull ahead of Boeing in backlog and customer demand. The implications for the future of the industry are significant

We are already in an Era of Substantial Technological Change

We are in the midst of the most significant technology transition since the beginning of the jet age. If history repeats itself, leaders can be toppled by new technology players – for example Boeing’s ascendance in the 1950s and 1960s jet transition over incumbent leaders Douglas and Lockheed from the post-war propeller era. There will be opportunities for new players with innovative concepts to contribute to the decarbonization of aviation, and the substantial market that results from it.

The next new aircraft investment from the major players will need to be substantially different than today’s offerings. Boeing’s Transonic Truss-Braced Wing and Airbus ZEROe lifting body and open rotor designs are some of the alternatives that could make it to market a dozen years from now. It typically takes about 12 years from concept to reality to design a new airplane, so the choices being considered today will impact the industry for decades.

One thing is certain – the old-fashioned tube and swept wing with engines under the wing on a pod will be outperformed by designs with better aerodynamics. Predictions for a 20 percent improvement in fuel economy from aerodynamic improvements, plus 10-15 percent for new engines, including the GTF Advantage and CFM Rise open rotor will provide significant benefits for airlines, but all but obsolete existing models.

Now the question is which design, and when will it be introduced? And, as we move closer to radical designs that change economic equations, who will want to buy the last of the existing technology airframes without trade-in agreements? We may find a much shorter life-cycle for the last production units of existing technology aircraft than anticipated, and significant demand for the innovative and more efficient models.

Electrification technology is here to stay, with different technologies for different-sized aircraft. Small aircraft may be able to work on battery or hydrogen fuel-cell hybrid configurations once battery technologies mature further. But that technology will not be viable for airliner-sized aircraft with requirements for high speed and long range. That may require hydrogen, in one form or another, or a breakthrough that we haven’t yet anticipated.

The issue for hydrogen is infrastructure, as it would be different from the existing fuel delivery systems at airports, and a transition could be a difficult process at crowded tarmacs. The industry will need to overcome the hydrogen and the Hindenberg public perception of safety.

The automotive market is driving investment and R&D into batteries which will result in massive improvements. With the investment in automotive as well as aviation applications, we will likely see systems with nearly four times the power-to-weight ratios of today, with charging times cut by 2/3rds, by the early 2030s. New battery chemistries, including Lithium Iron Phosphate, Lithium Silicon, and solid-state batteries will emerge. But which one should an aircraft OEM bet on, and then choose among several manufacturers?

Choosing a battery supplier is a “bet the company” decision. Battery technologies are different and will require different control systems and fail-safe technologies for aviation use. Recharging times will need to dramatically improve to ensure aircraft turnarounds can be made in a typical time frame, rather than waiting for batteries to recharge, as aircraft utilization is a key driver of airline profitability. While current research is promising, the large number of players with differing technologies will need to agree on size, shape, and recharging technologies to enable the transition from older to newer technologies as batteries are replaced in aircraft over time.

Producing results in a laboratory is one thing, but achieving those goals in large-scale nano-factories at ever-lowering costs is another. Batteries are difficult to make, as the failure of one cell can cascade into damaging an entire battery, not something we want at take-off or at altitude. Even the best battery technologies will likely have a short economic life as technologies change rapidly over the next couple of decades. Even if companies like Solid Power or Toyota are successful with solid-state batteries, there are still hurdles to overcome.

One company contemplating an electric aircraft made a strategic pullback.  After reviewing battery technology options, Tecnam put plans for an electric aircraft program on hold. They concluded that it is better to hold off until batteries have sufficient power-to-weight ratios and life-cycle endurance. This seems a wise choice, given the plethora of battery technologies being explored. Industry predictions call for both fourfold improvements in power-to-weight ratios with major reductions in charging time by 2030. Safer chemistries, such as Lithium Iron-phosphate, that will not result in thermal runaway, will be readily available for automotive applications by 2025. But others say that Tecnam’s P-Volt was never going to work as it was based on a legacy design that had its compromises.

Several companies are planning for a technology transition. Heart Aerospace is advertising its ES-30 aircraft as an appreciating asset, as new battery technologies will enable it to perform better than the first versions of the airplane. The company anticipates substantial improvements that will translate into better and more cost-effective aircraft economics. Similarly, Deutsche Aircraft will launch its D328eco aircraft with a turboprop but is looking at both electric and hydrogen options for a future model and retrofit when technologies mature by 2040. The strategy is to keep the company at the forefront of performance and environmental trade-offs that provide airlines with an aircraft that provides viable performance and economics for the foreseeable future.

Electrification will mean a new supply chain. There will be different players for electric motors, battery control systems, safer battery chemistries, and new regulatory requirements to juggle over the next five years.  The following chart shows a timeline of projected battery development from a company directly involved in those technologies for the next two years, with more than doubling power-to-weight ratios. Betting on the right or wrong player is essentially “betting the company.” Risk and reward decisions regarding electrification, particularly for small regional aircraft, will shape competitive dynamics over the next decade.

Technologies are changing, and SAF cannot be the only answer for aviation. While SAF is the fallback position as the industry moves to carbon-free operations, it cannot be the only solution given the high costs,  feedstock requirements for biomass and plant-based fuels, and higher costs for PtL or Power to Liquid synthetics.