The shutdown of Aerion Supersonic last month should not have come as a surprise to anyone who had given even a modest amount of thought to what the Reno, NV-based company was aiming to do with its $120 million, Mach 1.4 supersonic business jet.
And it should serve both as a warning to other startups working on new supersonic corporate jets and airliners and as a very sobering lesson to those developing, investing in or hoping to fly aboard any of the myriad short-distance, low-flying Urban Air Mobility (UAM) vehicles – i.e. “flying cars” – now in development.
It was both sad and sadly predictable that Aerion announced on May 21 that it will not build its much-hyped AS2 10-passenger supersonic passenger plane and, instead will shut down its operations. Founded in 2004 by a group of serious, dedicated industry pros and backed by Texas billionaire Robert Bass, Aerion was widely considered to have the best chance of success and to be the farthest along of several groups developing new supersonic passenger aircraft. Yet it had, after 17 years trying, failed to build even one actual airplane; not even a working scale model, let alone a prototype. That meant it most certainly was not going to make its goal of having a working aircraft in the air and going through the testing and the Federal Aviation Administration’s certification process by 2024. And that, in turn, meant it almost certainly was going to miss its long-promised first delivery goal of sometime in 2029.
You see, flying in aircraft large enough for multiple adults to fly in great comfort – and to do so while not causing disturbing sonic booms on the ground below while traveling in excess of Mach 1, the speed of sound – is a significant technical challenge. Yet, as big as that technical challenge is, it was, and continues to be dwarfed by the almost incalculable economic challenge. If the motives of any of the companies that build and operate such planes are to make reasonable returns on their investments – and undoubtedly that is their collective motive – then they have an extremely narrow and difficult path to success. In fact, the path to economic success for supersonic passenger planes is so tough that the carrier believed to have the best chance of success just gave up on it.
Rivals Boom, Spike and Exosonic are, for now, continuing to work on their plans for new faster-than0-the-speed of sound commercial and corporate jet designs. And it’ not impossible for one or all of them to succeed where Aerion failed. But Aerion’s demise plainly illustrates just how difficult the task for those other developers really is.
In a purely mechanical sense, flying at speeds above Mach 1 – roughly 770 m.p.h. at sea level – isn’t all that difficult, so long as the aircraft has these three qualities:
- A set of powerful and sophisticated engines
- A frame and body constructed of advanced, lightweight, yet very strong and heat-tolerant materials
- A small enough profile so as not to create lots of wind resistance so that the plane can travel at sustained supersonic speeds.
Indeed, the late Gen. Chuck Yeager famously broke the sound barrier way back in 1947. Fighter jets have been flying supersonically almost every day for 60 years. And the famed Lockheed SR-71 Blackbird spy plane regularly flew north of Mach 3 – 2,300 m.p.h. – from the 1966 until its retirement in 1999.
But as the first and only supersonic passenger plane ever put into revenue service, the Aérospatiale/British Aerospace Corp. Concord proved over its 34 years of money-losing operations, breaking the profit barrier in such a plane is much, much harder than breaking the sound barrier.
Indeed, Aerion’s primary technical challenges were well known. Not only did it need help in sculpting an especial sleek and more aerodynamic plane large enough to carry 10 passengers, it also needed new ideas on how to achieve supersonic flight without generating the annoying and sometimes destructive sonic booms that led to the U.S. government banning supersonic flight over land. In 2014, after 10 years of research and design work on a smaller, twin-engine supersonic passenger plane, Aerion announced it would switch its focus to a slightly larger model called the AS2 and that it would partner with Airbus on a new, even more sleek shape. But by 2017 Airbus was out, Lockheed Martin was in, and the design had shifted to a tri-engine design that, in theory, would keep the plane from creating a sonic boom big enough to be felt on the ground below, at least until it reached a speed of about Mach 1.2. General Electric
Yet by 2019 Lockheed, too, was gone from the project and was to be replaced by Boeing
But the even bigger problem faced by Aerion – and by fellow supersonic passenger aircraft developers including Boom, Spike and Exosonic – has been economic in nature, not technical. As makers of military jets have been doing for decades, breaking the sound barrier is not just doable, it’s easy. What’s proven elusive thus far has been the ability of such planes’ makers and the airlines that would operate them to earn profits by building or flying them. Nor has anyone come up with a successful economic formula that would make such planes truly affordable for the big corporations, individual billionaires and/or big airlines that would buy and operate them.
Their value proposition is just all wrong, and it has been since the beginning of any talk of supersonic passenger travel began way back in the early 1960s. That’s when Britain and France partnered up to build Concorde and both the United States and the Soviet Union developed – then walked away from – their own supersonic designs.
Let’s look at it this way.
A modern widebody commercial airline today can fly between New York and Paris at speeds approaching Mach 0.9, or about 600 m.p.h. It takes about 7.5 hours to make that flight, with each such model carrying from 250 to as many as 500 fare-paying passengers.
Today’s most capable and luxurious long range corporate jets, like the Gulfstream G650, Dassault Falcon 10 and Bombardier Global 7000, can shave about an hour off the airliners’ flight times by avoiding crowded commercial airports.
Meanwhile the Aerion AS2, as designed, was supposed to fly that same route at about Mach 1.4, or between, 1,000 and 1,100 m.p.h. in about 3.5 hours. That’s a savings of four hours. That sounds great – at least until one calculates the price of those four hours saved (vs. modern long haul airliners, and three hours saved vs. conventional corporate jets).
For starters, Aerion, which started 17 years ago estimated its plane would be priced at $80 million apiece, more recently was estimating a selling price of $120 million per copy. True, that’s less than the $270 million price tag of a Boeing 787, the $320 million price of an Airbus A350, or the $350 price of a Boeing 777. But each of those behemoths carry more than 250, and up to 550 passengers vs. the 10 that the AS2 would carry. Meanwhile, each of the top-of-the-line corporate jets, all capable of carrying 50% more passengers than the AS2, cost around $80 million. And while not cheap to operate, they at least burn normal jet fuel as opposed the expensive special blends required for sustained supersonic flight.
Additionally, those big passenger planes are designed to make such long-distance flights twice a day, year-round for 25 years, while long haul corporate jets – like the AS2 – typically would make such trips much less frequently.
All of that greatly impacts the differing costs of ownership and operation and would have left owners of AS2 in a deep financial hole relative to what it would they would be spending on conventional corporate jets. True, if the AS2 delivered significantly greater efficiency for its owners than conventional business jets, it might conceivably have been a justifiable expense. In reality the only thing it would have provided its owners would have been between three and six hours per flight depending on the trip’s length. Yes, executives’ time is worth hundreds, even a few thousand dollars an hour. But the cost gap between the AS2 and conventional planes would have been many, many times larger than whatever executive time savings the AS2 might have delivered.
In short, the time savings generated by an AS2 never had a chance of offsetting the planes enormously higher purchase price and ownership/operating costs.
Add all that up, and the AS2’s economics were going to be a huge money loser relative to flying commercially, and nearly as big a money loser relative to even the most expensive conventional corporate jets flying similar missions.
Now the challenge for the remaining supersonic jet makers is clear. Boom, which is working on an 80-passenger, Mach 2 design that would be operated by airlines, Spike, which is developing another corporate jet, and Exosonic, which recently unveiled a plan for a superfast VIP jet that could serve, for example, as a supersonic Air Force One for future U.S. presidents, must all now increase their focus on the value propositions they would bring to the market. Saving important and/or wealth passengers hours of time does create significant value. But will it create enough added value to justify purchase prices 50% higher that conventional top-of-the-line corporate jets? Are those extra hours saved by supersonic jets really that valuable? Are the hours saved in flight just as productive as hours spent on the ground because those planes already are equipped with all the communications and data tools CEOs and other VIPs need to conduct business while in the air? Or are the hours saved by the supersonic jets’ speed merely hours that their passengers would be spending asleep in their hotel rooms?
Ultimately, the question is how much is an hour – or three, or four – of an executive’s time really worth? And are those savings generated by the executive flying supersonically enough to justify to way higher costs of owning, operating and maintaining a supersonic jet (or paying the presumably much higher fare of flying on a supersonic commercial jet)?
In many, maybe even most cases the real answer is likely to be “no.”
And that likely answer also is one of the likely key reasons why Airbus, Lockheed and Boeing all took a long look at the AS2 program and at Aerion itself and then withdrew from the project. It’s also likely why no other investors stepped up over the last couple of months after Aerion quietly but frantically began seeking new investors?
Therein lies the lesson for – or at least a warning to – the large crop of companies now scrambling to bring a new class of small, intra-urban aircraft to the market. More than 150 different vertical takeoff and landing aircraft – whether they get their power from electric batteries (making them eVTOLs), or conventional engines – are in development around the world. Some insist they’ll be flying within a year or two and operating commercially by 2030.
Often – and wrongly – referred to as “flying cars,” such aircraft likely will be human piloted vehicles initially but would transition into remotely controlled or even autonomously-flown vehicles as the technology advances both in the aircraft and in the low altitude air safety control network that would have to be created for them. But a bigger question than whether they’ll be flown by human pilots or operated as drones is whether any of those UAM developers can solve the same challenge that Aerion ultimately could not, and that its remaining competitors in the supersonic end of the aviation pool – Boom, Spike and Exosonic – must overcome if they’re to be successful.
Is the added value they bring to the market worth the higher costs? In the case of Aerion, the market effectively judged that the savings of several hours of executive time on occasional transcontinental flights simply wasn’t worth the added cost of owning, operating and maintaining such aircraft.
Now, the question in the case of UAM makers is whether the market can afford – and actually will pay more for the time savings provided by – low-flying – and relatively slow – UAM vehicles that skip over traffic-clogged highways? Will enough of highly paid executives’ time be saved by UAM vehicles to make low level urban flying a significant cost saver and efficiency enhancer? And will that be true in a future that, surprisingly, is likely to feature a lot more work-from-home arrangements than anyone foresaw 18 months ago before Covid-19 made tens of millions of people home-based workers?
Will paying $100 to $150 to fly from a suburban UAM vertiport to downtown in 10 minutes instead of spending an hour driving in traffic really be an efficient use of a company’s money, or of an individual’s own money? Can UAM makers and operators come up with vehicles – and the many vertiports and other pieces of infrastructure needed to support them – that can be operated for as little as $50 a ride (or maybe less), thereby making them a cost-effective alternative to driving.
If the answer to that is yes, then great; we’re headed toward an amazing future of affordable low level intra-city transportation. But if the answer is no, or even just maybe, then most or even all of the nacent UAM world could be headed for the same kind of still birth as Aerion’s Mach 1.4 AS2 supersonic passenger plane.