Tag Archives for supersonic.
No one will invest in building an engine for Boom Supersonic. So they’re going to fund the development themselves. They’ve raised money in a ‘down round’ to pay for this. Two years ago they’d supposedly come to an agreement with three companies to provide an engine.
Ahead of Tuesday’s planned announcement, Jon Ostrower breaks news about the identities of Boom Aerospace engine providers.
They couldn’t get any of the big engine manufacturers to bite, because no one thinks this project will succeed commercially. If everyone is wrong, and if the smaller players turn out to have the expertise, this would be a huge win all-around. But probabilities are stacked against success.
It’s possible to build a supersonic plane, but efficiencies and regulation killed the Concorde. Boom can presumably develop a plane, and a top engine manufacturer can produce an engine for it. But will it sell to airlines who see themselves able to operate enough of the planes, to enough places, with enough frequency – given a market that will pay a premium for the option – in order to buy enough planes and engines where the whole thing works out as a business? Engines can cost billions of dollars to design and tens of millions of dollars apiece to purchase.
Last summer United Airlines placed an order with Boom Aerospace for supersonic jets. Now American Airlines has placed an order, too. American claims they’ll have the biggest fleet of supersonic jets since their order is for 5 more planes than United’s.
American made a non-refundable deposit on the first 20. It’s unclear what non-refundable means: probably non-refundable in the case Boom Aerospace winds up in bankruptcy, but non-refundable if there’s never an engine for the plane?
Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel -- a topic he has covered since 2002.
Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »
