Supersonic transport maker Aerion has collapsed. The technology they developed needs to go on.
Episode Summary:
It’s incredibly hard to develop a new aircraft. Do it without the resources of a major airplane company and to simultaneously develop radical new technologies in aerodynamics, propulsion and fuels would seem an almost impossible task. For Reno, Nevada based Aerion Supersonic, it was.
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Transcript of the week’s show:
If you let Hollywood script the future, it would always look like Iron Man. A single individual, a rebel, out to destroy paradigms and disrupt industries with some radical innovation. It has a long history, from Newcomen and Watt to Edison, Ford and today to Gates and Musk. Of course, history is written by the victors, and we don’t often talk about those deep fly balls that get caught at the warning track. One very exciting and highly promising start-up folded this week, Aerion. You can’t say this company wasn’t thinking big. The intention was to start with CO2 neutral supersonic flight with an airframe quiet enough to allow overland operation and culminating with near hypersonic passenger travel point-to-point between any two major cities in three hours or less. The idea was Mach 4+ travel, something never demonstrated for sustained flight and at the very limit of current propulsion and airframe technology. Founded by Robert Bass in 2004, the company’s initial product was to be a 10-passenger business jet operating without afterburners and generating little of the traditional sonic boom of traditional supersonic aircraft. The company had considerable expertise with aerodynamics, specifically natural laminar flow technology, essential for high efficiency flight. The company thought big, and it had big backers, including Boeing, but this week, the cash simply ran out. While that’s sad, it’s also common, particularly in the aerospace industry. If you want a difficult challenge, start up an aircraft business. The product is safety critical, heavily regulated, requires skilled expertise in manufacturing and quality assurance, and must be operated by trained personnel. Volumes are limited, and the product is expensive. And to cap it all off, the product takes so long to bring to market, that market conditions can change dramatically between product design and delivery. This problem affects majors like Boeing and Airbus, who have credit facilities that let them weather almost any storm, but for small firms, it’s deadly. It’s hard enough to get a small trainer launched, but to develop an advanced airframe, integrate turbojet power, then deliver sustained, economical, and green supersonic flight in a certified aircraft that can be operated by conventional pilots and use standard runways will be a challenge for aerospace major, let alone a start-up. At the time of their collapse, company order book stood at 93, at a price of 120 million dollars per aircraft, an order backlog of just over $11 billion. The company estimated that it would need $4 billion to complete certification and begin series production. Why do these failures happen? Some say it’s bad luck, bad timing, inadequate financing or technology or marketing, but I think it’s none of those things. Aerion had experienced management, investment from one of the biggest aerospace firms in the world, and proven technology in the key area critical to low noise, low drag supersonic flight: aerodynamics. I think that failures like this are caused by trying to do too many things all at the same time. No afterburner “super cruise” is itself a challenge. Low noise supersonic flight is another. Sustainable jet fuel production from sequestered atmospheric CO2 is yet another. And near hypersonic flight in the Mach 4+ regime is technically harder than launching rockets into orbit. Did Aerion simply bite off more than they could chew? But if there are two key takeaways from this collapse that are important, they are this: one. Great technology, sound management and a well-developed business plan is no guarantee of success. And two, the high risk, high reward world of advanced engineering is like playing the stock market. When big, lose big. If only they could have built a prototype and demonstrated the potential. I hope the technology will be picked up by Boeing or another aircraft company and developed to the point where we can all enjoy Concorde like air travel. It was so close, but no cigar.
