Supersonic Private Jet Manufacturer Aerion’s Future In Doubt

Despite accumulating an $11.2 billion sales backlog, including potential twin commitments of 20 AS2 supersonic private jets from NetJets and Flexjet, Aerion will cease operations unless it finds an 11th-hour white knight. Multiple sources say the Aerion has been telling customers that several financing deals had fallen through and it would cease operations.

In a written statement, the company said, ‘The AS2 supersonic business jet program meets all market, technical, regulatory and sustainability requirements and the market for a new supersonic segment of general aviation has been validated with $11.2 billion in sales backlog for the AS2. However, in the current financial environment, it has proven hugely challenging to close on the scheduled and necessary large new capital requirements to finalize the transition of the AS2 into production. Given these conditions, the Aerion Corporation is now taking the appropriate steps in consideration of this ongoing financial environment.”

Earlier today, everything seemed like business as usual. A post this morning on its Twitter account boasted, “As part of our sustainability efforts, we plan to aid the Earth’s natural carbon capture system by committing to plant 100 million trees by 2036.”

Now, the future for both the trees and their supersonic jets looks uncertain. The AS2 was supposed to reach speeds of 1,000 miles per hour with a range of 4,200 nautical miles. Designed to seat between eight and ten passengers, it would have cut travel time between New York and London to just over three hours.

With a sticker price of $120 million, it appears Aerion had commitments for at least 93 aircraft. However, one source said only a small amount of money had to be put up, and that those funds were held separately and not used for operations, so they will be returned.

In March, Aerion announced plans for the AS3, a bigger and faster version of the AS2 that would cut flying time across the Atlantic to just one hour and carry 50 passengers.

Aerion was founded in 2003, backed by Robert Bass (Forbes #550; Net Worth: $5 billion). In February 2019, Boeing said it “made a significant investment in Aerion to accelerate technology development and aircraft design, and unlock supersonic air travel for new markets.” Two months later, the Federal Aviation Administration ordered the grounding of Boeing’s 737 MAX. By December, Boeing had a new CEO as Dennis Muilenberg, exited.

Last April, Enterprise Florida announced Aerion was relocating from Reno, Nevada, to Melbourne, Florida. The $300 million project was expected to generate 675 jobs by 2026.

There hasn’t been a commercial supersonic travel option since 2003, when British Airways retired its Concorde fleet.

Neither NetJets nor Flexjet had announced any details on how they planned to market and sell the AS2. Both sell fractional shares starting with a 1/16^th ownership slice, which provides 50 flight hours per year. For the AS2, that would mean a purchase price of $7.5 million. Fractional share contracts typically run three to five years. Share owners then pay a monthly management fee, plus a contracted hourly rate, plus fuel surcharge, and other incidental expenses when they fly.

The news of Aerion’s possible demise was first reported by Private Jet Card Comparisons earlier today.

Update @8:49 PM on May 21: “Flexjet ordered its AS2’s from Aerion Supersonic in 2015 and the company has been a supporter of the program since then. We were particularly impressed with the recent design changes and innovations generated by Tom Vice and his current team. While we are disappointed to hear from the company that they are ceasing operations, we understand the vast investment required by such programs to bring them to fruition and the inherent risks involved,” says Directional Aviation principal Kenn Ricci, controlling owner of Flexjet.