Trouble brews for Boom Supersonic as engine makers prove elusive
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There has been a lot of hype over the past couple of years to reintroduce commercial supersonic travel by the end of the decade. One of the most promising contenders, high-flying startup Boom Supersonic, recently inked an agreement to sell 20 Overture planes to American Airlines (NASDAQ:AAL), just a year after signing a similar deal with United (NASDAQ:UAL). The Overture is set to carry 65 to 80 passengers and fly as fast as Mach 1.7 (1,304 mph) to cut trans-Atlantic and trans-Pacific flight times dramatically.
The problem: Finding an engine manufacturer. Rolls-Royce (OTCPK:RYCEY) just announced it would exit the project after having completed various engineering studies. Following the comments, GE Aviation (NYSE:GE), Honeywell (NASDAQ:HON), and Safran Aircraft Engines (OTCPK:SAFRY) also confirmed that they were not interested in making a supersonic engine for Boom. Meanwhile, Raytheon's (NYSE:RTX) Pratt & Whitney, another company capable of making such an engine, called the plans "tangential" to its business.
"Boom has stated it wants its aircraft to be as environmentally responsible as it can be, which is a noble and critically important objective, but it is already hard enough and expensive enough for Boom to build the airplane," noted Henry Harteveldt, travel analyst at Atmosphere Research Group. However, if Boom could successfully build both a plane and engine, it could become an acquisition target for aerospace companies like Boeing (NYSE:BA) or Airbus (OTCPK:EADSY). The firm could alternatively sell its engine design for a pretty penny, or cash in on the "boom" by profiting off the resumption in commercial supersonic travel.
Fun facts: While there have been many supersonic military aircraft, the only models to carry civilian passengers were the Concorde and the Russian-built Tupolev Tu-144. The Concorde went out of service in 2003, weighed down by high expenses and a fatal crash in 2000 that prompted the model to be grounded, while the Tu-144 had limited service and retired in 1999. Commercial supersonic travel was such a hot topic when it developed in the 1960s that Seattle named its NBA franchise the "SuperSonics" after Boeing's (BA) supersonic transport project, which was later canceled.