American Airlines is betting big on supersonic travel

American Airlines has posted a non-refundable deposit for 20 supersonic passenger planes that are still in design and years away from flying.

It’s unclear how long it will take for the planes to be built, let alone ready to take off with commercial passengers on board, as the planes – made by Boom Supersonic – do not yet have an engine manufacturer. Boom said he expects the planes to be operational by 2029, which would mark the first time a private company has made a supersonic aircraft.

Experts suggest the delay could be even longer, given that the US plane agreed to buy only exists in computer-generated renderings and noting the lengthy process to get federal clearance.

But other competitors are also planning supersonic passenger jets. Spike Aerospace is developing a super-fast business jet, and startup Hermeus is developing a plane that would travel five times the speed of sound.

“I would describe it as possible — I wouldn’t describe it as likely that these planes will fly by then,” Craig Jenks, president of Airline/Aircraft Projects, an airline industry consultancy, told CBS MoneyWatch. . “Everything is completely new. If you consider how long it takes to make much less original aircraft, then it would be logical to say that it would be later [than 2029].”

The amount of American’s deposit was not disclosed. The new plane, called Overture, has a list price of $200 million, but manufacturers typically give airlines deep discounts.

The deal puts American, America’s largest airline, in a position to have the largest fleet of supersonic aircraft in the world. The deal includes an option for the carrier to purchase 40 additional planes, which would carry 65 to 80 passengers, Boom Supersonic said in an announcement Tuesday.

American believes supersonic travel will play a key role for airlines.

“Looking forward, supersonic travel will be an important part of our ability to deliver to our customers,” American chief financial officer Derek Kerr said in a statement. “We are excited about how Boom will shape the future of travel, both for our business and for our customers.”

Last year, United Airlines agreed to buy 15 of the same planes.

“A lot of people got burned the first time”

Nearly 20 years have passed since the last supersonic passenger flight of Concorde, the Franco-British aircraft that failed to catch on due to stratospheric costs and safety concerns.

“The idea that you can bring back the supersonic is an exciting idea, but a lot of people got burned the first time around, especially with the cost,” Jenks said. “There’s this fantastic cost inefficiency once you break the sound barrier that you have to compensate for by having high enough rates.”

Jenks noted that American’s investment suggests the company is optimistic about a rebound in business travel from pandemic lows.

“It’s interesting that this order has come around the same time everyone is worried about the return of business travel,” he said. “It goes against the idea that people aren’t going to fly for business in the same way, or at the same volume. It’s a statement that says there will always be a premium demand and a way faster and more efficient to travel for business.”

Cost prohibitive for most flyers

A ticket to fly from New York to London in about three and a half hours will cost between $4,000 and $5,000, about 30% more than it costs today to fly the same route with a business class ticket. .

“In the 1960s, many airlines signed on to order these planes but never ended up flying them because of the cost,” travel analyst Henry Harteveldt told CBS MoneyWatch.

They are also expected to be prohibitively expensive for the majority of consumers this time around.

“The first version of this aircraft is not for the vast majority of us who sit in the back of the aircraft behind the curtain. But for senior executives and business travelers, people for whom time is money, supersonic travel can be considered very attractive,” he said.

Overture is expected to carry passengers at about twice the speed of today’s fastest commercial aircraft.

“There are tens of millions of passengers every year who travel business class on routes where Overture will provide great acceleration,” Boom CEO Blake Scholl said in an interview. He also thinks that airlines will be able to make a profit by selling tickets.

That’s if they can get their hands on the planes.

Engine specialist wanted

Boom discusses with Rolls Royce and others in its search for an engine manufacturer. Another company ambition that might not be as fast as the planes themselves: to fly planes exclusively on sustainable aviation fuel, often made from plant-based materials, which is expensive and scarce.

“I’m really surprised that American has decided to announce this given all the questions that exist about when an engine will be available for this aircraft,” Harteveldt said. “It takes many years to design, test and develop a new motor need to be sure it is safe.”

Sustainable aviation fuels are also in their infancy.

In summary: “This plane will not show up at an airport in the next few years. It’s several years away, and it’s possible that it will slide more,” he said.

Boom says the Overture program will cost between $6 billion and $8 billion.

Last month, Boom announced changes to the plane’s design to make it simpler and cheaper to build and maintain. The most striking change was the change from three engines, including a different type on the tail, to four identical engines under the delta-shaped wings.

The union representing US pilots has questioned the timing of the airline’s investment in planes that won’t be available for at least several years. American has struggled this summer, canceling more than 9,300 flights since June 1, more than double the number of cancellations at United, Delta or Southwest, according to FlightAware.

“Investing in today’s operation should be management’s sole focus,” said union spokesman Dennis Tajer. “If there are no changes to the way management plans this airline and its pilots, it will just be supersonic cancellations.”

— The Associated Press contributed to this report

First published on August 16, 2022 / 5:48 PM

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