The announcement earlier this week that bizjet lift supplier NetJets had bought 20 of Aerion’s Supersonic AS2 SSBBJ (supersonic business jet) seems to have changed the shape of business aviation. Nothing could be further from the truth.
I’ve seen countless big deals over the years for fleet purchases by companies like NetJets for large numbers of new aircraft. Those deals are often given a dollar value, let’s say, $2.1 billion dollars. The press conferences and releases are always careful to say it like this, that the deal is “valued at” a certain amount of money. What does this mean? Typically, it means that if you took a deal for 50 aircraft that retail for $35 million apiece, that deal might be valued at $1.75 billion, or more, depending on what kinds of extras, like service or warranties are training are included. That final number, however, is sheer fantasy. First off, big companies making fleet deals don’t pay retail, for obvious reasons. With occasional exceptions for highly sought-after planes, the customer in a fleet deal has the majority of the power. I’d argue that this is how it should be.
What, then, is the real number? I have no idea. Almost no one does, because those numbers are never shared… I went back and forth on saying “almost never,” but I stuck with simply never. If other, single-aircraft customers were to know how much of a discount the fleet buyers got, well, that would give them a huge negotiating edge, though the savviest of them likely have some idea.
So that’s all context for the big announcement of the 20 supersonic business jet deal. Here’s some more context.
Nobody has any idea when or even if the Aerion SSBJ will start being delivered to customers, a phase that is of critical importance to life providers like NetJets. We don’t know when that will happen for a couple of very good reasons. First, the airplane has never flown, and that’s for another very good reason. It doesn’t yet exist. It’s coming along, we’re told, but in time for the targe first-delivery date of 2025? I am literally LOL here at the thought.
There not only isn’t a supersonic bizjet to begin flight trials, there’s not even much in the way of regulatory know how on the subject, at least on this side of the Atlantic. The FAA has pushed through some relaxed rules on making booms while test flying, but I’d have argued that there was no hurry to do so. I would love to be proven wrong here, but four years is beyond light speed by aircraft certification standards. And there’s not even a completed, yet alone a flying supersonic anything yet. Again, I’ll be the first to admit I was wrong if I wind up being wrong, which I’m not worried about because I won’t be.
So, why then did NetJets spend oodles of dough on a big order of supersonic bizjets? Because they didn’t. There wasn’t even the pretense of the “deal valued at” language. It was just an agreement in theory, most likely a memorandum of understanding. So the amount of money involved in such a deal? I’ve known of cases where the amount was $1. Not one-million dollars… one dollar.
So what’s the point? Advertising, is my best guess. Getting ink splashed about your business is usually a pretty expensive undertaking. In this case, it might have cost as little as a dollar. Indeed, if the expenditures were more than that, they might have over budgeted.
Do I think that supersonic business jets are a possibility? I do. There are huge obstacles to their adoption, however, but perhaps that’s a discussion for a later time, when there is even one such aircraft ready to fly.