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ANALYSIS: HAV poised to launch Airlander 10 production

Do not write off the world's largest aircraft yet. A little over a year after a second flight-test accident left its lighter-than-air hybrid airship deflated, Hybrid Air Vehicles (HAV) is ready to begin production of its Airlander 10, and is talking to five "early adopters" – two from the commercial world and three in defence and security – about becoming launch operator.

The Bedford-based start-up believes it has the building blocks in place, with production organisation approval from the UK Civil Aviation Authority awarded at the end of 2018, following European Aviation Safety Agency design organisation approval two months earlier.

If chief executive Stephen McGlennan's hopes of finding that elusive first customer are realised, it will be a remarkable turnaround for a company backed by dozens of enthusiast shareholders, as well as several high-net-worth individuals that has already defied sceptics several times.

After six years ago buying back a design commissioned by the US military for a programme that was shortly scrapped, HAV went on to produce a commercial prototype, and fly the 92m (300ft)-long, helium-filled structure six times between 2016 and 2017 from the historic airship hangars at Cardington. It survived not one, but two serious flight-test mishaps.

MAKING PROGRESS

The business has moved from its original base to a new industrial unit in Bedford, where 65 staff are finalising plans for a production version and trying to secure a breakthrough order. Once achieved – McGlennan says HAV is working on the assumption of an initial three-aircraft deal – the firm will move into a new assembly hangar that will need to be at least 30m high, 30m wide, and 110m long to accommodate the giant aircraft.

Entry into service, he says, could come within 48 months of an order, although a military customer could put the Airlander 10 into operation earlier, without commercial type certification.

After marketing Airlander 10 as primarily a long-endurance surveillance platform, or potentially a transport for outsize heavy cargo to hard-to-access locations, HAV has begun to focus more on the high-end leisure market.

This is the only sector where German airship maker Zeppelin has found a modern-day – albeit limited – customer base, although McGlennan believes the Airlander 10 hybrid can offer something very different. At the July 2018 Farnborough air show, the firm revealed, using virtual reality, a luxury concept interior, in association with design firm Design Q, capable of carrying 19 passengers.

The team in Bedford is now constructing a 10m-long mock-up of the gondola, which could end up, says McGlennan, with eight suites, suitable for 16 guests on longer voyages, or as a "luxury restaurant", pitched at carrying 40 passengers on 3-4h trips around the Alps or Dubai. HAV is talking to "two of the big cruise companies, plus several tour operators and hotel groups", he adds.

While these businesses would not necessarily look to "putting a novel asset on their balance sheet", says McGlennan, HAV will probably partner with "bodies of capital", such as a sovereign wealth fund, prepared to purchase one of the £50 million ($66 million) aircraft in exchange for "lease cash flow".

In terms of HAV's own finances, McGlennan says there is money to keep the company ticking over until it can raise funds from a launch order. This is despite the 2017 crash ending a plan to use the prototype to generate revenue from companies using it to trial airborne equipment and services.

Beginning in 2007, when the US Department of Defense (DoD) commissioned the design for the later cancelled long-endurance, multi-intelligence vehicle programme, the business has raised and spent £113 million. This included £62 million from the DoD, £21 million of private equity and some UK government research funding.

INSURANCE PAY-OUT

The company decided to use £20 million insurance pay out from the 2017 incident to equip its new factory and team to build a production aircraft, rather than resurrect the damaged prototype and continue testing. "By that stage, with around 15h of flying, we felt we were about 80% of the way to what we would ever know," says McGlennan.

"So we asked ourselves, did we need to rebuild to get that other 20%, or could we spend it more efficiently? The insurance money has given us a period of real stability after putting all our efforts into flying the prototype to consolidate what we learned and market to a select customer base, who really need a multi-year sales campaign."

McGlennan draws an undulating line rising left to right on his office whiteboard. "Sometimes you can look at our story and see lots of ups and downs. Yes, we have had days that have been great, and others that have been challenging, but we have gone from having a small-scale demonstrator in 2007 to TRL [technology readiness level] 7 in 2019," he says, referring to the third-highest level in the standard method of assessing the industrial maturity of new products.

"We built a full-scale prototype and now we are ready to build our first production model. It's an upward trajectory – a wiggly one – but a positive trajectory all the same."

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