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ANALYSIS: JAL invests heavily in supersonic Boom

Japan Airlines has agreed to invest $10 million in Colorado-based Boom Supersonic and pre-order up to 20 of the Mach 2.2-capable airliners scheduled to enter service in the mid-2020s.

The decision makes JAL the second identified Boom customer after a commitment by Virgin Group in November 2016 to order up to 10 aircraft. A total of five airlines, including JAL and Virgin, have committed to buy up to 76 Boom airliners. Boom has previously disclosed that at least one of the unidentified customers is based in Europe.

But the $10 million investment makes JAL the first carrier to buy a stake in the small start-up, based in Hangar 14 at Centennial Airport outside Denver. The Spaceship Company, a subsidiary of Richard Branson’s Virgin Group, also has agreed to provide Boom with engineering, manufacturing and flight-test services.

The investment appears to fit JAL’s strategy of investing in adjacent markets to offset lost revenues as major competitors – such as United Airlines and Cathay Pacific – offer more transpacific non-stop flights, overflying the Oneworld alliance carrier’s hub in Tokyo.

JAL’s investment raises Boom’s overall capital to $51 million, including a $33 million Series A round completed last March involving several venture funds, such as Continuity Fund, RRE Ventures, Palm Drive Ventures, 8VC and Caffeinated Capital.

“We’re not going to need more money for a while now. We’re quite well-funded,” Boom chief executive Blake Scholl tells FlightGlobal.

The additional capital is enough to build and complete testing of the single-seat XB-1 “Baby Boom” demonstrator aircraft, which is scheduled to start flying next year, Scholl says. The funding also allows Boom to start early design work on the 55-seat commercial product, he adds.

More importantly, JAL’s $10 million investment represents the first financial commitment in Boom by an end-user, Scholl says. It is also a rare example of a major airline investing significant cash in a start-up manufacturer. That relationship could help Boom’s credibility as it seeks to recruit key suppliers, especially for the 55-seat aircraft’s propulsion system.

The XB-1, a stepping-stone for a start-up entering the supersonic field from scratch, will be powered by three GE Aviation J85-21 jet engines. The full-scale airliner will require three much larger engines. Boom has not released a thrust specification, but Scholl confirms that 15,000-20,000lb thrust for each engine is in “the right ballpark”. To save fuel, engines must be designed to reach Mach 2.2 without afterburners.

Multiple engine companies have formed teams to respond to Boom’s request for proposals, Scholl says. A derivative of an existing commercial turbofan engine and a clean-sheet represents a billion-dollar investment by the engine manufacturer in development and testing. But the potential bidders are intrigued by the revenue opportunities of a three-engined aircraft with shorter maintenance intervals than subsonic jets, Scholl says.

Having JAL as an investor and committed buyer “underscores the reality of the market opportunity” for engine suppliers, Scholl says.

The company also is dealing with regulatory obstacles. Boom’s business plan assumes supersonic operations only over water or unpopulated areas, so the company is not relying on relief from US and European bans on generating a sonic boom over land. But the noise created by supersonic-class engines on take-off pose a major problem.

Two US Senators – Mike Lee and Cory Garner – have intervened on Boom’s behalf in a proposed amendment to the US Federal Aviation Administration re-authorisation bill.

The legislation would exempt supersonic aircraft from the FAA’s Stage 5 noise regulations, which take effect on 1 January. If passed, Boom claims the legislation would reduce the airliner’s fuel consumption by 20-30% through the use of narrower engines optimised for acceleration over limiting noise on take-off.

The exemption would be an interim measure, Scholl says, as Boom continues to work with the ICAO on a harmonised global standard for regulating community noise created by supersonic aircraft.

Economics, however, might be Boom’s biggest hurdle. The British Aerospace-Aerospatiale Concorde was doomed as a commercial product because of its operating economics, and Scholl wants to avoid repeating the mistake. By relying on non-afterburning engines, composite structures and existing technology, the Boom airliner will be designed to operate at a quarter of the costs of Concorde.

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