A new age of supersonic passenger travel took another step closer to becoming a reality at the Farnborough International Air Show.
Boom Supersonic, which plans to build the first commercial supersonic airliner in more than two decades, presented an update to its ambitious plans on Tuesday.
“As we stand here at Farnborough in 2024, it’s now been two decades since either Boeing or Airbus has launched an all-new airliner programme,” said Blake Scholl, founder and chief executive of Boom.
“We are in danger of going a generation without any new airliners. We’ve stopped progressing and, in many ways, we’ve gone backwards.
“So, today, it’s all about speed, It’s about accelerating the supersonic renaissance.”
Referring to the dominance of Boeing and Airbus in the commercial aerospace industry, Mr Scholl added that passengers are were “not well-served by the duopoly we have today”.
He also announced that Boom’s XB-1 aircraft, the first independently developed supersonic jet that is being used to develop the design and systems for Boom’s supersonic passenger plane, the Overture, will be taking to the skies for a second series of tests as early as this week and will be “on track to break the sound barrier later this year”.
The last supersonic passenger aircraft to whisk travellers from London to New York in under three hours was the ill-fated Concorde, the majestic Anglo-French plane, one of which crashed at an airport in Paris in July 2000.
Within four years, all Concordes had been grounded and taken out of service, not because of the crash, but due to economics – the Concorde used far more fuel than a Boeing 747 would have done between London and New York.
Lower seat prices
However, Boom is looking to reintroduce supersonic flight to the travelling public at far lower prices than the handful of senior business executives and celebrities who travelled on Concorde would have paid.
“We’re starting with Overture 1, which is an all-business class supersonic airliner for transoceanic flying at fares 75 per cent lower than what it took to fly on Concorde,” Mr Scholl said.
By the time Concorde stopped flying in 2003, a return flight was in the order of $12,000. Basically, Boom wants a ticket on Overture to be comparable to what it costs to fly business class on a normal subsonic passenger jet.
“Airlines are excited,” Mr Scholl said. “We’ve announced over 130 aircraft on order and pre-order with some of the world’s best airlines like United, American and Japan Airlines. But we’re just getting started.”
But Mr Scholl told the Farnborough Air Show that the demand for supersonic travel was coming from travellers and that 97 per cent of passengers were” looking forward to supersonic flight”.
“Remarkably, 87 per cent would switch away from their preferred airline, walk away from their frequent flyer miles and switch to a different airline to access supersonic flight,” he said.
“This means that supersonic flight is going to provide a competitive advantage to early adopter airlines.
“Each year, tens of millions of passengers fly in first class or business class on routes where Overture could fly faster and more profitably. To carry these passengers, supersonic airlines are going to need well over 1,000 Overture aircraft.”
Flight decks and engines
Boom also revealed the Overture’s flight deck for the first time at Farnborough on Tuesday – gone are the “hundreds of fiddly, physical controls”, with the deck being built around four “gorgeous” 17-inch touch displays.
“The Overture flight deck is about a marriage of hardware and software – a union of pilot and machine,” Mr Scholl said.
Former Concorde pilot, Mike Bannister, who was at the helm of the last Concorde flight before the 2000 crash, said he had “absolute confidence” the plane would have “the best flight deck in the world”.
Meanwhile, Boom also announced that the engines for the Overture, called Symphony, will be built by the company and its partner, StandardAero, at a factory in Texas.
“We’re all about speed and execution,” said Russ Ford, chairman and chief executive of Standard Aero, who went on to compare the magnitude of Boom’s endeavours with the Moon landings, and said they were “no less profound to the future of flight”.
Nonetheless, despite the startling ambition of those involved in Boom’s supersonic project, many remain cynical.
Two years ago, Boom parted company with Rolls-Royce, which was exploring the idea of making the engines for the Overture.
After all, the British engineering company made the Olympus engines that powered the Concorde.
At the time, Boom said Rolls-Royce’s “proposed engine design and legacy business model is not the best option for Overture’s future airline operators or passengers”.
For its part, Rolls-Royce said it had determined that the commercial aviation supersonic market was “not currently a priority”.
The ending of that relationship was what spurred Boom on to create an engine of its own and it is this can-do attitude that has impressed investors.
Mr Scholl is confident that a fully certified Overture could well be the centre of attention at the next Farnborough Air Show in two years’ time.
He pointed out that the speed of flight increased exponentially from its infancy to the jet age – from just a few miles an hour to 80 per cent of the speed of sound with the Boeing 707 in the 1960s.
“But now it’s been longer from the 707 to the present day than it was from the Wright Flyer to the [Boeing] 707.
“If we’d continued that trend in speed, we’d all be enjoyed flights above Mach-5 right now. But instead, speed flatlined. Today’s latest generation airliners are no faster than those that first carried us into the jet age.”
“On the journey to faster speeds, we’ve lost 50 years.”
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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