
Boom Supersonic raises $100M, aims for 2019 test flights - yurisagalov
https://arstechnica.com/science/2019/01/supersonic-passenger-jet-firm-raises-100-million-aims-for-2019-test-flights/
======
valj
Yikes, when did HN become so full of haters? This is easily one of the most
exciting startups out there at the moment. It would be a game changer for so
many people living in Europe and Asia who would love to live outside the US
and commute to the US regularly for work.

Is it the everyman's plane? Certainly not. But it essentially makes living in
Tokyo/Hong Kong/Singapore/Sydney and working in SF much closer to living in
New York and working in SF (which a lot of senior executives and investors
do). Imagine if Australia East Coast was a 6hr flight and 5hr time difference
to SF. New York is a 6hr flight and a 3hr time difference to SF. Seems a lot
different all of a sudden doesn't it?

Focussing on gas is the complete wrong way of looking at this. Humans and our
ideas are the ultimate resource, not gas. When we work together we solve
problems, and the weapon engineer who had to relocate back to HK to raise kids
near family can often be the difference between a breakthrough we all benefit
from and nothing at all. Having these senior people able to work locally can
enable them to seed their hometowns with thriving local offices that train new
generations of talent.

Tesla won in cars and SpaceX won in rockets (both very complex industries)
over very well established incumbents. Don't underestimate how much
organizational dynamics can weigh on a company. Do you think the best people
at Boeing are going to risk the next decade of their career working on a plane
that might only do 300 orders when they could go get easy promotion working on
the next 787?

Good luck to the team at Boom!!

~~~
worldsayshi
To have any chance of taking control of our collective carbon footprint we
need to move away from technology like this not towards it.

And until we can manifest fundamentally different technology for air travel we
should collectively and rapidly scale down our dependence on long distance
commute.

Fossil fuel driven flight is not viable in a sustainable future. We need to
understand this.

~~~
btrettel
I think slower flight might be best for long distance travel. Something like
an airship. I don't know much about the technology, but my naive view is that
the technology is undervalued. An airship has VTOL, is quieter, is more
spacious, produces less carbon emissions, etc.

~~~
ghaff
Weather issues are one problem for airships. Actual ships are an option for
transatlantic routes but there is basically one limited alternative for that.
People basically want cheap and fast. Once you get beyond driving that mostly
means subsonic planes.

~~~
btrettel
Thanks, I was not aware of the weather problems.

I'd be willing to take a slower option and I think at least some others would
too as long as it's less cramped.

~~~
ghaff
International airline travel can already be pretty much as roomy as a mass of
people are willing to pay for on a route. And shifting to a slower mode of
transportation that's equally or even more roomy tends to carry a big premium
as well. Taking the train or a ship on a multi-thousand mile trip costs more
than certainly economy flying does. You can generally travel in comfort. You
just need to pay for it.

~~~
mikepurvis
My wife and I took our then-infant daughter on a 2800km train ride about five
years ago (Toronto to Saskatoon by VIA Rail). We paid extra to have sleeping
berths with meals included vs regular seats, but overall it was pretty
expensive and slow:

\- You spend a lot (would estimate 30%+) of time waiting on sidings for
freight trains to pass in the other direction because there's only a single
track owned by the freight company, so their trains get priority.

\- There's no back up plan, and only a few trips a week. Our train happened to
run on time, but I had a family member try to take it a few years later and
ended up having to cancel for refund and fly instead because the train was
running 24h late and she needed to be home for something.

\- It's priced and advertised as an "experience" comparable to going on a
cruise. They serve you nice food, but obviously the cost of all that service
is baked into the ticket— no one is pretending that you'd choose this option
just to get to your destination.

\- We got our fares for around 60% off, but it was still $450 per adult, I
think, which was a lot more than our return flights were (we could afford
neither the time nor money required to take the train in both directions).
Getting these fares required weeks of monitoring for VIA's "discount Tuesday"
promotions and then building our travel plans around the specific dates
offered.

\- No wifi or even cell reception for most of the route. The northern Ontario
section of the route is extremely remote and not at all scenic— just mile
after mile of unremarkable forest.

Maybe there's room for an option that's slightly more comfortable and slightly
slower, if that's what an airship would offer? But as far as the train goes,
it's lots more comfortable and many times slower, but there's just no way to
make the cost comparable to flying when you need to pay for all those hours of
staff and equipment.

------
jostmey
Reducing flight time is not the same as reducing travel time. The real killer
with respect to travel time are layovers airport delays. Cheaper airplanes
capable of flying farther will reduce the number of layovers, and the big
airlines know this. The market for supersonic planes will be small.

On a side note, why aren't there more startups trying to reduce passenger time
at the airport instead of focusing on faster airplanes?

~~~
mrfusion
Something as simple as valet parking could save 45 minutes! Very low tech.

~~~
telotortium
I think most people on business trips where they could be reimbursed for valet
parking at an airport probably take Uber or Lyft already, which saves the same
amount of time.

------
avar
It's somewhat out of date, but I found this ~hour long podcast interview with
the founder and CEO of Boom from August 2017 really informative:
[http://www.airplanegeeks.com/2017/08/02/463-boom-
supersonic/](http://www.airplanegeeks.com/2017/08/02/463-boom-supersonic/)

It goes into some of the technical and regulatory hurdles Boom is facing,
among other things.

------
davidivadavid
Is that nearly enough money to do what they intend?

Edit: To be clear — I find the prospect of affordable supersonic flight super
exciting. But, knowing 0 about the aviation industry, what's the secret sauce
that makes this believable (e.g. budget at least one order of magnitude lower
than competing products)?

~~~
notahacker
$100m is the sticker price for one Boeing 737, an evolutionary design with
research and manufacturing costs amortised over an order book of thousands

This is money to keep Boom afloat to the next raise, but that's not exactly
unusual in SV startups which are a lot less capital intensive than aerospace

~~~
motivated_gear
How a company begins to how it gets to sell products for $100m is fascinating.
Boeing built their first plane soley because they had bought another plane,
subsequently crashed it and then posited that it would be faster to build a
brand new plane instead of waiting for parts. They sold a couple to the navy
who then said "Yeah we'll take 50".

Obviously Boom is doing something orders of magnitude more technically complex
than a simple bi-plane but maybe, if they're scrappy enough, they can pull it
off.

[https://en.wikipedia.org/wiki/Boeing#History](https://en.wikipedia.org/wiki/Boeing#History)

~~~
notahacker
Aviation has moved on a bit since Boeing was founded over 100 years ago, and
their client base is looking for any potential vendor to be the precise
opposite of "scrappy". To put things into perspective, nearly all airlines
outside Russia and China find proven, modern, thoroughly-tested and performant
airframes from state-funded Russian and Chinese conglomerates with very
attractive pricing and financing a bit too "scrappy" in terms of the available
ongoing support for operations to even consider. A new entrant is going to
need to spend $20bn+ to get a single aircraft ready, and they they're going to
need to sell a couple of hundred to get close to breaking even. A brilliant
outcome would be a gulf state liking the novelty of the concept enough to say
"we'll take 50" and even that didn't translate to many further sales for the
A380

~~~
nostrademons
They've got LOIs for 76 aircraft @ $200M/plane from 5 airlines:

[https://www.flightglobal.com/news/articles/analysis-jal-
inve...](https://www.flightglobal.com/news/articles/analysis-jal-invests-
heavily-in-supersonic-boom-443857/)

There's certainly both technical & market risk, because an LOI != cash in the
bank. But that's why investors are willing to invest. _If_ Boom delivers on
its technical promises to spec, that $15.2B in revenue lined up before the
first prototype flies.

~~~
notahacker
It's not $15B lined up before the first prototype flies, it's $15B that might
happen, eventually, after Boom has delivered on its technical promises by
flying and certifying the airframe, _if_ the airlines at that stage decide the
finished article fits with their operations at that time, they're happy with
the operational risk and they can raise the capital to finance the aircraft
acquisitions on adequate terms.

JAL putting in $10m of seed investment is showing a _bit_ of faith, but the
rest is just pieces of paper.

Concorde had firmer commitments for 74 aircraft back in the day, but only ever
made 20, most of which were sold off at a subsidised price and spent most of
their time on the ground.

------
cyberferret
Technically, I am sure it is possible with todays manufacturing, material and
3D printing capabilities etc., but I am thinking the biggest battles Boom
faces will be regulatory.

Getting the aircraft certified by every country's aviation body is going to be
massive (unless they restrict flights to within the US only, which will
basically negate the positives of international supersonic flight).

Then there are the battles against various environmental lobbying groups, like
Concorde had to do, who will try to enforce curfews and restrictions on
supersonic flights over populated areas.

~~~
sseveran
The will not be able to fly overland in most places while going supersonic for
the foreseeable future. The real demand for this plane is going to be long
haul business travel where flights are 10+ hours and those of us doing it
regularly are already forking over 4 - 7K per ticket normally. Fortunately if
you look at the world most of the cities you will want to fly to are basically
on the coast, or a short distance inland.

------
Tuxer
Given the current emissions of air travel I find fairly repulsive to spend
that much money designing a new airplane going completely in the wrong
direction in terms of fuel efficiency. There is no way ( regardless of
altitude, unless you’re going in LEO ) to avoid the huge drag losses of going
supersonic, so most of that ticket price is going to go towards fuel.

If this ever flies and there is a kerosene carbon tax, that plane is dead.

~~~
jws
Recovering the externalities on jet fuel would only add about $0.19/gallon¹
with jet fuel going for >$4/gallon today, so say a 5% tax. I think they'd
survive just fine. In fact, if I were them I'd voluntarily and ostentatiously
pay that on every drop of fuel… supersonic and green.

Or without a carbon tax… 200 gallons of jet fuel makes 1 ton of CO2 and costs
~$800. Current state of the art in CO2 capture is $94/ton. For a self imposed
12% fuel surcharge they could be carbon neutral.

␄

¹ [http://www.rff.org/blog/2017/calculating-various-fuel-
prices...](http://www.rff.org/blog/2017/calculating-various-fuel-prices-under-
carbon-tax)

~~~
jonas21
This doesn't change your argument too much, but FYI jet fuel is currently
around $1.60/gal.

[https://www.iata.org/publications/economics/fuel-
monitor/Pag...](https://www.iata.org/publications/economics/fuel-
monitor/Pages/index.aspx)

~~~
jws
I think we are looking at different ends of the market, I'm using a search of
the retail price at airfields near me in the last 30 days. (My parameters
don't get reflected in the URL, you will need to choose some to get results.)

I suspect at "airline" scale there is a large discount over the full service
pump prices I'm seeing. This might change the percentages to 10% and 25%.

It's also possible I'm seeing the "putz price". That made up price that "no
one really pays", unless you are that guy who doesn't know better and does.

[https://www.airnav.com/fuel/local.html](https://www.airnav.com/fuel/local.html)

~~~
Tuxer
Jet-A at airfields isn't a valid measure of how much airlines. I read that
most airlines pay around 1.10$/gal for Jet-A.

~~~
njarboe
42 gallons in a barrel of oil. So the bottom price is going to be about (oil
price)/42\. Lots of complications in converting a random quality oil into jet
fuel at an airport, but at scale you might add 10% to 20%. With current oil
prices this does work out to around your $1.10/gal price.

------
danielvf
I’m always conflicted when I hear about Boom. I’m cheering for them, but I
can’t help feeling like it’s a scam. Then again, there is nothing impossible
technicaly about civilian supersonic flight...

~~~
lifekaizen
No scam, I know Blake and they’ve been in Colorado building for years. It
might not make it, but it won’t be for lack of trying or integrity.

~~~
smt88
Trying to resurrect a gas-guzzling technology in the face of irreversible
climate change is not "integrity" by any definition I've ever used.

This is a technology that could only benefit people wealthy enough to afford
it. There isn't even a nice story to tell about how it helps humans as a
whole.

~~~
motivated_gear
The R&D that went into your phone can be derived from wall street types buying
cell phones in the 90s.

As technology gets better, the probability that it will become affordable to
the masses increases greatly. It's not guaranteed, but its definitely non-
zero.

~~~
smt88
We don't even want it to become affordable to the masses because it uses
exponentially more fuel. That's part of the problem.

~~~
motivated_gear
A car consumes exponentially more fuel than a horse

------
griffinkelly
The one thing that the article doesnt mention is how Boom is going to overcome
fuel capacity issues traveling to Asia. Concorde was never intended for trans-
Pacific flight. They're going to need to either create an aerial refueling
system, or land somewhere.

------
notjustanymike
Hey if the founder of PayPal can launch his own convertible into Mars orbit,
then I can believe in the return of supersonic commercial flight!

------
speeq
Aerion is developing a supersonic (business) jet as well:
[https://www.youtube.com/watch?v=TC6utYmM4_o](https://www.youtube.com/watch?v=TC6utYmM4_o)

~~~
sierdolij
TBH: Aerion has more money, better tech and better technical, monetary and
partner backing. Boom's timeline is extremely unrealistic. Aerion will fly
around 2024 (give them an extra year as complex product timelines slip), and
they have first-mover advantage. Aerion has flown numerous airfoil cross-
sections on the bellies of research jets and is likely working on PoC for tech
& subsystems, and design. Boom's website is mostly PR & wire-frames..
ambiguously indistinguishable from a scam without seeing other forms of
validation (i.e., results (full-scale jigs in that hanger in Denver),
partnerships, hires, orders). If Boom wants to secure more funding and orders,
they're going to need publish more info to facilitate due-diligence.

[http://www.fortworthbusiness.com/news/bass-backed-aerion-
giv...](http://www.fortworthbusiness.com/news/bass-backed-aerion-gives-
roadmap-to-supersonic-goal-with-
lockheed/article_76f091cc-d0c0-11e8-85e2-d703466408c4.html)

[https://boomsupersonic.com/xb-1](https://boomsupersonic.com/xb-1) (oh boy,
strips of carbon fiber and a 1m x 3m hand-laid cross-section)

~~~
tim333
Or they could crack ahead in the manner described in the article.

------
theothermkn
What's interesting to me about this is that no major airline wants to go
supersonic, for two reasons. First, because of the cost of development, and,
second, because you lose a significant fraction of business class revenue to
your supersonic fleet, raising the costs of tickets for leisure travelers and
affecting routing. However, you don't want to be subsonic if another carrier
is supersonic, because then _they_ get your business class revenue.

It'll be interesting to see what happens if they make it.

~~~
tim333
Branson/Virgin wanted to but BA refused to sell the concordes they were
scrapping:

>Virgin described BA's refusal to sell the planes instead of retiring them for
good as "an act of industrial
vandalism",...[https://www.telegraph.co.uk/finance/2855774/Virgin-bitter-
as...](https://www.telegraph.co.uk/finance/2855774/Virgin-bitter-as-Concorde-
dream-fades.html)

Airlines don't go supersonic because there are no aircraft.

------
adpirz
Can anyone with a relevant background, a la aerospace engineering, begin to
speculate as to how this team could accomplish such lofty goals on what very
much seems like a shoestring budget? FTA, there's mention of "efficient
aerodynamics, advanced composite materials, and an efficient propulsion
system," but that seems to be the general arch of aerospace engineering anyway
-- what's the secret to 10x more efficient R&D?

~~~
nostrademons
The technology's existed since the 1960s - the Concorde flew for 27 years.
They're hiring a bunch of engineers out of existing aerospace companies to do
the actual work - these companies all know _how_ to build SSTs, they just
don't think it's _worth it_.

What's changed is the market. It wasn't economical to run the Concorde for
most of its service lifespan, because demand for fast business travel was
limited and fuel prices were high. Then globalization and income inequality
happened. There are _a lot_ of very lucrative fields right now where it's
beneficial to be in SF in the morning and Shanghai for dinner, then back to SF
for the next morning. And fuel prices are on their way back down.

They can probably build it a bit more efficiently than in the days of the
Concorde, Tu-144, and Boeing 2707, but the real driver here is the existence
of wealthy firms who will pay a lot to shlep their employees across the globe
in a day.

~~~
ridgeguy
>Then globalization and income inequality happened.

Yeah, I think this is the new driver for SST. There's now a class of customers
who can easily afford whatever the ticket price will be, so a market is
assured.

Unfortunate for those of us who would prefer not to hear sonic booms day and
night.

------
chriselles
Being an aviation buff, I think Boom Supersonic is incredibly exciting.

Being a history buff(especially aviation), I wonder where it sits in terms of
possibility <—> probability of repeating the tech industry(Microsoft related
ties) enabled Eclipse Aviation debacle.

Eclipse Aviation was founded late in the Dot Com Tech bubble with a promise of
cheaper Very Light Jet(VLJ) private ownership and air taxis.

Boom Supersonic was founded late in the current tech bubble with a promise of
faster business class/first class travel.

My primary concerns would be the fuel burn per passenger seat miles and
shorter maintenance intervals required based on current engine technology.

Is Boom SuperSonics a possible indicator of late tech bubble drawing board
excess?

I’m actually not trying to be negative, because everything beautiful, cool,
and fast is awesome.

I’m just concerned about a possible echoing of the Eclipse historical
speedbump.

------
ggm
Some people say what did for the SST/Concord/tu144 was sunk cost. I read that
BA was running at profit ignoring sunk cost when the fire blew the model
apart.

But it was a niche product. So, if boom reoccupied the niche and can leverage
the now long amortized sunk costs of supersonic research with some twists to
get fuel cost and noise under control.. maybe they can be profitable.

I'd fly in one if it made sense cost wise (frequent business traveller
intercontinental for twenty years) but I am also believing this is a terrible
model for high altitude AGW consequences

------
myrandomcomment
I make 2 week trips almost every month from the Bay Area to APAC. I waste 2-3
days in airplanes. I am all for this. It is unrealistic to think it will not
happen. The only question is will a space company get there first (virgin)
where it is up and down in less then 2 hours to the other side of the world.
Those that are making such a big issue with the CO2 lack persecptive. This
will happen. The focuse for CO2 should be on the cars on the road and the
energy plants and factories that are not green, not something that is overall
a small percent of the carbon foot print. Removed the ground transport,
factories and power plants that are not green and you are majorly net negiavte
on CO2 output. The tech for this is going to advance, period. Focus on the
things that has the largest foot print and the tech is ripe for the change
(electric cars charged by wind/solar/hydro/geothermal/nuclear power plants).

------
jayalpha
"Yikes, when did HN become so full of haters?" Well, it will likely fail. But
it is great to finance such "blue sky" projects. Only in the US.

"Focussing on gas is the complete wrong way of looking at this. Humans and our
ideas are the ultimate resource, not gas."

Some people would disagree: [https://ourfiniteworld.com/2011/02/21/there-is-
no-steady-sta...](https://ourfiniteworld.com/2011/02/21/there-is-no-steady-
state-economy-except-at-a-very-basic-level/)

------
illegalsmile
Out of the 55 people on that plane how many actually need to save 50% of the
flight time if they're already flying business or first?

Would this development not be better put towards smaller and faster planes
rather than trying to transport ~55 people at a time? Make a small passenger
jet that can do New York to London in 3 hours and it could possibly be
profitable as a niche private jet not unlike Gulf/Lear/etc...

Growing up seeing the Concorde land and take off I would love to be on a
supersonic flight at some point in my life.

~~~
nostrademons
The price point listed in the article is about $5000 for what's normally a 6+
hour flight. That much private jet time ranges for $15K-$50K, so it's a
fundamentally different market.

I'd be similarly skeptical if it was just for consumer vacations, but there
are _a lot_ of business travelers who need to attend short meetings in faraway
locations. My wife has 3 cross-country business trips scheduled this month
alone, each of which is only for 1-2 days worth of meetings but takes about 4
days including travel time. In one case, she has a meeting in San Francisco in
the morning and a dinner in NYC in the evening, and her employer's flying her
out the day before so she can _call into the SF meeting from NYC_ and still
attend the NYC dinner, because it's physically impossible to make both of
them.

It'll probably be a while before any SST is certified to travel over land, but
the demand is there. I could see this being very handy for business travelers
who regularly need to do NYC <-> London or SF <-> Tokyo <-> Shanghai.

------
Tiktaalik
Has Boom Supersonic solved the problem that when the government tested the
impact of frequent sonic booms on the populated centres in the 1960s it drove
people nuts, caused building damage, and people hated it?

[https://paleofuture.gizmodo.com/when-the-faa-blasted-
oklahom...](https://paleofuture.gizmodo.com/when-the-faa-blasted-oklahoma-
city-with-sonic-booms-for-1649589210)

I assume Boom is like so many startups in that they have ignored history and
have barreled ahead anyway.

~~~
api_or_ipa
The US has banned overland commercial supersonic flights, so yea, going cross
country is still an issue but there's still very lucrative oceanic routes that
would be unaffected. Also, there's large, sparsely settled parts of the US,
Canada and Russia that aircraft routinely fly great circle routes over where
sonic booms would be of little to no concern.

------
NoblePublius
Fly from NYC to London for $4000 in uber lux first class aboard a spacious,
comfortable 787 or A380.

Or spend 5x that to get there in half the time aboard a cramped super sonic
jet.

I don’t get it.

If you make existing planes nicer, people will complain that the ride is too
short. And it will be much, much cheaper.

------
avichal
Obligatory quarterly post from me about optimism (or lack thereof on HN)! :)

It's unfortunate that so many people come out of the woodwork to tell people
their ideas are terrible or won't work without actually understanding the
idea, technology, or risk-adjusted return that investors may be considering.
It's far far more interesting to consider how things may work or what you may
be missing. I've listed a mini-FAQ at the bottom about Boom. I'm an investor
in every Boom round, from before they were in YC so am clearly biased, but
also know the company very well.

Props to everyone in the thread who is asking genuine questions and actually
trying to understand what the team is building.

References

\-----

Dropbox launch:
[https://news.ycombinator.com/item?id=8863](https://news.ycombinator.com/item?id=8863)
Coinbase launch:
[https://news.ycombinator.com/item?id=4703443](https://news.ycombinator.com/item?id=4703443)
A 2012 thread discussing comment negativity where:
[https://news.ycombinator.com/item?id=4363717](https://news.ycombinator.com/item?id=4363717)
A classic thread from 2012 where PG talks about negative comments:
[https://news.ycombinator.com/item?id=4396747](https://news.ycombinator.com/item?id=4396747)

Mini-FAQ

\-----

1\. Isn't the most important part of reducing flight times the pre-flight
experience (security, airport delays, etc.)? Yes, you are correct. However,
the long haul international market that is about 10% of the overall number of
flights in the world is still a HUGE opportunity where the bulk of time is
spent in the air. Boom is most effective in these longer 8-hour+ flight
situations like SFO-Tokyo, LA-Syndney, etc. On these routes you would save a
day round trip. For many people an extra day in the office or an extra day
with family is a tremendous win.

Most people don't realize but travel to Hawaii 10x-ed in the decade after the
jet engine became common because Hawaii became a five hour flight from the
West Coast instead of an eight hour flight. Imagine if you could get from SFO
to Japan or China as fast as SFO-NYC.

2 - How can do this for so cheap? It will be capital intensive to get to the
final plane, probably ~$2B. Most of this can be financed with debt, however,
because there are many billions in pre-orders from airlines already. This
round gets you to fly a one-third scale version of the plane and be ready to
raise an even bigger round to build the full scale plane and get to FAA
certification in the series C.

The Boom team has been very smart in their go to market by maximizing the
amount of already FAA approved technology that goes on the first plane. For
example, the carbon fiber composite is the same as that used on the 787. Fast
tracking the components because they're already FAA approved dramatically
reduces costs.

3 - What qualifications does this team have? How can they possibly pull this
off? The team includes 80 technical experts and leaders from Airbus, Boeing,
SpaceX, Gulfstream, NASA, and Lockheed. Collectively, the team has made key
contributions to 40+ successful air and space vehicles the SpaceX Falcon 9,
Airbus A380, and the SR-71 Blackbird. The team has led the development of many
planes that have gone from 0 to FAA approved and launched.

Hope the above is helpful to people reading through and wondering how this
makes any sense. I think Boom is a once in a lifetime, category creating
company (like SpaceX or Tesla). Happy to answer more questions if you have
any.

~~~
notahacker
Appreciate conservative industries like aerospace need optimists like yourself
to back ambitious projects that Airbus and Boeing have commercial reasons to
avoid trying for themselves even if they thought they might be viable, but
point 2 of your FAQ alarms me.

~$2bn is a ludicrously small sum of capital to get a "final plane", even
compared with airframe programmes that took the 737 as a starting point and
had the relatively straightforward objective of being a 737 but a few
percentage points more fuel efficient and with a nice new cockpit. And no, you
really can't debt-finance a new aircraft research programme with outstanding
orders. Most of the money in an aircraft transaction changes hands at the
delivery stage (deposits are a small fraction of the aircraft cost, pre-
delivery payments are also a small fraction and are made in the months
immediately prior to an aircraft delivery, not as r&d funding). The airlines
usually need external financing to actually manage these payments which comes
from the asset finance arms of conservative financial institutions looking to
earn steady ROI from having assets with predictable residual values on their
balance sheet, not a punt on a research project which may or may not actually
deliver an aircraft. Boom's going to have to raise VC-type funding themselves;
the airlines can't and won't do it for them at any scale. (I used to speak
with senior executives at airlines involved in aircraft finance on a day to
day basis so I'm not just being cynical here). And please correct me if there
is undisclosed information and I am wrong on this point, but at the moment as
I understand it Boom does not have "many billions" in orders, it has non-
binding LOIs for an entirely notional 76 aircraft and $10m in equity
investment from JAL is the only financial commitment from any airline.

So I'd be extremely worried if this was the basis from which investors in
general were considering their risk-adjusted returns. I suspect this is more
your attempt at an HN-friendly summary of the prospects based on casual
conversations with employees, as someone who yourself backed the project for
other reasons at a much earlier stage. But if they were making claims about
funding much of their r&d from their order book in representations to
investors (as I said, I suspect they aren't) I'd start viewing it a Theranos-
level heist as opposed to yet another well-intentioned aerospace project full
of good engineers trying something wildly ambitious (which is where I think
they actually are).

~~~
avichal
Thanks for the thoughtful response. Obviously I won't be able to do justice to
an entire business plan in a few sentences.

They are definitely not representing their order book as the basis for a full
debt financing. I appreciate your assuming best intent as I use broad brush
strokes in the parent comment and below.

A few thoughts: \+ I think the history of startups is also one of teams
succeeding with far less capital than the incumbents. They're on track to
build the fastest civilian aircraft ever built for less than $100M raised
which speaks to their accomplishments to date. Aero is notorious for cost
overruns but their capital efficiency to date is impressive.

\+ Of course, the biggest risk is that there are cost over runs due to
unforseen issues, e.g. Bombadier's C-Series estimated to cost $2B and that
ended up closer to $5B (though that was also for multiple planes and
configurations). At the same time the A320-NEO was done for below $1.5B I
believe. Time will tell how much it actually costs but I think it's probably
much closer to $2B than say $20B.

\+ You are correct that these are not pre-orders. I shouldn't have used that
term and should have used LOIs (and now I can't figure out how to edit the
comment). As I understand it, the LOIs are of varying levels of commitment.
The earliest LOIs were non-binding and with no skin in the game. More recent
LOIs have more teeth. The strategy has been very clever. Each batch of LOIs
has terms more favorable to Boom, so there is an incentive to move before the
LOIs become less favorable to you (the airline). And there is a competitive
dynamic that is at work that engages companies, e.g. JAL vs ANA, via
incentives such as exclusivity on certain routes or deal sweeteners like the
opportunity to invest. I think it's unlikely that 100% of these LOIs convert
as external circumstances will always be a factor (e.g. airline gets a new CEO
who has a different strategy) but the newer LOIs also have significant
executive, CEO, and board buyin from the airlines, so they're certainly not
throwaway. As you noted, airlines are very conservative about basically
everything. The reason these LOIs are managing to get board level approval is
that the math makes a ton of sense if the planes fly. You're essentially
replacing less profitable narrow body jets with a Boom jet on certain routes
so you stand to make more money as an airline if you get one of these.

\+ It's much harder to debt finance the entire thing as an R&D endeavor at
once but there are multiple ways to traunch this and phase it in over time.
And not all of the costs need to borne by Boom directly. It's pretty standard
for suppliers (not the airlines, as you noted) to put up significant
commitments as part of the development process and bear those costs and risks.
Many of the existing partners for major components of the Boom plane are
bearing these costs directly already, because the math behind unlocking
supersonic makes sense and even if the plane doesn't launch they stand to
benefit from the R&D on these new components. Sharing these costs such that
the partners benefit from the upside in a success case (huge new market the
supplier is a leaders in) and in a failure case (IP that makes their existing
components much better), while also bearing the capital risk helps reduce the
capital and debt burden on Boom itself.

Anyway, your read that this is a well-intentioned aerospace project full of
great engineers trying to do something wildly ambitious is correct. Anything
I've misstated that might imply otherwise is a failure on my part, not Boom's.
I also think they are as savvy on their business as they are talented at the
engineering, which is why they've even made it this far.

------
nawgszy
I find it amusing that planes like the Concorde were shelved once and now we
have emerging businesses trying to capitalize on that dead market.

~~~
trothamel
I find it amusing that video game consoles like the Atari 2600 were shelved
once and now we have emerging businesses like Nintendo trying to capitalize on
that dead market.

------
staunch
I actually think supersonic is the opposite of the direction to take air
travel. The current speed of 500mph is already incredibly fast given the size
of the planet. Even 200mph is sufficient.

The real problem is comfort. Planes are incredibly uncomfortable, even if you
pay thousands of upgraded seating. I'd rather flights take 2-4x as long but be
10-20x more comfortable.

I'd like to see true innovation, using high-speed blimps or massive ocean-
going ground effect airplanes, hovercraft, or something.

I'd rather take 1 day "air cruise" to Europe than a 4 hour hair-raising
rollercoaster ride.

~~~
cyberferret
When I walked through Concorde (both the prototype 002 at Yeovilton Museum in
the UK and the ex-BA one at the Museum of Flight in Seattle), I was struck by
how tiny and cramped the passenger cabin was.

Personally, as attractive as supersonic flight is to a former pilot like me, I
would far rather spend time in a wide body cabin and arrive a few hours later
than suffer the claustrophobia of sitting in a skinny tube. From what I have
seen, the Boom concept jet has a similar fuselage profile to Concorde.

~~~
ghaff
My dad got switched to a Concorde once and his reaction relative to his usual
747 (probably) first class was cool to do once but meh. Less space and it got
him into London at rush hour rather than having a nice dinner on the plane.

And first class in those days, modulo first class lounge that got turned into
more business class seating at some point, was much less comfortable than
modern business class much less first class where it exists.

It would be nice if transPacific were faster (though that has its own set of
range problems) but I don't find flying business class from the US East Coast
to Europe a particular hardship.

------
ryanwaggoner
I hate being an armchair critic, but Boom brings it out in me. It’s so
arrogant to claim that you’re going to deliver a commercial supersonic
airliner for pennies in just a few years. They haven’t even flown a scale
model, built a full-scale model, etc, and they’ll need to innovate many
different areas at once, from manufacturing to aerodynamic design to
propulsion, etc. They could easily spend billions of dollars and 10-15 years
on all that _before_ they get to certification, which is _incredibly_
expensive and time-consuming. Established companies like Boeing and Airbus
that have been building jets for many decades don’t have a magic wand, and it
takes them much longer and more money to incrementally improve their planes,
not to mention entering an entirely new category where tons of innovation is
required.

Why are people so convinced some random startup with no experience is going to
be able to do the impossible? It’s not enough to point at SpaceX and say “they
did it, so we can too!” It’s a totally different product category, market, and
regulatory environment.

I wish there was a way to short the stock of private companies.

~~~
Xixi
There's no technical reason that prevents Airbus or Boeing from building a
supersonic airliner. The problem is not the supersonic plane itself, that's 70
years old tech: it's the cost of operating one profitably. Supersonic jets are
gas-guzzlers while the airline industry is a low-margin industry. If airlines
can't turn a supersonic airliner in a money printing machine then there's no
business case in building one to begin with.

~~~
ghaff
I would even go out on a limb and say that _someday_ supersonic flight will be
so relatively near to the economics of subsonic flight that it's often the
norm. (In the same way that, in the US, you don't see a lot of props on
regional flights any longer.) [ADDED: And yeah much higher drag at higher
velocities, etc. but let's stipulate "tech."]

However, it's a huge economic hill to climb. Long haul flying is already
pretty comfortable if you spend the money. Even on _United_ which has been
upgrading domestic routes. Of course, faster is better. But lie flat seating,
decent food, and even mini-rooms go a long way towards making lengthy flights
comfortable.

So you basically have to get close to those price points, which is the high
end of the volume market. A few hours aren't worth that much even to most
relatively wealthy folks.

~~~
FiveSquared25
They are if you paying millions a year. Athletes, big corporates, etc.

~~~
ghaff
Those aren't the high-end of the volume market. They're the private jet market
which is circa an order of magnitude more expensive and correspondingly
smaller.

