No supersonic jet for you

[RobertGary1]

On 5/24/2021 at 12:58 PM, Mark89114 said:

It amazes me that they are able to raise that kind of funding on unproven concepts, management team, market studies, etc....unless they are complete BS'ers....

You know what they say to get a small fortune in aviation, start with a large one.

 

Investors know that rewards are on par with risk. There is a part of a wealthy person's portfolio for the 1/10,000 chance if the payoff could be massive.

 

-robert

[EricJ]

8 minutes ago, RobertGary1 said:

Investors know that rewards are on par with risk. There is a part of a wealthy person's portfolio for the 1/10,000 chance if the payoff could be massive.

 

-robert

I suspect many think the likelihood of a massive payoff here is pretty low.   They're shooting at a pretty small market with a very capital-intensive program.   So it requires a lot of money at high risk with little expectation of high reward.   That's the least attractive corner for many investors, especially if something doesn't smell quite right with either the technology or the management or regulators or whatever.

 

[RobertGary1]

Just now, EricJ said:

I suspect many think the likelihood of a massive payoff here is pretty low.   They're shooting at a pretty small market with a very capital-intensive program.   So it requires a lot of money at high risk with little expectation of high reward.   That's the least attractive corner for many investors, especially if something doesn't smell quite right with either the technology or the management or regulators or whatever.

 

The high risk, low reward potential investor? Unless its SpaceX for the greater of mankind I doubt that is the calculous. 

-Robert

[carusoam]

Assume there is value for somebody...

would the marketing guys at Continental/United get enough value out of it?

They seem to be OK putting their i-logo on the side of this i-plane... 

Probably only spending i-money at this point...

Best regards,

-a- 

[AH-1 Cobra Pilot]

2 hours ago, N201MKTurbo said:

They say they are using carbon neutral fuel, which is BS BTW. If they use biofuel they may claim to be carbon neutral, but there is no such biofuel available. All biofuels use large amounts of fossil fuel to plant, harvest, transport and process. There has never been a biofuel with a net positive energy production.

Then there is the cost.  A Navy friend was the project officer for renewable fuel in Naval Aviation.  He said the F-18 did fine burning the $27/gallon biofuel.

[WilliamR]

Investors in Aerion and like projects with like sizes are typically large aerospace companies looking to get some new piece of technology out of the overall project, not necessarily needing to see the project to the end.  Second group of investors are typically funds that have already met their hurdles or already have very successful funds with some successful investments so another $50MM isn't that much and the risk is well diversified.  Get a couple funds putting in $50MM and suddenly you've made up half your $1 Bn capital raise.  Individual direct investors make up a very small percentage of these type of capital raises. 

The pitch to the fund committee goes like this; The fund is now easily over it's return hurdle.  This speculative project only needs $50MM from us and x, y, z funds are also expecting to put in as much.  We don't want to loose out do we?  Our capital is almost free at this point.  So, why not?  Besides, the project has GE, Boeing, and has some gv't grants, too.  

William

[WilliamR]

Oh, and the funds aren't really counting on the project coming to fruition.  They're investing hoping that the other investors like GE, Being, etc just simply buys out the project at a nice multiple.

[Awful_Charlie]

Whenever I hear "Boom" I am just waiting to hear "Bust". Don't get me wrong, I'd love them to succeed, but a stake in the ground for what to expect can be shown by the necessary resources and costs of Concorde some 60 years ago (3.4Billion GBP)

[carusoam]

Looks like United may have a contract for 15 of these things...

Is that enough to start building the first one?

The Concordes worked well for those elite travelers...

So... will the previous Concorde owners pony up for this new plane?

While testing how well it works for the greater number of overland routes..

Best regards,

-a-

[AH-1 Cobra Pilot]

52 minutes ago, Awful_Charlie said:

Whenever I hear "Boom" I am just waiting to hear "Bust". Don't get me wrong, I'd love them to succeed, but a stake in the ground for what to expect can be shown by the necessary resources and costs of Concorde some 60 years ago (3.4Billion GBP)

Are you an economist?

[A64Pilot]

Concorde was a passenger aircraft, I don’t think any of these types are. Concorde of course never came close to breaking even, government subsidized transportation for the rich and famous

There are some incredibly rich people out there, enough I believe to pay for a not so small run of these things.

 I remember when the Gulfstream 650 was being Certified that Gulfstream had sold several years of production, prior to Certification, and the production line was already building them as fast as they could. Any aircraft built prior to Certification, the FAA has to do the production test flight, at the time the Government didn’t have enough money to rent a car or airplane for their test pilot to get to Gulfstream, so Gulfstream flew fhe 650’s one at a time to him.

‘The 650 sold without a interior etc for 65 mil a copy, and several brought way more than that because they had been bought to sell, sort of like Super bowl  tickets.

‘I woudnt be surprised if they are still sold out.

[M20F]

Any supersonic plane is going to have the same issue as the A380 only worse.  There are so few routes to use it on, you can’t sell enough to ever recoup investment costs.