The concept of Aerion’s supersonic business jet (SBJ) designed to fly executives at nearly twice the speed of today’s aircraft was unveiled in 2004. At EBACE 2010, Top Flight met with Aerion Corporation Chief Financial Officer Douglas Nichols to learn more about the program.

What is the current status of the project?

The current status is that Aerion is still here. We have been working in recent years on both technical and commercial fronts. On the technical side we’ve been deeply engaged with several potential Aerion partners in technical evaluations of the aerodynamics, configuration and performance of the aircraft. We’re addressing a number of issues that always arise in the early stages of a new airplane program and we are presenting engineering solutions to them. So we’re really quite pleased with where we are today on technical discussions.

What is the current stage of the development?

We have been continuing our preliminary design activities. So we’re focusing still on aerodynamic optimization of the wing, the fuselage, the engine inlets and nozzles. And we’re spending an increasing amount of time dealing with issues relating to aerostructures, systems and performance. So we’re in the evolutionary stage at the early phase of the program.

Have you already started the detailed design?

We’ve not yet begun a detail design activity. That actually will occur after we formally launch the program. So we’re in the precursor stage, technical evaluation, and engagement with the potential suppliers and partners on terms of defining the right configuration requirements.

But does that mean that you have already rearranged the initial configuration of the Aerion?

We had made small changes to the main wing planform in terms of the sweep angle, thickness and area of the wing - all flowing from optimization, finding the optimum balance between the aerodynamic performance and interaction with fuselage. We are also evaluating certain design changes to the empennage to find the best balance between low and high speed performance.

Have you gained any significant changes in the performance due to the optimization then?

No, I would say generally there were no major changes at all in the expected performance of the aircraft. Obviously as we’re refining the aircraft, we will get a better understanding of the low speed and the high-speed characteristics.

Have you already studied the materials that would be utilized in the structure of the Aerion?

We always planned for the wing to be made of a carbon fiber, because the wing is very thin and it must be very stiff. I think as we have progressed in the preliminary design stage we may likely increase the composites utilization and we may possibly consider carbon fiber for the entire fuselage. It’s a matter of trade-offs between many factors including weight, strength, manufacturing costs, and other factors.

Does that mean you will skip utilization of the titanium alloys?

We will have titanium at the leading edges of the wings and in other structural areas where the strength/weight ratio of titanium is most advantageous. The metals were necessary but in terms of the weight, stiffness and other factors that we’re securing, carbon fiber quite possibly could be preferable for the entire aircraft. But final decision has not been made.

Aerion is a state of the art airplane. So our potential partners have to be quite experienced in the design and manufacturing processes. The ultimate OEM partner will be principally involved in the final engineering trade-off decision about performance, weight, materials and systems.

Can you unveil the names of the companies who may be considered as the contractors?

We’ve had very productive discussions with all the major OEM manufacturers. We’re unable now to disclose the names of the companies with whom we are working most closely because we have mutual non-disclosure agreements. We asked them and they asked us to respect the privacy of those discussions.

Has Aerion been affected by the financial crisis?

The financial situation of the last couple of years has not really affected Aerion very much at all in terms of the work we are doing. It has affected potential teaming partners in terms of their own business: backlogs, order books, rate of the production, financial profitability and cash flow. So the worldwide financial situation has really impacted the decision-making capability of the potential OEM partners and has changed the priorities of some from long-term product development to more near term ones.

But can you attract their attention nowadays?

As we see the signs of recovery the situation is starting to change. OEMs know that they need to continuously refresh their product lines, thinking about their long-term strategic product portfolio. Manufacturers recognize that the next aviation frontier is efficient and practical supersonic flight. And they all recognize that the Aerion technical solution is viable, efficient and practical. They know the attractiveness of the Aerion and the market space.

The main question has been about the priorities of the OEMs in terms of their current business base, ability to invest not only the financial recourses, but also the ability to commit the human engineering resources to the project.

Many aircraft OEMs are engaged in development programs and their financial and human abilities have been fully committed. That is starting to relax a bit now as development programs move more towards to testing and certification. So actually it’s an encouraging time for us in terms of availability of more resources that could be devoted to programs such as ours.

Can you give any promising schedule of the development?

Well we’ve always maintained that the development program for this airplane from launch until certification and entry into the service will be approximately five years. Experience from many development programs that I and other members of our management team have been involved with all suggest approximately five years. So it’s really up to our future OEM partners as to when they are prepared to enter into a hard launch of the program and then commit to a five-year time frame. Our expectations are that around 2016 this airplane will be ready for certification.

I really worry that the manufacturers could consider Aerion as the airplane that could ruin the market. It could affect their own business and destroy the domination of the Castles with wings.

In our research we have talked to dozens and dozens of business aircraft operators and in fact they all tell us that for them it is not an either-or choice. Aerion’s SBJ would be an addition to the current planes that they’re operating. They see this aircraft fulfilling different missions. This airplane brings a whole new market to the OEM’s that isn’t present today. But it doesn’t necessarily harm the existing portfolios. We don’t see our airplane as negating any particular product line. The lucky manufacturer that actually teams with us will actually find that Aerion’s SBJ is an opportunity to attract additional market share. Most operators will add the Aerion SBJ to what they already have.

But would you be able to keep the brand Aerion?

Obviously the OEM will have a lion’s share of the decision. We see the Aerion brand tied to our technology - to supersonic natural laminar flow. The name “Aerion” by itself will carry forward but it’s highly likely that the airplane will be branded by the OEM partner we team with.

Will you be involved in the sales then?

Well, quite possibly. All of those commercial matters need to be discussed. Aerion is a high technology engineering company. And our value, which we add to the ultimate joint venture with the OEM, is the technology itself. We do have a large customer base with deposit-backed orders that we will bring to the joint venture too. But we principally bring the advanced aerodynamic engineering capability and the supersonic expertise. The OEM brings all of the other things required: the infrastructure, the processes, certification, in-service support, tools, and sales and marketing. And then together synergistically we can bring the airplane to the market.

And what is the current backlog of the company?

Our backlog expressed in 2007 dollars is still steady at billion plus. So it’s really fifty aircraft.

Does that mean that you are keeping the same price - 80 million dollars per unit?

It’s the price in 2007 dollars. We haven’t changed it yet. We have many interested buyers.

Have you lost any potential customers due to the crisis?

We‘ve lost a few orders, but we gained new ones too. This is a remarkable thing. In this period of extensive downturn where all the business aircraft manufacturers have seen contract cancellations, Aerion has remained stable: strong interest, strong financial backing from our supporters, and a growing internationally-dispersed population of buyers who are eager and ready for this aircraft.

What’s the main application of the Aerion?

Our SBJ is a business jet intended to carry 8 to 12 passengers 4,000+ nautical miles. So it’s principally designed to be used in the same way that business aircraft of this class are used by high net-worth individuals, heads of corporations, potentially heads of state and governmental services, and fleet operators with no limitations. We expect in the future to talk with fractional and charter operators who have expressed real interest in the Aerion SBJ. This jet will be found in all areas of the market.

Do you plan to utilize the Aerion for the transatlantic flights mainly?

The most important fact is that we have a maximum range at both high subsonic and supersonic speed – this “dual sweet spot” gives tremendous flexibility in terms of utilization of the aircraft.

Our airplane technology has a maximum range at subsonic speed at Mach 0.95 – so it can be US transcontinental or at M1.4 that makes it possible to fly transatlantic nonstop or transpacific with one stop.

Have you already figured out any particular difference in your clientele?

This is a very high-end airplane and the people that express interest are sophisticated buyers products. They understand the value of time and the ability to fly twice as fast compared to other aircraft today is very compelling to them.

Have you monitored the activity of your competitors?

Our view is that there’s no competing aircraft for Aerion’s SBJ in the near term. The beauty of Aerion supersonic natural laminar flow technology is that this airplane can be produced today: with today’s engines, systems, technology, materials and regulations. So it’s a sophisticated airplane, but in relative terms also a low risk airplane for the next frontier supersonic flight. The other supersonic concepts are based on unproven technologies that require much heavier aircraft and all-new engines with higher thrust than the PWJT8D-200 series engine that we are using. And higher thrust and higher gross weight mean longer runways and more noise. So the competing concepts are still theoretical and have a lot of research to go into them. They are truly paper projects and a long way off. They also depend on relaxation in laws and regulations that won’t happen for at least 10 years if at all. And then once the viability of their concept is demonstrated, it may take another five to seven years to build and certify an aircraft. So we’re 14 to 20 years ahead of those other concepts. Our view and that of the OEM manufacturers we’re speaking with is – our technology is here and now. It allows Aerion’s SBJ to enter the market in about five years, while the other concepts and technologies may be a decade or more after that.