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Friday, March 1, 2024

NC trend: Triad’s main airport may soar with Boom Supersonic

Boom Supersonic wants to assemble its super-fast, 88-seat Overture jets at Piedmont Triad International Airport, a clear confirmation of Guilford County’s emergence as an aerospace industry hotspot. 

The $500 million investment sounds like a dream come true for the First in Flight state and passengers who want to scoot from New York to London in three-and-a-half hours instead of six.

Boom Supersonic jetBut don’t book that flight quite yet. Boom’s ability to deliver on its exciting promise hinges on solving difficult economic and environmental challenges.

The manufacturer’s proposal was hailed at a Jan. 26 event featuring North Carolina’s top politicians, Gov. Roy Cooper and legislative leaders Tim Moore and Phil Berger. The Denver-based company has pledged to employ as many as 2,300 workers, with an average annual salary of nearly $69,000 by 2032. Employees would build jets that cut flight time sharply at fares comparable to those charged for first-class business cabin seats. 

To help win Boom’s commitment, the state set aside $107 million for the airport to grade and add infrastructure on hundreds of acres including property where Boom plans an assembly plant. North Carolina has also pledged $87 million in a Job Development Investment Grant provided Boom creates at least 1,761 jobs and invests $500 million over 20 years. Jobs will average nearly $68,000 annually, Boom officials say.

At the 2017 Paris Air Show, CEO Blake Scholl said Boom’s supersonic jet could be in service by 2023.  He also cited a required $6 billion investment, implying significant outside financing, says Seth Miller, a New Hampshire-based industry analyst and journalist who has followed Boom for five years. Since then, Boom has disclosed  orders from several operators including United Airlines, which wants 15 jets. Boom now projects supersonic travel in 2029.

“You don’t have an engineering plan, you don’t have a factory, you don’t have the funding to build the factory,” Miller notes. “So how do you transition from a cool set of renderings to
actual assembly?”

“Blake tells the story very well, but ultimately there are various major milestones in the development of a new commercial aircraft program that have yet to be realized,” he adds. “And they have not hit any of the big public ones.”

Boom sent this comment via email: “We are on schedule with our Overture program, however we are being less open with our process for competitive and security purposes. We will reveal further information publicly when we are able to do so without risking security. United, JAL and the [U.S. Air Force] have voted with their funds based on information we’ve shared publicly.” 

North Carolina vetted Boom, of course, and is proud to have defeated rival bids from Jacksonville, Fla., and Greenville, S.C. But the state structured the transaction to limit its financial risk. The approved $107 million “is hedged because the state has required that anything that gets done will have an alternative utility,” says PTI Executive Director Kevin Baker. “If, for whatever reason, we don’t have [Boom], the facility will be available for use by other aerospace manufacturing or as a hangar for a [maintenance, repair and overhaul] organization.”

The investment is advancing plans that PTI has been developing for many years. It has resulted in more than 8,600 jobs at the airport, about 90% related to building new jets at Honda Aircraft or servicing older ones at Haeco and Cessna or FedEx’s package-delivery operation. The airport offers about three dozen flights a day by four airlines, much less passenger service than at the Charlotte and Raleigh-Durham airports. “This investment will allow us to get to the next level,” Baker says.

Boom has backing “from some pretty impressive people in the industry who know what they are doing,” says Mike Fox, president of the Greensboro-based Piedmont Triad Partnership, which promotes economic development.  “Any new aircraft is far from a done deal, but we expect that Boom will make steady progress.” 

Boom has raised more than $240 million from about 30 investors, according to the Crunchbase fundraising website. They include American Express’ venture arm and Menlo Park, Calif.-based Celesta Capital. Boom President Kathy Savitt said the company has raised $300 million, plus much more in debt financing, during a podcast interview with New York University Professor Scott Galloway.

Interestingly, Boom’s major challenges aren’t engineering-related. “They know how to build it, and the physics is pretty straightforward,” Miller says. French and British manufacturers partnered to create the Concorde supersonic jet that Air France and British Airways flew between 1976 and 2003. 

“But the reason there is skepticism is that it is a terribly inefficient aircraft” because so much fuel is required, he says. Moreover, analysts have questioned the level of demand and whether airports will reject the service because of the noise of supersonic flights.

Boom says it will use sustainable aviation fuel and that no more than twice as much fuel will be used by its jets as conventional aircraft. It estimates there will be a market for about 700 jets in 2035, according to the Wall Street Journal. 

But UBS analyst Myles Walton projects peak demand of 171 aircraft, while the International Council on Clean Transportation, which studies green energy use, expects no more than 30 sales, the newspaper reported in February. Fourteen Concorde jets entered commercial service during its  three-decade run.

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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