Q&A: OAG on why supersonic travel won’t take off

Ever since the Concorde had its last flight in 2003, the promise of transporting passengers at the speed of sound has eluded the air travel industry. But supersonic travel may be looking at a comeback.

American Airlines placed a non-refundable deposit earlier this month on 20 supersonic Overture jets from aerospace manufacturer Boom Supersonic, based in Colorado. The announcement follows United Airline’s 2021 agreement to purchase 15 Overture aircraft. Boom and Japan Airlines previously formed a strategic partnership in which JAL invested $10 million in the company.

Boom says it expects its first commercial flight to happen by the end of this decade.

The Overture jet is being designed to carry from 65 to 80 passengers at twice the speed of today’s fastest commercial aircraft, according to the company. Passengers could fly between New York and London in 3.5 hours, Miami and London in just under five hours and Los Angeles and Honolulu in three hours, Boom says.

However, the viability of supersonic passenger flights remains in question, partly due to the projected price tag of thousands of dollars per ticket.

Critics also call out supersonic jets for their environmental impact. Boom says Overture is designed to run on 100% sustainable aviation fuel. And in May, Boom announced a 10-year agreement with Climeworks, which will remove a part of Boom’s residual CO2 emissions from the atmosphere and permanently store it underground, helping Boom achieve net-zero carbon by 2025, according to the company.

Skepticism also surrounds the sonic boom, the thunderous noise made by breaking the sound barrier. Boom says the Overture will only fly over water. Exosonic, winner of Phocuswright's Battleground: The Americas 2019, is developing airliners with muted sonic booms, allowing them to fly overland.

In a Q&A with PhocusWire, John Grant, chief analyst with airline data provider OAG, explains why he thinks the future is bleak for supersonic commercial flights. The United Kingdom-based aviation analytics company collects, publishes and distributes airline schedules from every airline in the world. Grant says OAG has data going back more than 25 years on what type of aircraft were flying, the number of seats and other details – data that indicates “how history informs the future.” Answers have been edited for brevity.

What is your forecast for supersonic travel?

Grant: It will be for a very exclusive set of travelers and an even more exclusive set of routes where such services could be viable. There are very few airlines in the world that would be customers of this type of aircraft.

The commercial reality of the aircraft – and the increasing environmental constraints that industry operates in – make this a very difficult case to make for sustainable, profitable aircraft development.

Finding an alternative fuel supply that can be produced in sufficient volumes, and work and be cost effective is a challenge that really hasn’t been thought about yet.

John Grant - OAG

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The operating margins in the airline industry are extremely fragile. In a good period, the return on capital for the industry as a total is about 7% or 8%. And obviously in the last couple of years it’s been horrendously negative.

Fifty percent of airline industry profits are derived by about 20 of the world’s airlines. There are over 800 airlines operating around the world. So this is a very niche product for an already niche group of potential target airlines. You could name potential airlines that would be interested in this product on probably two hands.

Why are some major airlines investing in these jets?

Grant: Purely a desire to reserve a place in a speculative queue in case this aircraft does ever fly.

What is holding other carriers back from investing in this form of travel?

Grant: They are being realistic, and commercially, they are perhaps less excited by this opportunity because it doesn’t fit with the way the market is moving.

The concept we’re looking at here is an aircraft that will serve very niche markets and will therefore be extremely expensive to fly. And in today’s economic reality, where people are much more cost-conscious, it’s tough to see where the markets are that would support this aircraft.

If you look at the economic prognosis for the next three or four years, it is not particularly encouraging. And for the price point, it’s not worth flying supersonic.

With people paying six-figures to fly into space, why is it far-fetched to imagine people paying $4,000 to $5,000 for a 3.5-hour flight between New York and London?

Grant: There is a group of people who undoubtedly would be attracted by that proposition, but is there enough to make a business case that will cover the development costs of this aircraft?

We know from the Concorde experiences that the aircraft was very expensive to maintain. The stress on the airframe, the engineering required for it, was very intensive relative to the hours that it flew.

Is it reasonable to expect business travelers to fill these planes?

Grant: At the moment we estimate that corporate demand is probably 30% lower than it was pre-COVID. We’re hitting a recession, so what we’re seeing is people who traveled business class are now traveling in either premium economy or economy. Those that used to travel three or four times a year are only traveling two or three times a year. So in every way possible, the value of the corporate market is currently in decline.

What are the environmental challenges?

Grant: Concorde used to be cited by farmers in rural areas when sheep gave birth early due to sonic booms. Those environmental concerns are probably more pronounced now than they were 20 years ago. We are more environmentally conscious; noise and sound abatement are high on many agendas for authorities around the world. 

The ability of Concorde to fly overland became severely restricted during its lifetime. That’s why eventually it ended up primarily operating between Europe and North America – because it was only traveling over the Atlantic Ocean.

And what fuel type are supersonic jets going to use? Concorde was a very thirsty consumer of kerosene. When the airline industry is trying to reduce its carbon emission footprint, most of the industry does not want to invest in a fuel technology that is going to be criticized as adding carbon emissions. Particularly if it’s only for 80 people per flight.

Finding an alternative fuel supply that can be produced in sufficient volumes, and work and be cost effective is a challenge that really hasn’t been thought about yet.

And where would that aircraft refuel? Would it be able to refuel in a normal airport environment at a gate while people are still boarding the aircraft? There are so many questions.

What opportunity do you think supersonic technology could present for startups?

Grant: It’s just so difficult to see how this would work for a startup. A startup needs to have the lowest cost possible to be able to break into the market. It has to differentiate itself on travel and on its product offering. And the way travel has become commoditized, I think it’s very hard to see this as a potential aircraft model that would be used by startups.

What other technologies are shaping the future of travel?

Grant: I think vertical takeoff aircraft will get more traction and more interest. That is a much sweeter spot for growth in the coming years.  

Why is that?

Grant: Because the technology is proven, the cost of development is much lower, there are multiple suppliers. And it serves a much broader need and market requirements than a supersonic aircraft.

Don’t vertical aircrafts – also known as air taxis – also cater to a niche market?

Grant: Yes, but probably a factor of 10 or 20 times larger than the supersonic jet’s potential clientele.

Also, a lot of the work in vertical aircraft is around the use of batteries and electric power and rechargeable units. So I think it has a lot more of the credentials that the industry wants at the moment.