Boeing-backed supersonic aircraft manufacturer Aerion (Reno/Tahoe) has ceased operations after failing to secure new capital in the current economic environment, the company announced.

With Boeing's financial and technical support, the Reno, Nevada-based company was building a 12-passenger supersonic jet, the AS2, capable of reaching a speed of Mach 1.4 or 1,610km per hour, which is 70% faster than conventional business jets. Production of the AS2 was slated to begin in 2023, followed by the first flight in 2025 and service entry in 2027. “In the current financial environment, it has proven hugely challenging to close on the scheduled and necessary large new capital requirements to finalise the transition of the AS2 into production,” Aerion said in a statement.

Boeing had reportedly invested several hundred million dollars for a 40% stake and had appointed two out of five board positions at Aerion in terms of a 2019 partnership to provide engineering, manufacturing, and flight test resources to bring the AS2 to market.

“While we are disappointed Aerion could not secure additional funding to continue their work, we remain committed to working with innovative and creative partners who, like Aerion, continue to push limits on groundbreaking technology,” Boeing said in a statement.

Boeing closed its Boeing NeXt innovation division in September 2020, just over two years since it launched the venture in July 2018. The move then already raised questions about whether Boeing would continue its investment in Aerion’s AS2 programme. The closure was in response to heavy financial losses sustained in the wake of the B737 MAX grounding and the COVID-19 crisis.

“The AS2 supersonic business jet programme meets all market, technical, regulatory, and sustainability requirements, and the market for a new supersonic segment of general aviation has been validated with USD11.2 billion in sales backlog for the AS2,” the Aerion statement read. “Given these conditions, the Aerion Corporation is now taking the appropriate steps in consideration of this ongoing financial environment.”

The news came less than two months after Aerion in March had announced plans for the larger, near-hypersonic AS3 airliner, as well as collaborations with NASA (United States of America) on those technologies.

The supersonic developer also had scored major orders and letters of intent from companies, including Flexjet (LXJ, Cleveland Cuyahoga Country) and NetJets Aviation (EJA, Columbus John Glenn, OH). As recent as March 4, 2021, Aerion revealed it had received a purchase order valued at USD2.4 billion for twenty AS2s from NetJets, with each aircraft valued at USD120 million.

It also followed a series of announcements detailing firmed-up supplier relationships for the AS2. The project was backed by several major aerospace prime contractors, including Honeywell Aviation Services (Morristown Municipal), Spirit AeroSystems, GE Aviation Materials, Safran, and GKN Aerospace.

In December 2020, Aerion broke ground on a USD300 million head-office complex in Melbourne, FL that would have housed facilities for the research, design, production, and interior completions of the AS2 and future hypersonic aircraft.

“Flexjet ordered its AS2’s from Aerion Supersonic in 2015, and the company has been a supporter of the programme since then," responded Kenn Ricci, principal at Flexjet parent Directional Aviation. "We were particularly impressed with the recent design changes and innovations generated by [Aerion Chairperson, president, and Chief Executive Officer] Tom Vice and his current team. While we are disappointed to hear from the company that they are ceasing operations, we understand the vast investment required by such programmes to bring them to fruition and the inherent risks involved.”

Aerion did not elaborate on its future beyond the statement. “The Aerion Corporation has assembled a world-class team of employees and partners, and we are very proud of our collective efforts to realise a shared vision of revolutionising global mobility with sustainable supersonic flight,” the statement said. “Since our company’s formation, our team has created disruptive new innovations plus leading-edge technologies and intellectual property."

Founded in 2003 to develop new, more efficient aerodynamic technologies for supersonic aircraft, Aerion introduced its AS2 12-passenger business jet design in 2014. The company unveiled the AS2's GE Affinity engine design in 2018.