2 hours ago, Luke said:

Do you have a citation for that $10m number?

 

UA not AA. 

https://simpleflying.com/united-airlines-flying-taxi-downpayment/

 

2 hours ago, Luke said:

I would imagine they have done a significant amount of consideration for the viability, and that directly affects how much money actually changes hands (hint: it's not much).

 

You don't know that Luke. AA haven't disclosed how much they have paid as a deposit. Lets state definitively "it isn't much" when we know. And if that day comes we will have to define what "not much" is. 

Anyway, Virgin Atlantic are pretty optimistic, they have been partners with Boom since 2016. 

 

2 hours ago, Luke said:

The reason for that is that the success rate is very, very low

 

You can blame very low success rates if you like, and it would be the right strategy for you given the opinion you are promoting,  but given that the same scepticism cynicism  applies to pretty much anything debated on a forum, I favour human psychology and the phenomenon of the "armchair expert".

And in this case, without having any inside knowledge of the concept, the deals made, deposits paid, engineers evaluations,  commercial viability assessments or anything lese, they think they have  the answers and can make definitive statements. It happens all the time on forums with everything from scientific theories, to the latest environmental issue, to new EV battery tech, to nutritional advice and pretty much everything else. 

Some people are more prone to cynicism and will atomically look for the negatives and expect failure, conspiracy and nefarious activity.  

Some personality types will be like mine, keep an open mind, given the limited information available, not positive not negative, neutral, but interested to see where it could lead.

Some personality types will be overly enthusiastic and claim its the best thing since sliced bread and bound to be a roaring success.

Maybe we should be asking ourselves the results of our the Myers-Briggs test rather than the viability of Mr Boom. 🤔

 

You are getting old and cynical Luke. Not young and optimistic like me. 😺

Edited August 19, 20223 yr by martin-w

4 hours ago, Luke said:

This is fundamentally a play in the premium or ultra-premium market - and there is a major limit on that market's size. If Delta could fit an A339 with an all-D1 cabin they'd do so in a heartbeat because the profit margins on those fares are so huge.

Very good point.

I've often wondered why there isn't an airline that specifically caters to the premium market - not luxurious, small private jets for the very wealthy, but semi-luxurious, large jets for folks who can afford first class.

The airline would use large airliners like an A330 or 757/767, but only have around 100-150 very comfortable seats, a lounge/bar area, great meals, and first class service.

There isn't, probably because it wouldn't be profitable.

Having said that, what Boom has going for it is that the trip time would be about 40% shorter.

Dave

Edited August 19, 20223 yr by dave2013

5 hours ago, martin-w said:

You don't know that Luke. AA haven't disclosed how much they have paid as a deposit. Lets state definitively "it isn't much" when we know. And if that day comes we will have to define what "not much" is. 

And in this case, without having any inside knowledge of the concept, the deals made, deposits paid, engineers evaluations,  commercial viability assessments or anything lese, they think they have  the answers and can make definitive statements. It happens all the time on forums with everything from scientific theories, to the latest environmental issue, to new EV battery tech, to nutritional advice and pretty much everything else. 

It's ironic that you are criticizing me for being pessimistic in the absence of any information while cheerfully drawing all sorts of optimistic conclusions based on the same lack of evidence. I'm simply going on the fact that marketers are optimists - all of the good news is contained within the press release. If they don't quote refundability or amounts (like the AA release) then they're probably not much to cheer about.

If you do want to extrapolate with some data, I'd love for you or anyone else to chime in as to what delivery slots and deposits go for in existing, certified aircraft. What percentage of the purchase price do I need to put down in advance in order to get a finished, certified aircraft such as an A321neo, an A330-900 or a 787-8, and what conditions are attached? Because that's really your upper bound - it's pretty low risk as in the aircraft actually exists and has passed regulatory muster. Anything else is going to be some fraction of that percentage, commensurate with the risk of not being available for sale or use in the time frame expected by the airline. (Which is why I would be shocked if a "non-refundable" deposit didn't have an escape clause requiring FAA, JAA or whatever regulator the purchaser cared about approval by a certain date, or money back).

It's no different than you or me. How much money would you put down as a deposit for a revolutionary transport vehicle (a flying car, let's say) that doesn't exist and may not be legal to operate in your jurisdiction? Having the optionality of an early purchase has a non-zero value, but the risk of not actually getting anything causes a very high discount rate to be applied, and you'd probably insist on any money put forward to require a finished, legal vehicle by some set date.

Because as you point out to me, the airlines aren't dumb. You don't go around writing blank checks in that business based on hopes and dreams. We had that in the 1980s with deregulation, and most of those types ended up in receivership. 🙂

Cheers!

1 hour ago, dave2013 said:

I've often wondered why there isn't an airline that specifically caters to the premium market - not luxurious, small private jets for the very wealthy, but semi-luxurious, large jets for folks who can afford first class. The airline would use large airliners like an A330 or 757/767, but only have around 100-150 very comfortable seats, a lounge/bar area, great meals, and first class service.

You raise what I think is the other challenge Boom faces - in that market, the hard/soft product is very important.

I've flown Delta One and Virgin Upper Class to Europe (albeit not on their latest seats). If I'm going to be paying $3k+ for a flight, there better be a lie-flat seat, good food (with multiple choices selected in advance), lounge access and the whole civilized flying experience. If I'm flying ATL to ZRH for example, I'd happily take a direct flight in D1 on an A339 even if it takes me longer, than a M1.7 flight in a worse hard product that might stop in CDG or AMS (and all the potential chaos that could entail).

That is the other challenge - the premium market in aggregate may be big enough (let's say ATL to Europe) but it's split between LHR, CDG, AMS and a bunch of other destinations and people are going to put a premium on direct flights, schedules and a better hard product. I don't think there's room for a regular 100 seats at that price level to any given destination. The only route where I saw it working regularly was BA's JFK-LCY-SNN-JFK route with the A318, but if memory serves correctly that no longer exists, either.

2 hours ago, dave2013 said:

Having said that, what Boom has going for it is that the trip time would be about 40% shorter.

The one area I see as a potential for supersonic transport is trans-Pacific. Half the time from LAX to NRT or SYD is probably worth paying for, but I'm also not sure as to the size of the market.

Cheers!

15 hours ago, Luke said:

It's ironic that you are criticizing me for being pessimistic in the absence of any information while cheerfully drawing all sorts of optimistic conclusions based on the same lack of evidence.

 

I'm not being overly optimistic at all. As I said, I'm neutral. None of us know if this project will be successful or not. We will only know in hindsight.

I've not said it's the greatest thing since sliced bread and must succeed and I've not implied, like you, that the deposit is a pittance because the companies aren't enthusiastic about it, and are only involved for publicity. Do you see that the truth is probably somewhere in the middle?

 I've not made overly optimistic predictions based on no evidence, I've not made predictions at all, that's a mischaracterization. What I've done is disagree with the "forum armchair expert", overly sceptical, borderline cynical mindset that we see all the time on forums, and I've provided alternate scenarios. Remember, I only commented in the first place because someone said nobody whizzes across the Atlantic for business anymore and someone else queried viable routes, and somebody then queried why they were bothering in that case... So I pointed out that Boom will have evaluated the viability of routes and so will the airlines. I then posted a link to the proposed 600 routes. 

 You began on page one by wondering how much the deposit was, fair enough, but you've progressed regressed from that by claiming you know it's minimal, and claiming its likely all just for "airline publicity". We simply don't know, we aren't psychic, Boom may be successful and they may fail. If I were to rate their chances of success I would "guess" it to be 50%, seems to me you would be more like 5%. I'm neutral, you are biased against. 

 You see, we can claim it's all a publicity exercise for the airlines, destined to fail and a pittance paid as a deposit if we like, that's one way of looking at it, but on the other hand we can consider that Virgin have been involved right from the beginning, I think 2016, and haven't just invested in the company but are providing manufacturing facilities and are joining forces with Boom to build and test the aircraft. We can also consider that if this is some kind of publicity stunt by Virgin its a dreadful one, because myself and most people weren't even aware they were involved. Hence little value to the company. And of course Virgin are developing their own supersonic jet so don't need the "publicity" from backing another company that's doing the same.

 My attitude is to keep an open mind and see where it leads and not to be overly enthusiastic or to adopt the typical forum armchair expert, "it won't succeed, the deposit is a pittance because the airlines don't really have much faith in it and are doing it for publicity, there aren't any routes, environmentally friendly is a lie" mentality. 

$247 million is their current funding I believe, including £60 million from the US military. Maybe they will succeed, maybe they won't. Same applies to the three other companies also attempting to develop a supersonic passenger airliner. 

Its your right to hold whatever opinion you like and be as negative as you like but personally I'll keep an open mind continue to be neutral, unbiased, and see where it leads. 

Edited August 20, 20223 yr by martin-w

On 8/18/2022 at 5:01 AM, cmpbellsjc said:

According to the article below, the tickets when they plane is due to be in service by 2029, will be $4000 to $5000 for New York to London in 3-1/2 hours.

When I fly from JFK to Paris on a 787 it only takes about 6 hours and I can get a business class ticket for half that price. 
 

 

Apparently that will be the initial ticket price but they hope to get the ticket price down to economy levels. Seems a very big ask, but we shall see.

They've achieved "unicorn" staus so valued at greater than one billion dollars.

Some impresive board members.

https://investmentu.com/boom-supersonic-stock-ipo/

Edited August 20, 20223 yr by martin-w