Lockheed Tries New Tack -- WSJ

12/16/17 02:47 AM EST
By Doug Cameron 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (December 16, 2017).

Lockheed Martin Corp., maker of the world's first business jet, is planning a return to the passenger-aircraft business after a two-decade gap with a new supersonic plane.

The world's largest defense company by sales said Friday that it is considering a joint venture with privately owned Aerion Corp., an aerospace firm that aims to have a new supersonic business jet in operation by 2025.

"We see civil supersonic aviation as an emerging and potentially substantial opportunity," said Orlando Carvalho, executive vice president of Lockheed's aeronautics unit. Mr. Carvalho said Lockheed will spend a year considering whether to help build the 12-passenger AS2 jet.

The project is one of three vying to fill the void created when the supersonic Concorde passenger jet quit flying in 2003 following a fatal crash in Paris. Boom Technology Inc. last week said it secured investment from Japan Airlines Co. for a 48-seat supersonic jet. Boston-based Spike Aerospace Inc. has been touting its proposed S-512 jet at trade shows.

Lockheed was once among the largest passenger aircraft manufacturers, and in 1961 introduced the Jetstar business jet, converting a design originally aimed at the military market for commercial use.

The company's role in the commercial market waned in the 1970s after its L-1011 Tristar wide-body jet failed to gain traction against rival planes built by Boeing Co. and McDonnell Douglas Corp, which merged in 1997. The last Tristar was delivered in 1984.

If Lockheed proceeds in the new supersonic project with Aerion, one option would be to build the jets at the company's plant in Greenville, S.C., where it produces F-16 combat jets and military cargo aircraft.

The AS2 would have a range of 4,750 nautical miles at up to 1.5 times the speed of sound, cutting the flying time between London and New York from seven hours to 4 1/2 . Aerion executives estimate it will cost $4 billion to develop. Private-equity billionaire and aerospace enthusiast Robert Bass has provided an undisclosed amount of funding.

Aerion has an order for 20 of the planned planes from aircraft-sharing specialist Flexjet LLC, though the deposits can be refunded. Brian Barents, Aerion's executive chairman, forecast demand for 300 of the jets over the next decade. First planners need to convince skeptical buyers and regulators that supersonic jets deserve a second chance.

The biggest hurdle remains a ban on commercial jets flying at supersonic speeds over the continental U.S., largely because of the distinctive boom they make when they exceed the speed of sound. Other countries also require ultrafast planes to spend as much time as possible over the ocean. Lockheed and others are working to make the booms quieter.

Richard Aboulafia, an aerospace analyst at the Teal Group, said Lockheed may be able to help Aerion find military customers for the jet as well as business clients. Aerion had previously partnered with Airbus SE on the AS2 development, but the European plane maker has turned back to projects including passenger-carrying drones and electrically powered jets.

"Lockheed makes more sense as a partner than a civil aerospace firm," he said. "The military market will be a key demand segment."

Write to Doug Cameron at doug.cameron@wsj.com


(END) Dow Jones Newswires

December 16, 2017 02:47 ET (07:47 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.