Aerion encouraged by ongoing OEM discussions

Aerion continues in serious and detailed discussions with potential OEM manufacturing partners.

The company expects discussions to lead to a joint Aerion-OEM design study—a proofof- concept phase—after which partners would jointly decide whether to move forward with full-scale development and production. The POC phase is expected to last nine to 12 months.

"We are confident we will reach an agreement with an OEM," said Aerion Vice Chairman Brian Barents. "The challenges are many, but there is a desire on the part of all parties to make this happen."

"This would represent the first joint civil supersonic development program in 47 years, and the last was a result of a treaty between two nations, so I think it is fair to say a new agreement would be historic—and one driven entirely by market dynamics," he added.

"We know there is a lot of speculation about when such an agreement will be signed," Barents said, "and we have tried to manage expectations. These are complex discussions involving many technical and business issues. What we can say is that they are moving in the right direction."

Aerion has stated previously that a successful proof-of-concept phase would be followed by a five-year development program culminating in certification and entry into service. In all likelihood, that would put the certification date for the Aerion aircraft in 2015. Barents noted two positive economic signs for the program: the Aerion order book has held steady at approximately $4 billion (with a unit cost of $80 million); and OEMs have remained committed to pressing ahead with discussions at a time of economic uncertainty.

"Both customers and OEMs are looking beyond the current economic turmoil," said Barents. "OEMs understand that they need to think five to ten years ahead and have new products in the pipeline. And a supersonic jet is the most exciting product you can think of."