Florida Today, CNBC, and numerous news outlets are reporting that Aerion Supersonic is in the process of shutting down after failing to obtain additional financing needed to produce the Aerion AS2. An announcement of the winding down of the company was not featured on Aerion’s website; however, all job postings have been removed from the website.
The news comes as a surprise as the company had been touting its new Aerion AS3 as its Mach 4+ airplane of the future. In addition, Aerion Corporation had entered into a Memorandum of Understanding (MoU) with NetJets for 20 Aerion AS2 jets in March. Everything was looking like things were moving forward for the company.
According to an email statement from the company, that FlyRadius has not seen, Aerion was not able to obtain the large financing that it needed to put the AS2 into production. Aerion had been on a capital-raising run that included a potential SPAC deal with Altitude Acquisition Corp. Financial markets have changed since the SPAC deal was covered by the media in February of 2021. Inflation has started to have a strong impact on prices and product and raw material shortages are affecting numerous industries.
Aerion was Affected by Changes in the Economy
The rapid change in the economic climate from February to May is likely the main reason that Aerion was not able to obtain the financing that it needed to continue forward with the launch of the AS2 jet. The increase in raw materials costs may have caused the company’s costs to build Aerion Park (HQ) and the facilities needed to manufacture the jet to increase substantially. The effects of inflation have also caused changes in the way investors look at investments. Stocks have started to enter into a flat trend as concerns about inflation have become one of the main topics that investors are focusing on. Aerion Supersonic can be considered to be a speculative investment as it is working on pioneering an untested product. The speculative nature of the AS2 jet combined with the inflationary environment were the probable reasons behind Aerion’s inability to obtain continued financing.
It will have to be seen what happens to Aerion’s intellectual property. Will Aerion continue in some form to continue the significant work on bringing a supersonic jet to market? Aerion has been vague on what are the next steps are for the company.
Supersonic flight has taken a step back as a result of Aerion’s downfall.
Above is a photo of the Aerion AS2 flying over Hong Kong.