June 13, 2018 / 9:10 AM / 6 months ago

Aerion signs up supersonic business jet customers ahead of greenlighting project -exec

* Project backed by Lockheed Martin, GE

* First deliveries expected by early 2026

* Wealthy individuals agreeing provisional purchases

By Jamie Freed

SINGAPORE, June 13 (Reuters) - Aerion Supersonic, the developer of a $120 million supersonic business jet, has signed provisional purchase contracts with wealthy customers as it looks to greenlight the project over the next 18-24 months, a senior executive said.

U.S.-based Aerion, which is working with Lockheed Martin Corp and GE on development of the jet, is aiming for first deliveries to customers in late 2025 or early 2026, chief commercial officer Ernie Edwards said on Wednesday.

"Today we are taking letters of intent which is just essentially buying a slot in the queue," he told Reuters of customer contracts, declining to say how many had been signed to date. "It is the ultra-high net worth individuals that we are going after."

The United States, Europe and the Middle East have proven the most promising markets to date, with Asia lagging in demand because it has a less mature business jet market, Edwards, who was attending a corporate jet conference in Singapore, said.

Firm sales contracts, including non-refundable deposits will be signed after development hurdles are met over the next 18-24 months, he said.

Aerion, chaired by billionaire Robert Bass, is one of a new breed of developers pursuing supersonic jet projects 15 years after the retirement of the Concorde. Its project is more advanced than those of rivals Spike Aerospace Inc and Boom Technology Inc which have yet to select engines.

Aerion plans to use a modified version of a GE engine core used in Boeing Co 737 jets to help cut down on costs and is aiming for a top speed of Mach 1.4, above the Mach 0.9 speed of rival subsonic business jets. That would cut the flying time from New York to London by nearly two hours.

At $120 million, the 8- to 11-seat Aerion AS2 jet is costlier than similarly sized subsonic rivals like the $72 million Bombardier Inc Global 7500 and the $70 million General Dynamics Corp Gulfstream G650ER.

The AS2 will also have a lower maximum range at 4,200 nautical miles at Mach 1.4 and 5,300 nautical miles (7,778 kilometres) at Mach 0.95, compared to at least 7,500 nautical miles for the Global 7500 and the G650ER.

Market studies have shown demand for 600 supersonic business jets over 20 years, and Aerion has so far not received pushback from customers despite the higher price because private jets are highly discretionary luxury purchases, Edwards said.

"The analogy I draw is some of the fast cars that are out there - some of them cost twice as much or three times as much or five times as much as another," he said. "The customer buys what he wants to buy." (Reporting by Jamie Freed; Editing by Muralikumar Anantharaman)

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