[bell-cot]

My understanding is that the only profitable part of being a modern commercial jet engine manufacturer is service contracts - on actually-in-service jet engines. Vs. Boom Supersonic has never built a plane which actually managed to take off. And even their 1/3-scale "technology demonstrator" plane is 5+ years behind its original schedule. (And has yet to taxi along a runway, if I read Wikipedia right.)

My guess - Boom wanted RR to sign a new money-losing or zero-profit R&D deal. RR wasn't interested in the "maybe, eventually, there might be some actual profit for us" economics of that.

[jjk166]

Well all planes that haven't been developed yet are not in service, and development cycles for jet engines are always long. Investing in engine R&D is standard practice. While Boom doesn't have a fleet of aircraft at the moment, it didn't 2 years ago either, but it does have orders. While of course those orders don't mean much if Boom can't ultimately deliver and sunk cost is not a good reason to continue a venture, the fact that RR entered into the agreement in the first place suggests they believed at some point it made business sense.

Indeed, supersonic business jets are ideal for the service contract based market. Supersonic engines need much more frequent maintenance than subsonic engines, business jet owners are much less price sensitive than mass-market airlines, and its not like you can just swap in a different supersonic engine, operators are completely locked in.

Far more likely, RR wanted Boom to use one of the supersonic engines it already has developed with minimal modification but Boom needs either heavy modification or a clean slate design to reduce fuel consumption (the second biggest issue for commercial supersonic aviation).

[nimbius]

mmm, yes, the 'legacy business model' of demonstrably competent business decisions at the interest of shareholders that produce quantifiable return on investment and further industry growth through innovation strikes again.

[benj111]

Yes I liked that quip too. It's was 'mutually agreed' to which I infer it wasn't.

[Melatonic]

It may be that they DO actually have some talented engineers and some interesting IP (such as a much better engine design) but were hoping to also generate additional revenue or get bought out by a bigger company. The fact that we are also seeing lots of companies come out with smaller turbojet engines (made for retrofitting older small planes that run on regular style ICE engines) makes me wonder if material science or other advancements have gotten us to the point where we are going to see some big improvements in turbojet and turbofans.

[sokoloff]

What are some of these lots of companies working on retrofitting older small planes with turbojet engines? (That seems like a terrible idea all around from a functional standpoint.)

[ajross]

Which is to say: Boom is aimed at the wrong product. The High Tech part of efficient supersonic transport is the engines, not the airframe. If there was an off the shelf engine solution, they could just buy it on investor money. The dirty truth is that there isn't.

[nickff]

Engine manufacturing is much more profitable, and seemingly challenging than airframe manufacturing. The engines they'll use are unlikely to be very different from those in other applications, so I'm not sure there's room for a new entrant. Keep in mind that the R&D and capital costs of becoming a turbine engine manufacturer are immense, and likely much higher than the costs to develop a new aircraft.

[inamberclad]

Rolls Royce, and most other engine makers on this level, are essentially metallurgical gods.

[aardvark179]

They rely on metallurgists, but they may not employ them directly. I know somebody who consulted on that sort of thing, and worked on developing alloys that would work at high temperatures and thus allow greater turbine efficiency, but the engine manufacturers mostly just knew the properties they needed, not how to get them.

[ajross]

... which is tantamount to saying that efficient supersonic transport won't happen because the engine is too expensive to design, though. And maybe that's true. But even if it is true it's still on Boom to make that happen somehow. Not all startups succeed, but those that build the wrong product fail at a 100% rate.

[nickff]

I think Boom will likely design and build a working aircraft, but they don't have the money or expertise to design an engine. Both GE and P&W are capable of designing and building the engine, the question is which will make the business deal with Boom. I am guessing that Boom either wants a cut of the service revenue, or wants to do most of the engine service themself.

[Denvercoder9]

> Both GE and P&W are capable of designing and building the engine, the question is which will make the business deal with Boom.

I think the bigger question is whether either of them will make the business deal with Boom, or if they both deem it too risky and too expensive.

[jjk166]

Paying a well established and experienced engine manufacturer to design the engine you need which is only one part of your product is much more economical than becoming an engine manufacturer yourself. By analogy, if an AI startup needs custom chips, that doesn't mean they need to nor should build their own fab and try to compete with TSMC.

[ajross]

That's just the "off the shelf" argument. Which has just fallen apart because RR doesn't have the product and doesn't want to build it. You're right, that if Boom could just buy their engine it would be better for Boom. Boom can't just buy their engine though, and now it looks like their company is going to fail because they decided to build the easy part and not the hard part.

[jjk166]

Off the shelf means buying something already available for sale. Paying someone to develop something for you is the opposite.

Going back to the analogy from before, you can go to companies which specialize in chip design and development, and you can pay them to design a chip that will meet your specifications and make it in small quantities. It is economical for these companies to keep the technical staff and equipment on hand for this highly specialized work, because they use them for more than just one AI startup's need.

Perhaps an easier analogy would be legal services: every startup needs them at some point or another, but it doesn't mean every startup needs to or should build up an internal legal team. You hire the pros when you need them, and since you're not their sole source of income they can maintain a much better legal staff than you could every support internally. Even for companies where legal expenses are frequent, if the legal services are merely enabling something else then you still shouldn't be a law firm.

Likewise, Rolls Royce has years of engine development experience, it has the tools to manufacture and test prototypes, and it has the facilities for mass production already, and it uses those same expertise and tools for many product lines serving a wide swath of the aviation market such that no one aircraft needs to pay for it all. For Boom to acquire this same capability would be orders of magnitude more expensive than paying RR to do it for them.

The deal has not fallen apart because the development can't be done or because RR doesn't have the capability to do it; the deal has fallen apart because boom is unwilling to pay whatever price RR has named for it providing this service. Boom didn't decide to build the wrong thing, they are just unwilling to pay a required business expense.

[hef19898]

There are very valid reasons why no ariframe manufacturer is building its own engines and vice versa.

And having a civilian suoersonic turbofan engine nobody needs or wants doesn't get a comoany anywhere.

[pstuart]

The real money is in the service contracts.

[starfallg]

Yes, but the key to getting service contracts is to have a product that people can put into service.

[pclmulqdq]

The engines are actually hard to design, though. Most startups (even hard tech ones) try to avoid doing the hard part.