TO36 Hypersonic Study

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JANUARY, 2020TO36 Hypersonic StudyI N D U S T R Y P R E S E N TAT I O N – F E B R U A R Y 2 0 2 1NASA Data and Technical Support Services TORFQ 36

SUMMARYHypersonic Market Study Summary FindingsCustomers of Commercial and private jet services, as well as cargo shippers are willing to pay formore expensive tickets to arrive soonerThe total projected passenger volume for each Mach number were found to be sufficient to supporthigh speed air service for transoceanic routes without including overland routesViable business cases are possible from Mach 2 to Mach 5 however, high speed aircraft cases areless robust than the Mach 2-4 rangeIn all cases, business viability [IRR] is most sensitive to passenger volume variances and to a lesserdegree fuel price fluctuations and government subsidiesRegulatory, certification, societal and infrastructure barriers and challenges pose varying levels ofbusiness risk to aspiring service providersThe most challenging barriers are driven by lack of specific regulations and certification requirementsto “design to” for this flight regime

TASK 1: MARKET ASSESSMENT

OVERVIEWOVERVIEW OF OUR APPROACHIn analyzing the high-speed air transportation market, we followed a structured approach involving several phases of analysis.MARKETS E G M E N TAT I ONCITYPA I R I N GMARKETDEMANDWhat are the current trends inWhat are the most viableHow large is the potentialthe market?routes in the market?market?I. Catalogued government,corporate, and academicentities actively engaged inthe high-speed airtechnology ecosystem.II. Mapped industry supplychain and identifieddownstream sectors,including passenger, cargo,and private.III.Analyzed US market trendsto identify investmentacross the public andprivate sector.9I. Analyzed industry data toprioritize a list of potentialhigh-speed air routes thatalign to passenger, cargo,and private transportationsubsectors.II. Down-selected routesbased on a route-by-routeanalysis of economic andtechnical viability, assigningscored for each route.III.Benchmarked routes intoquadrants to identify selecttop-candidates.I. Surveyed consumers tomeasure willingness to payfor future high-speed airpassenger, cargo, andprivate transport services.II. Developed elasticity curvesand sized the potentialmarket across all futureservices includingpassenger, cargo, andprivate transport.III.Catalogued major potentialuse cases and customers.

SUMMARYMarket Segmentation Key TakeawaysWe observe a strong industrial base for defense applications and a nascent but growinginterest in commercial applications from private investors seeking ROI.The private sector is developing technologies across the high-speed air supply chain, but theseefforts are predominantly aimed at defense applications and technological barriers currentlyconstrain commercial market growth.To achieve optimal ROI, industry and government stakeholders will need to leverage existingresources in the defense industrial base while building out the civil side of the market.10To e n a b l e c o m m e r c i a l m a r k e t s e g m e n t , t h e r e w i l l l i k e l y n e e d t o b e aconcerted government effort to remove market barriers and incentivizecommercial development programs inclusive of direct governmentpurchases of airframes and government intervention

OVERVIEWTop Routes by Market SegmentPA S S E N G E RCARGOTop Routes forConsiderationJFK-LHRMIA-GRULAX-AKL11P R I VAT ETop Routes NTop Routes ZJFK-NAS

SUMMARYCity Pairing Key TakeawaysThe top-scoring passenger routes included JFK-LHR, MIA-GRU, and JFK-CDG. Notably, two ofthese routes historically hosted the Concorde.The top-scoring cargo routes included LAX-HKG, ANC-PVG, and LAX-NRT. These were primarilytrans-pacific, Asia-based routes, which are the longest haul and have the highest freightvolume globally.The top-scoring private routes included JFK-LHR, MIA-LHR, and JFK-IBZ. These routes had thehighest wealth statistics globally as well as the highest charter flight volume annually.Across our analysis of passenger, cargo, and private transportation routes, JFK-LHR remainsthe dominant market from a technical and economic perspective.T h e s e l e c t i o n o f s t r a t e g i c c i t y p a i r s f o r m a r ke t e n t r y i n t h e t h r e econsumer segments will be critical for market success. The litmus testis the Global Crown Jewel JFK -LHR market.12

OVERVIEWMarket Demand MethodologyIn assessing demand for high-speed air transportation, we conducted consumer surveys and open-source research to identify key users and theirwillingness to pay.PassengerHCargoPrivate13 We conducted a direct consumer survey to gauge demand for a high-speed air service. We estimated a market size, leveraging historical and forward-looking data to use asbenchmarks. We assessed the three benchmark routes to determine economic viability of the routes. We applied our elasticity curves to identified potential routes to identify a totalmarket size. We identified potential business-to-business user-stories for a high-speed airshipping service. We conducted a direct consumer survey for to gauge consumer demand for highspeed shipping services that the market currently does not offer. We estimated a market size, leveraging historical and forward-looking data to use asbenchmarks. We collected historical data on subsonic aircraft to project out potential costs. We benchmarked this against historic and future supersonic aircraft pricing. We analyzed global wealth data to determine net-worth brackets required to purchasehigh-speed air vehicles.

PASSENGER ANALYSISSurvey Results: Consumer Price ElasticityWe presented a series of questions that asked for consumers’ maximum willingness to pay at various time savings (as determined by Mach ranges). Weasked these questions for several route lengths, including mid-haul, long-haul, and ultra long-haul flights.Mid-HaulMid-Haul: JFK-LHRWhat it Tells UsAnnual Passenger Flight Segments2,500,000We observe the highest price sensitivity and strongestdemand between 1,275 and 4,250 (2X-6X economy).2,000,000Between 1,275 and 15,000 (2X-23X economy), weobserve higher demand for more hours saved, andrelatively lower demand for fewer hours saved. Thisaligns with rational consumer behavior.1,500,0001,000,000However, after 15,000 per ticket (23X economy), thetime savings curves converge, demonstrating lowwillingness to pay regardless of time savings.500,000Assumptions:0Price ( )3.5 hours savedMach 2144.5 hours savedMach 3Supersonic5 hours savedMach 45.25 hours savedMach 55.5 hours savedMach 6Hypersonic All prices represent one-way tickets. The average economy ticket for JFK-LHR costs 650. COVID excluded, JFK-LHR has approximately 2.9 millionannual passengers.11. Figure based on Routes Online passenger data

CARGO ANALYSISSurvey Results: Cargo ElasticityTo assess willingness to pay for faster shipping services enabled by high-speed air transportation, we asked consumers about their willingness to pay forvarious shipping options beyond what is currently widely available to the public.Consumer willingness to pay for expedited shippingPrice SensitivityWhat it Tells UsPercent of Respondents60%We observe the highest price sensitivity and strongestdemand between 2X and 7X the typical cost ofstandard 2-day shipping rates.50%Between 2X and 8X standard 2-day shipping rates, weobserve higher demand for more hours saved, andrelatively lower demand for fewer hours saved. Thisaligns with rational consumer behavior.40%30%20%However, after 8X the standard 2-day rate, the timesavings curves converge, demonstrating lowwillingness to pay regardless of time 2x13x14x15x16x High-speed air transport is specifically used to expeditethe shipping process. Last mile logistics are not a limiting factor for delivery. Downstream retailers do not have the item in stocklocally (which would eliminate the need for air freight).Multiple on 2-Day Shipping Price15One-day shippingSame-day shipping5-hour shippingLess than 5-hour shipping8-hour shipping1. Figure based on Bureau of Transportation Statisticsair cargo data

PRIVATE OWNERSHIP ANALYSISPrivate Ownership ElasticityThe graph below breaks down the maximum amount that high net worth individuals pay for luxury goods on average (i.e. jets, yachts, artcollections). The horizontal price bands illustrate the jet prices outlined on the previous slide.Consumer willingness to pay for private jetsHow Wealthy Individuals TravelMax Limit of High/Medium Affinity Goods ( M) 160Private JetOwnershipWhat it Tells UsJet CardMembershipOn-DemandCharterCommercialFirst Class 146 140 131According to this data, approximately 60,000 peopleare wealthy enough to afford midsized private jets orlarger jets. 117 120 102 100Each consumer will have a price ceiling based on theirnet worth and the premium for speed as a utility. Jetspriced above 146M will likely be unattainable for allbut the multi-billionaires. 88 80 73 60Net Worth 36.50 40 14.60 20 7.30 4.38 1,000 900 800 700 600 500 250 100 50 30 0.73 0.15 5 1Total Net Worth ( M)16An individual’s level of wealth dictates how they wouldbe a customer for supersonic travel, i.e. jet cardmembership, on-demand charter, or ownership.Jet Prices:MidsizedMidsized-LargeLargeSupersonic (Desired Price) 1M- 5M 5M- 30M 30M- 50M 50M- 100M 100M- 250M 250M- 500M 500M- 1Bn 1BGlobal ,6605,2152,8251. Figure based on WealthX 2020 Global Wealth Report

SUMMARYDemand Analysis Key TakeawaysPassenger willingness to pay indicated that the JFK-LHR route would create a market ofabout 2.1B in the first year; the potential to add several other city pairs increases thismarket size as well.Consumers who were willing to pay for faster shipping services (40% of surveyed) wouldcreate between a 7B market for 12-hour shipping to a 14B market for 5-hour shipping inthe first year.Historical private aircraft at comparable sizes and prices indicates that the market wouldtolerate a Mach 2 jet at 79M, a price much lower than current manufacturers areprojecting.17There is addressable demand in the scheduled passenger service,cargo transportation, and private air service market segments withschedule passenger and charter air service acting as the primarydemand drivers.

SUMMARYTask 1 Findings – An Emerging Market PictureFrom a demand-side view, an emerging market picture for the nascent high-speed transportation market begins to take shape as follows:MARKET OBSERVATIONSBarriersremainCOMMERCIAL MARKET SEGMENTATIONPremiumPassengersPredominantly DefenseFocused InvestmentsSupersonic speedsare preferredPrivateAircraftCargo An addressable market is emerging, but it will requiretechnical serviceability and removal of barriers Elasticity analysis for each segment reveals significant pricesensitivity for most consumers For all demand segments, supersonic flight is more likelyto drive market adoption and sustainable prices versushypersonic. As expected, consumers would be more willing to paypremiums for longer flights. However, high-demand,shorter routes can still produce more customers than lowerdemand, longer routes, despite this consumer behaviorIdeal routes vary for each application (passenger, cargo,and private travel). In general, trans-Atlantic routes are mostpreferable for the passenger and private markets, while transPacific routes close the business case for cargo Unlike passenger airlines, jet sharing companies have gainednew customers; industry experts expect private jet demand tocontinue to be higher than pre-pandemicSUPERSONICSERVICEPREFERRED SPEEDPASSENGER &PRIVATEMOST VIABLE SEGMENTSOUR FINDINGSDEMANDWealthyIndividuals BusinessTravelers &ExecutivesTime or ShippingSensitive CargoThe largest addressable pool of passengers are wealthyindividuals that are likely to purchase supersonictransportation in the form of premium scheduled service, charterflights, jet cards/memberships, and outright plane purchases. The largest addressable segment is likely scheduled commercialair service for premium and ultra-premium travelers. Charter and on-demand services are likely to drive more demandfor supersonic airframes than individual private owners.1822.1MGLOBAL WEALTHYINDIVIDUALSWHERE TO STARTNASCENTMARKET STAGEGlobal CrownJewel Routes 300 90TOTAL ANNUALDEMAND FORPRIVATEAIRCRAFTIDENTIFIED ROUTESFOR ANALYSISTransatlantic &Transpacific Routes The most technically viable routes are transoceanic andlonger than 2,500 nautical miles The most economically viable routes were ‘crown jewel’routes/city pairs with high volume and considerable wealthdemographics The industry incumbent route JFK-LHR remains the mostviable market, while additional trans-pacific routes now offernoteworthy potential

TASK 2: DEFINING THEBUSINESS CASES

ECONOMIC RESULTSTop-Level Economic Findings (BLUF)The analyses resulting in several interesting findings across the entire trade space, including the following1. There are multiple aircraft configurations and market approaches that result in positive businesscases for their manufacturers and operators (assumed as IRR 25%) Smaller aircraft (20 – 50 pax) tend to be favored over larger aircraft for several factors, including salessynergies with the private/charter market and higher average passenger load factors on thin routes Slower cruise speed aircraft (Mach 2 – 3) in the 4,000 nmi – 4,500 nmi class are also slightly favoredand result in lower ticket prices and therefore larger market sizes. This seems to be a more robustpart of the market North-Atlantic markets remain the largest economic prize, but longer trans-Pacific ranges remaininteresting for smaller Mach 2 – 3 vehicles that can reach to 6,000 nmi 2. Results are most sensitive to potential reductions in estimated passenger market size Fuel cost increases, engine development cost increases, and lost of private/charter sales are alsoimportant3. Government contributions via non-recurring offsets or “anchor buys” are helpful 20More beneficial for 1) smaller overall aircraft development program (gov’t contributes a largerpercentage of the total cost) or 2) higher speed aircraft where predicted annual airframe sales are notas large. However, government contributions are not required for success

OVERVIEWThe Case For SpeedFrom our flight performance module, we compared the total travel time for a flight at various speeds and for various one-way route distances.Cruise Mach Impact on Gate-to-Gate Travel Time1816LA to TokyoLA to SingaporeMach 2Mach 314Mach 4Mach 512Travel Time (hr)NYC to LondonSubsonicMach 610864200211,0002,0003,0004,000Distance (nmi)5,0006,0007,0008,000

OVERVIEWDistribution of Potential Passengers vs. RangeWhat is the best one-way aircraft range? At a design range of 5,000 nmi, 73% of the addressable transoceanic US passenger traffic and routes are capturedfrom the 90 potential city-pairs in our model. Longer routes can be captured for diminishing returnsPotential Market and Routes vs Range100100%Start capturingTranspacific routes90Majority ofNorth-Transatlantic80%Routes Captured706060%Major Asianmarkets 0450050005500Routes6000% of Total Market6500700075000%8000Potential Market Size8090%

SEI’s INTEGRATED P2PROSETTA MODEL

ROSETTA MODEL OVERVIEWIntegrated P2P ROSETTA Model OverviewA ROSETTA model is a highly coupled multidisciplinary aircraft sizing, performance, and economic simulation. Key user inputs (i.e. Mach, Range, andPassengers) generate an estimated aircraft size, cost, and a set of all-encompassing business case outputs for manufacturers and operatorsAIRCRAFT DESIGN MODELBUSINESS MODELUSER INPUTSINPUTS Cruise Mach Maximum Range Passenger Count Commercial TicketPrice (one-way) Engine Price-to-costratio Aircraft Price-to-costratioFLIGHT PERFORMANCEINPUTS Cruise Mach Maximum RangeOUTPUTS Flight Profile Travel TimeAIRCRAFT SIZINGINPUTS Cruise Mach Maximum Range Passenger Count Flight Profile Travel TimeOUTPUTS Aircraft Masses Aircraft Geometry Fuel Consumption Engine Thrust Balanced Field LengthENVIRONMENT MODULEINPUTS Cruise Mach Maximum Range Passenger Count Flight Profile Aircraft Masses Engine Thrust Fuel ConsumptionOUTPUTS Emissions Sideline Noise Sonic Boom PressureCOST MODULEINPUTS Cruise Mach Aircraft Masses Engine ThrustOUTPUTS Airframe DDT&E Airframe TFU Engine DDT&E Engine TFUBUSINESS CASESINPUTS Engine Price Aircraft Price Ticket Price Passenger Count Maximum Range Travel Time Fuel Consumption Airframe DDT&E & TFU Engine DDT&E & TFUOUTPUTS Manufacturers’ IRR & NPV Operators’ IRR & NPV Aircraft Price Fleet Size24AIRCRAFT, ECONOMIC,& ENVIRONMENTOUTPUTS

ROSETTA MODEL OVERVIEWP2P ROSETTA Model NotesThings to know about our model1. Anchored and validated against a set of 8 historical or proposed Mach 2 aircraft Model is an approximate tool designed to rapidly and parametrically explore are large trade spacefrom Mach 2 to 6, Passengers from 20 to 250, and design ranges from 3,000 nmi to 8,000 nmi Estimate aircraft size and mass, development costs, production costs, and profit/loss business case Accuracies in the range of /-20% for any particular reference concept2. Built-in Genetic Algorithm optimizer is used to optimize airframe, engine, and passenger ticketprices to improve business case The model contains “if” statements and technology step changes. Its results are not smooth! Each data point is a locally optimized business case that maximizes the annualized return oninvestment for manufactures and operators (assumes all three players must succeed equally)3. Runtimes vary with the number of independent variables and complexity25 60 minutes for each point for smaller problems (typical desktop PC) 60 hours for large, complex problems

ROSETTA MODEL OVERVIEWKey Assumptions1. The high speed aircraft is sized for its design range and offers a single passenger-class service That is, aircraft designed for ultra-long haul routes are also used for medium and long haul routes (one size fits all approach). There iseconomic incentive therefore to “right size” the aircraft for the preferred business case2. Business model captures operations from 2021-2055 Manufacturers develop products for first 10 years then transition to production. Airliner begins operating once aircraft are delivered.3. United States Government purchases first 20 aircraft produced regardless of size or speed “Anchor buy” concept establishes a minimum number of aircraft to be produced4. All cost numbers are in FY21 dollars5. A turbojet is used to power aircraft from Mach 2 to Mach 3. A turboramjet is used for aircraft operating fromMach 3 to Mach 5. Above Mach 5, a dual mode scramjet is used with a turbojet6. Jet A fuel is priced at the national average of 4.06 per gallon. LNG is priced at 3.00 per gallon.7. “Captured” routes from the list of 90 candidate transoceanic city pairs must be within range and have thedemand for at least one flight per day8. Routes mostly over land are not included in our current model9. Belly cargo is included as additional revenue on all flights at 100/kg and 500 kg10. To approximate COVID recovery, we expect market numbers to return to 2019 levels by 2024 27A market growth rate of 0.94% is applied annually to all addressable markets after 2024

A SAMPLE OF ECONOMICRESULTS FROM THECURRENT MARKETSTUDY

ECONOMIC RESULTS50 Passenger IRR50 passenger count aircraft all perform relatively well between 4,000-5,000 nmi. This design size provides agood balance between ticket price and demand for the airliner and manufacturers.35% 30%Average IRR1. Mach 2 - 3 aircraft performbest overall, especially atlonger ranges25%2. At shorter ranges, higheravailable ticket prices helpbenefit Mach 4 to 5 aircraftdespite smaller markets20%3. For the Mach 2 aircraft, enginecount jumps from 2 to 3 at6,000 nmi15% 10%3,0003,5004,0004,5005,0005,5006,0006,500Design Range (nmi)29Ticket and aircraft prices staylower for the slower aircraftallowing them to capture alarge marketMach 2Mach 3Mach 4Mach 5Mach 5.25Mach 5.57,000This results in a productionincrease for the enginemanufacturer that allowsairliners to increase ticketprices and sacrifice demand.

ECONOMIC RESULTS50 Passenger Secondary FactorsKey factors contributing to the average IRR are below:1. More passengers means moreaircraft soldAircraft Sold500400 7,000Passengers / Year4.0 M3.0 M2.0 M1.0 M0.0 M3,000Ref Ticket Price2. Ticket price determinescaptured passenger demand 5.0 M 12,000 10,000 8,000 6,000 4,000 2,000 04,5005,0005,5006,0006,500Mach 2Mach 3Mach 4Mach 5Mach 5.25Mach 5.57,000Ticket price needs to be highenough for the airline to profitbut not too high as to overlyreduce demand.3. Mach 2 aircraft stay cheaper athigher ranges, capturing moreof the addressable market Design Range (nmi)307,000This almost always benefitsthe manufacturersHigher Mach aircraft get veryexpensive at higher ranges, soticket price increases butdemand suffers

ECONOMIC RESULTS50 Passenger Ticket PriceTicket Price is the main input that seeks a balance between revenues and demand.1. The solid lines represent thereference ticket price (JFKLHR ticket price) 14,000 13,000 12,000 11,000 10,0002. The dotted lines show theticket price scaled for thedesign range of the aircraft.Ticket Price 9,000 8,000 7,000 6,000 5,000 4,000 2,000 1,0003,5004,0004,5005,0005,500Range (nmi)31Essentially, the max ticketprice applicable for a givenaircraft.3. Ticket price tends to becloser to the reference ticketprice. 3,000 03,000This is input ticket price forthe model/optimizerMach 2 MinMach 3 MinMach 4 MinMach 5 MinMach 5.25 MinMach 5.5 MinMach 2 MaxMach 3 MaxMach 4 MaxMach 5 MaxMach 5.25 MaxMach 5.5 Max6,0006,5007,000 This is due to the largemarket size for JFK-LHR andsimilar routes

COMPARISONS WITHISO LINES OFPASSENGER COUNT

PASSENGER COUNT COMPARISONSInternal Rate of Return (IRR)IRRs relative to passenger count:Average IRRMach 2Mach 10%3,00020 Pax354,0005,00050 Pax6,0007,000100 Pax10%3,0004,0005,000 4,0005,0006,0007,000Mach 5.5Mach 5.25Mach 5Average IRR4,0001. Lower passenger countperforms better in mostscenarios.Mach 46,0007,00010%3,000100 passengers doesbetter above Mach 5briefly due to fuel savingsper passenger with LNG2. Slower aircraft performbetter in general Less fuel needed to reachand maintain speed3. 4,000-5,000 nmi seems tobe ideal range 4,0005,0006,0007,000Captures enough marketswithout aircraft growing insize and dev cost

SENSITIVITIES

SENSITIVITIESSensitivity Assumptions1. Sensitivities were gathered by taking an optimized case and then varying one variable at a time Sensitivities include: Government Investment to manufacturers, evenly split (None, 500M, 1,000M) Jet A Fuel Price ( 4.06/gal – national average, 7.50/gal – expect higher prices in future; 3.00/gal LNG price fixed) Market Size (1x – nominal case for given routes, 0.5x – demand falls short of nominal, 1.5x – certain marketsmore viable) Engine DDT&E Cost (Nominal Case, 25% decrease in development costs, 25% increase in development costs) U.S. Government Purchases (20 aircraft – nominal case, 10 aircraft, 0 aircraft) Charter/Private Market Size (1x – nominal case, 0.5x, 0.0x) Sensitivities were conducted at each Mach number and at passenger counts of 20, 50, & 100 The average IRR across all models from the immediate change was used as the resultant IRR metric2. Select cases were re-optimized for each sensitivity to validate partial derivative results above 44 For the re-optimized “total derivative” cases we examined for the 20 passenger aircraft: Average IRRs due to increased fuel prices were seen to be a couple percentage points higher in re-optimizedcases. Average IRRs due to a decrease in market size were seen to be several percentage points higher in re-optimizedcases.For the most part, the average IRR from the partial derivative is a good representation of the re-optimized IRR andtrends behave similarly. We believe the one-at-a-time sensitivities are representative

SENSITIVITIES50 Passenger Sensitivity ComparisonThe trends seen below are relatively consistent for 20 and 100 passenger cases.1. Market size is the mostimpactful sensitivityTrade Studies for 50 Pax, 5000nmi Range, Mach 3 Aircraft35% 30%1.0x - Baseline0.5x0.0x10020 - Baseline 25%Baseline-25%1.5x1.0x - Baseline0.5x 7.50 3.005% 1,000 M10% 500 M15% 4.06 - Baseline20% 0 - BaselineAverage IRR25%0%52Gov't Inv.Fuel PriceMarket SizeEngine CostUSG PurchasesCharter MarketDemand is a major factorfor a viable business caseso increasing ordecreasing it has a bigimpact2. 20 passenger sensitivitiesbehave more like theslower sensitivitiespreviously, while 100 is theopposite

TASK 2CONCLUSIONS

TASK 2 CONCLUSIONSTask 2 Analysis Conclusions (1 of 2)Does commercial flight above Mach 2 make any economic sense (barriers aside)? Yes. There are several business cases that make economic sense for manufacturers and operators alike.Mach 2 – 3 cases look to be the most robust, but certain turboramjet cases up to Mach 5 also make sense(producing IRRs 25%), although the incremental benefit for speed remains limited for most routes.What aircraft sizes (passenger count) make the most sense? Aircraft sized for 20 – 50 passengers seem to strike the best balance between passenger load factor,aircraft sales (manufacturers’ sales) and still maintain reasonable ticket prices.What about those ticket prices? They are expensive, right? Many viable business cases can result from ticket prices less than 3,500 per direction (NYC to LHRreference). More expensive than today’s coach prices to be sure, but not unreasonable.

TASK 2 CONCLUSIONSTask 2 Analysis Conclusions (2 of 2)What is the best “design range” for a future high-speed aircraft? Our analysis considered only over-water routes. We found 4,000 nmi – 4,500 nmi to be a nice sweet spot in the tradespace. This range captures about 50 valuable city-pairs in our network. Aircraft designed for longer trans-Pacificranges could also do well, but they tended to be oversized for the very high demand North Atlantic routes. Ouranalysis did not consider derivative or stretch airframes for more than one marketWon’t these aircraft be expensive? Yes, they will be more expensive than today’s subsonic airliners. However, if manufacturers can exploit the synergiesbetween elite airline operators and private owners with smaller aircraft, high production volumes can reduce aircraftprices below 125M - 150M. Smaller aircraft also require lower development costs and decrease capital needs.What are the Gotcha’s Here? These results are very sensitive to passenger market assumptions, but we have confidence in our research approachto characterize the future high speed passenger travel market. Future fuel costs and engine development costsremain concerns as well. Government contributions can help, but are not required for success

TASK 3: IDENTIFYINGBARRIERS

OVERVIEWOVERVIEW OF OUR APPROACHIn discovering and analyzing the barriers to high-speed air transportation, we are following a structured approach involving several phases of analysis.L I T E R AT U RE R E V I E W& C ATALOG U EF I R S T- H A NDI N T E RV I E WSD E LOI T T E R E S E A RC H& A N A LY S I SWhat do existing documentsWhat do industry experts andBased on current markettell us about current marketfirst-movers have to say abouttrends, what are the potentialbarriers?these barriers?paths forward?I. Research existing publiclyavailable industry literature,including publications,corporate press release,and industry & think-tankreports.I. Develop a list of relevantsubject matter experts fromindustry and Deloitte’sinternal firm network.II. Conduct outreach tocandidates for focuseddiscussions based on theirexpertise related to highspeed air travel.III.Capture insights fromstakeholder interviews andincorporate into Task 3analysis.II. Synthesize research into aninitial list of clearly definedchallenges.III.Align challenges toapplicable categories andcatalogue initial datasources.I. Synthesize challengesidentified from researchand interviews to identifythe key barriers to highspeed air transport.II. Organize barriers into aworkable framework thataddresses the significanceof each barrier.III.Leverage all data collectedto provide detailed analysison each barrier, includingpossible paths-forward forthe private & public sectors.RESEARCH & IDENTIFICATIONVALIDATION & DUE-DILIGENCEInitial study of available documentation & stakeholder interviews.Targeted stakeholder discussions & in-depth research on each issue .58

RESEARCH & INTERVIEWSLiterature Review: By The NumbersAs part of our analysis of industry barriers, we conducted a comprehensive review of existing literature too identify and conduct due-diligence on potentialbarriers to high-speed air transportation.BY THE NUMBERS80 Total documents reviewed & cataloguedspanning across 7 key considerations /categories of barriers.15Total challenges identified from ourliterature review.KEY TAKEAWAYSModern high-speed aircraft manufacturers aredeveloping multiple new technologies, such as newairframes, low-sonic boom technology, and newengine technology.Environmental issues have recently risen to theforefront of public policy focus; the prospect of highspeed aircraft and the emissions & noise implicationsof these vehicles are a major concern for the public.Regulators are aware of the major regulatory &certification challenges for high-speed aircraft, andauthorities are acting on them via NPRMs (FAA-level)and

1x 2x 3x 4x 5x 6x 7x 8x 9x 10x 11x 12x 13x 14x 15x 16x s Multiple on 2-Day Shipping Price Price Sensitivity One-day shipping Same-day shipping 8-hour shipping 5-hour shipping Less than 5-hour shipping Survey Results: Cargo ElasticityAuthor: William BastedoPublish Year: 2021

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