Boom Supersonic Lands a Massive Jet Order, Doesn't Have Stock

Mohit Oberoi, CFA - Author
By

Aug. 17 2022, Published 8:26 a.m. ET

Boom Supersonic has landed a massive 20 supersonic jet order from American Airlines, which is the largest airline company in the U.S. Does Boom Supersonic have stock and is it publicly traded? Here’s what we know about the company.

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The aviation industry has rebounded sharply from the COVID-19 pandemic-driven slump. The industry has been scrambling to meet the strong travel demand. While there's still pent-up leisure travel demand and corporate travel demand continues to rebound, the industry has been plagued by a shortage of workers.

Boom Supersonic is privately held and doesn't have stock.

If you were looking to invest in Boom Supersonic to capitalize on the American Airlines order, there's some bad news. The company isn't publicly traded and doesn't have stock. It's privately held and venture capital companies have been funding the company.

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Boom Supersonic is a unicorn.

Boom Supersonic turned a unicorn in a 2020 funding round, which means that its valuation surpassed $1 billion. According to Crunchbase, Boom Supersonic has raised a total of $247.5 million so far in eight rounds of funding. It has a total of 32 investors, including four lead investors.

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United Airlines has also placed orders with Boom Supersonic.

American Airlines isn't the only company betting on supersonic jets. United Airlines has also placed an order for 15 of the jets with an option to buy 35 more. United expects to carry passengers on Boom’s Overture airliners by 2029. The aircraft would run on SAF (sustainable aviation fuel) and would be a net-zero carbon aircraft.

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Boom Supersonic inked a massive deal with American Airlines.

Coming back to the Boom-American Airlines deal, the latter has the option to purchase an additional 40 aircraft. American Airlines has paid an initial non-refundable deposit for 20 Overture aircraft but the amount hasn't been made public.

According to American Airlines, “Boom must meet industry-standard operating, performance and safety requirements as well as American’s other customary conditions before delivery of any Overtures.”

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American Airlines sounds bullish on the deal, which is the largest order for supersonic aircraft. Derek Kerr, American Airlines’ CFO said, “Looking to the future, supersonic travel will be an important part of our ability to deliver for our customers.” He added, “We are excited about how Boom will shape the future of travel both for our company and our customers.”

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Boom Supersonic is also partnering with the U.S. Air Force.

Boom Supersonic has also partnered with the U.S. Air Force and even got funding from them. The company has partnered with Northrop Grumman Corporation for a supersonic military aircraft for the U.S. government and its allies.

Global defense spending is expected to increase in the coming years as the world adjusts to the new geopolitical realities. Russia's invasion of Ukraine and China’s aggressive posture have made several governments, especially in Europe, realize the importance of adequate defense spending.

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Boom can reduce travel time.

Boom’s Overture aircraft can roughly reduce the travel time by half. It intends to reduce the travel time between New York to London to 3.5 hours compared to the current time of 6.5 hours. Similarly, the company is looking to cut the travel time between Los Angeles and Sydney, Australia from 14.5 hours to a mere 8 hours.

However, the Overture Aircraft is still years away. Boom Supersonic would make these in its North Carolina facility, with the first model expected only in 2025 and the first flight in 2026.

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