Aerion Supersonic’s sudden closure was ‘shocking and completely unexpected’

News of Aerion Supersonic’s sudden closure came as an unexpected shock to Melbourne airport and City Hall officials, who thought the company was proceeding with plans to build a $375 million global headquarters here.

“I received some very disappointing news just a few minutes ago. Apparently Aerion Supersonic did not meet required capital investment thresholds necessary for continued company operations and they made the decision to shut down the company this afternoon,” Greg Donovan, Orlando Melbourne International Airport executive director, told various officials in a 1:14 p.m. Friday email.

“As a startup venture, we anticipated that there would be some initial risk but the news today is shocking and completely unexpected. Aerion’s employees are being told the bad news right now and all employees are separating from the company,” Donovan said in the email.

“This is especially painful for the many employees that recently moved here and our thoughts go out to them and their families,” he said.

The Melbourne Airport Authority next meets at 8:30 a.m. Wednesday. Aerion Supersonic is not listed on the agenda, but discussion of the company’s closure may occur.

Nevada-based Aerion Supersonic was expected to bring at least 675 high-paying jobs to the Space Coast by 2026, Florida Gov. Ron DeSantis and the Economic Development Commission of Florida’s Space Coast officials announced in April 2020.

The company had planned to build the $120 million AS2 supersonic business jet in Melbourne. In a tweet last week, the company promoted its future plane as “boomless, sustainable, Mach 1-plus transportation, and ready to take flight in late 2024 or early 2025.”

During a March FLORIDA TODAY interview, President and CEO Tom Vice said his company employed a workforce of about 150. About 25 employees worked from a leased Melbourne office at the airport-owned Aerospace Center off Apollo Boulevard.

Mayor Paul Alfrey, who serves on the seven-member Melbourne Airport Authority board, said he was shocked by Friday’s announcement.

“I feel for the employees. I definitely feel for the employees,” Alfrey said.

In his Friday email, anticipating a swift media reaction to the closure, Donovan asked board members and airport staffers to “refrain from making comments at this time until we receive more detail.”

EDC spokesman Brian Baluta declined comment Monday, saying there was insufficient information at this time.

In a Friday afternoon statement, Aerion Supersonic said its AS2 business jet program met all market, technical, regulatory and sustainability requirements — and the market for supersonic flight had been validated with an $11.2 billion sales backlog.

“However, in the current financial environment, it has proven hugely challenging to close on the scheduled and necessary large new capital requirements to finalize the transition of the AS2 into production,” the company statement said.

“Given these conditions, the Aerion Corporation is now taking the appropriate steps in consideration of this ongoing financial environment,” the statement said.

In August, Space Florida announced it had finalized “a multi-million-dollar investment” in Aerion Supersonic to accelerate the hiring of employees and development of the company’s new state-of-the-art campus.

“Space Florida is waiting while Aerion evaluates its next steps,” said Dale Ketcham, Space Florida’s vice president of government and external relations.

“Developments like this are an understood part of the commercial business landscape. Until a formal decision is made by the company, we will decline to comment further,” Ketcham said.

From a lease standpoint, the Aerion Supersonic does not impact airport revenues because the project remained in the incentive phase, Donovan said in his Friday email.

“Closing the company was entirely unforeseen as Aerion has firm orders on aircraft, the backing of companies such as GE and Boeing, and was fully vetted by the EDC,” Donovan said in his email.

“We believed that the company was viable and it was not known by its employees, suppliers, support agencies, and the airport that it wasn’t fully funded for the initial operational stages,” he said.

By Rick Neale www.floridatoday.com

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