Boeing is closing its Boeing NeXt innovation division just over two years since it launched the venture in July 2018. The move, confirmed by a Boeing spokesperson on September 17, raises questions about the future of the company’s shareholdings in eVTOL aircraft developers Wisk and Aurora Flight Sciences. Also now in doubt is whether Boeing will continue its investment in Aerion and its AS2 supersonic business jet program.
Boeing NeXt v-p and general manager Steve Nordlund announced the move to staff in an internal letter on September 15 and indicated that the decision had been taken in response to heavy financial losses sustained in the wake of the 737 Max grounding and the Covid-19 crisis. “Our goal is to move to a full pause as swiftly as possible,” he explained. “Organizations like these only have the privilege to exist when you have a healthy core business.”
Boeing NeXt, which is based in St Louis, Missouri, has been working on two eVTOL prototypes—one designated as a Passenger Air Vehicle and another a Cargo Air Vehicle. Through its Wisk joint venture formed in 2019 with Kitty Hawk, it is developing a two-seat eVTOL design called Cora.
The NeXt business unit also includes the SkyGrid joint venture that Boeing launched with SparkCognition in November 2018. This is focused on developing software for air traffic management of autonomous aircraft.
"SkyGrid continues to be a joint venture between Boeing and SparkCognition," said the company in a statement. "Boeing will remain a key partner, and together we’re committed to our mission of safely enabling the next generation of autonomous aviation. With a strong balance sheet and long runaway ahead of us, there is no impact to SkyGrid's strategic plans or financial viability. Our strategic partnership with broader Boeing will continue to strengthen as we collaborate on UAV technology, standards, and regulations."
A Boeing spokesperson issued the following written statement in response to questions from FutureFlight about the future of its urban air mobility activities: “Aurora will remain a subsidiary and will continue to be part of NeXt for the remainder of the year. Management is assessing several options regarding when this talented organization can make a meaningful and productive impact. In the meantime, it continues to run its business as usual. Our continued investment in and participation with Wisk is being evaluated and no decisions have been made.” She added that the same situation applies to Boeing’s investment in Aerion.
In June, Wisk announced that it had resumed flight testing of the Cora at its facilities in New Zealand and California. Aurora Flight Sciences has yet to confirm the status of its development of the Passenger Air Vehicle, after a June 2019 accident in which an early prototype was damaged at its facility in Virginia.
Boeing announced the Wisk joint venture with eVTOL startup Kitty Hawk in December 2019 but had formed it earlier last year in stealth mode. Last October, the U.S. aerospace giant also announced a partnership with German automobile group Porsche to develop what it described as luxury eVTOL designs, apparently signaling a strong commitment to this rapidly emerging sector.
In a written statement, a spokesman for Wisk told FutureFlight: “Wisk is a healthy, independent company with a committed vision, mission, and go-to-market plan. We are in a strong financial position with an exceptional team, and we continue to execute on our current roadmap. As an investor, Boeing’s relationship with Wisk has not changed.”
In February 2019, Boeing announced a partnership with U.S.-based Aerion Supersonic to help develop the AS2 supersonic business jet. It reportedly invested several hundred million dollars for a 40 percent stake in the company and appointed two out of the five board positions.
Aerion is projecting the Mach 1.4 AS2 will enter service in 2027. The program is backed by several major aerospace prime contractors, including Honeywell, Spirit AeroSystems, GE Aviation, Safran, and GKN Aerospace.
A spokesperson for Aerion indicated to FutureFlight that the company expects Boeing to continue its involvement with the AS2 program. "It is not for us to comment for Boeing of course, but from an Aerion perspective we are united with Boeing in a long-term partnership and an intention to create a faster, more connected future for human mobility," he said. "Boeing remains a long-term investor as was recently reiterated in an update to Aerion's board of directors."
Later this year, Aerion is set to start construction of a new $300 million facility at Melbourne International Airport in Florida. "In the light of the impact of Covid-19 on our industry, as we've been on the record for some weeks, now, we have taken proactive measures on reprioritizing workflow to maintain continuity on the AS2 program. Preliminary design review is scheduled for 2021 with a first flight in 2025," the spokesman had said in an earlier statement.
Announcing results for the second quarter of 2020 on July 29, Boeing reported a $2.96 billion operating loss, equating to a loss per share of $4.20. Revenues for the quarter were 25 percent down on the same period in 2019, at $11.8 billion. The company said it continued to be “significantly impacted” by the Covid-19 pandemic and by the ongoing grounding of the 737 Max airliner following two fatal accidents.