Since the end of the Concorde in 2003, the world has lacked a supersonic passenger jet. While modern jets allow safety and convenience for passengers, supersonic jets can shorten travel times to a fraction of what they currently are. For reference, the Concorde flew from New York to London in less than 3 hours. The modern flight time is more than 7 hours. And even greater time savings could be made with trans-pacific routes.
The benefits of a supersonic jet aren’t just for restless passengers. A shorter flight means more flights can be made, potentially increasing a route’s throughput. And the shorter flight means pilots don’t have to work as long, saving time and the company money.
The drawbacks of supersonic flight should not be understated, though. The Concorde itself had low fuel efficiency relative to its peers. And it carried fewer passengers per flight at much higher prices than its competitors. Finally, its loud supersonic “boom” was despised by those on the ground, and it was regulated only to allow limited flight paths over the oceans.
Still, modern companies think they have answers to all these questions. Better engines, wings, and bodies may allow a modern supersonic passenger jet to travel quietly over long distances, carrying many more passengers than the Concorde.
For more than half a century, supersonic passenger jets have been the dream of airliners worldwide. Here are three companies to invest in for that dream to come true.
Lockheed Martin (LMT)
Lockheed Martin (NYSE:LMT) is a well-known name in the field of supersonic jets. But while most people only know them for fighter jets, Lockheed is at the forefront of developing supersonic passenger jets as well.
Lockheed Martin is collaborating with NASA on a supersonic aircraft with a softer sonic boom called the X-59. The Concorde was hamstrung by regulation which prevented it from flying most routes, due to locals complaining about its sonic boom. Lockheed Martin hopes their jet will be no louder than a car door closing. A better jet design could propel Lockheed Martin into the passenger jet race and convince regulators to change how supersonic jets are regulated, opening up new routes for all supersonic airliners.
While the X-59 is still a government contract and not a planned commercial jet, it paves the way for future Lockheed Martin passenger jets. Moreover, it will give them experience tackling a problem no other aircraft has yet solved. The sonic boom problem is a government regulation problem that may otherwise doom supersonic jets even if they prove economical.
The X-59 is slated for its first flight in 2023, and if it proves to be quiet, then the sky’s the limit. Even if the X-59 doesn’t work out, Lockheed Martin is still a very profitable aircraft company, with $19 billion in revenue and $1.9 billion in profit in Q4 2022. Lockheed Martin may be the safest bet if you want to be on supersonic travel stocks.
Kratos Defense (KTOS)
Kratos Defense (NASDAQ:KTOS) produces aerospace and defense products for national security. But it made waves last year when it was picked by Boom Supersonic to design the engine for Boom’s new Overture jet.
Boom has a lot of momentum behind it as one of the few companies planning to produce supersonic passenger jets. Boom says it will start carrying passengers by 2029. But despite its ambitions, Boom itself has no experience fabricating jet engines. That’s where Kratos comes in.
Kratos brings the needed supersonic engineering for Boom’s jets. With engineering veterans from the F-22 and F-35, if Kratos can develop a successful engine for Boom, the floodgates for supersonic engine development could open up. And as heirs to the first successful supersonic passenger engine developed since 1966, Kratos could reap big rewards.
As a small, growing company, Kratos could fly high thanks to its partnership with Boom. In the fiscal year 2022, Kratos had $898 million in revenue, up 10.7% from 2021. Its net loss of $37 million is negligible, so if it can keep or accelerate revenue, it could be well worth a high price.
The bottom line is that if supersonic travel is the future, someone must build the engines. Kratos has inked a deal with one of the most promising supersonic companies on record to do just that.
Like Lockheed Martin, Raytheon (NYSE:RTX) is primarily known for its military jets. But also like Lockheed Martin, it’s thrown its hat into the supersonic ring.
Raytheon has partnered with Hermeus on a plan to not only go supersonic but hypersonic, meaning five times the speed of sound. To perform this feat, an aircraft will need to achieve a quantum leap in engines, wings, and aircraft design. And no one is better positioned than Raytheon to make this happen.
Raytheon has invested heavily in Hermeus’s vision. Not only has its venture capital arm directly invested in Hermeus, but its subsidiary Pratt and Whitney is making Hermeus’ engines.
Not only that, but another Raytheon Subsidiary, Collins Aerospace, is collaborating with Boom Supersonic to develop its jets. Raytheon is investing heavily in commercial supersonic jets. And it and its subsidiaries could be the prime benefactors if any of these companies take off. Like Lockheed Martin, Raytheon will still be a profitable company even if supersonic passenger jets don’t materialize. With $67 billion in revenue and $5.2 billion in net income in 2022, it’s a stable company to invest in, regardless. But Raytheon may be the most heavily invested in supersonic passenger jets. And it may have the most to gain if they can take flight.
On the date of publication, John Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.