Zunum Aero
Industryweek 14363 040517 Zunumaero

Boeing Teams With JetBlue to Fund Startup’s Electric Airplane

April 5, 2017
Zunum Aero is designing and building 10- to 50-seat planes for trips of 700 miles initially and as long as 1,000 miles by 2030 — which could fill a regional transport gap and reduce travel times in busy corridors.

Boeing Co. and JetBlue Airways Corp. are investing in a startup developing an electric-powered aircraft with the potential to transform short-haul flights.

Zunum Aero is designing and building 10- to 50-seat planes for trips of 700 miles initially and as long as 1,000 miles by 2030. The aircraft would fill a “vast regional transport gap” and reduce travel times in busy corridors by as much as 40% — and by 80% in areas with less traffic — Zunum said in a statement Wednesday.

Boeing and JetBlue are joining a rush by aviation and aerospace companies to scout investments in early-stage ventures and keep tabs on technology with the potential to transform transportation. European planemaker Airbus Group SE created a fund, capitalized with an initial $150 million commitment, and opened a Silicon Valley center in 2015.

“Our charter is looking beyond the horizon,’’ said Steve Nordlund, who heads Boeing HorizonX, the Chicago-based manufacturer’s new venture-capital arm. “We’re looking at traditional, non-traditional partnerships that help us accelerate innovation and market opportunities.’’

In addition to Zunum, HorizonX is investing in Upskill, a company that combines augmented reality such as Google Glasses and wearable technology to boost productivity for manufacturers, field services and logistics companies. Boeing has used its offerings to cut production time by 25% for mechanics installing 130 miles of wiring in each of the company’s 747-8 jumbo jets.

The new Boeing unit, which reports to Chief Financial Officer Greg Smith, replaces Boeing Ventures. That St. Louis-based investment division was narrowly focused on supporting defense and space entrepreneurs like Insitu, Inc., a maker of unmanned aerial vehicles that Nordlund helped start and sell to Boeing in 2008.

Boeing HorizonX will have three focus areas: investing in new ventures and startups, exploring fresh business opportunities for the company’s aerospace capabilities and assessing disruptive innovations and business strategies. It is exploring technologies including autonomy, artificial intelligence, additive manufacturing and alternative propulsion systems — such as the hybrid-electric system that would power Zunum’s aircraft.

Founded in 2013, Zunum expects to complete its first plane by 2020. The Kirkland, Washington-based company said it’s been working with the Federal Aviation Administration on development of certification rules for electric aircraft, with a complete set of standards expected by 2018.

“We believe that, just like Tesla is disrupting the auto industry, electric propulsion will disrupt the regional airline industry,” Bonny Simi, president of JetBlue Technology Ventures, said in an interview, referring to carmaker Tesla Inc. “By investing now, we will literally have a seat at the table to see how this technology evolves.”

Commercial aviation is focused on about 150 larger U.S. airports, said Simi, who oversees the JetBlue subsidiary started in February 2016. Zunum’s planes may bolster service to many of the nation’s 5,000 regional and general aviation hubs by reducing operating costs. The aircraft will have 80% lower emissions initially and will cut noise by 75%, Zunum said.

JetBlue isn’t disclosing how much it’s investing. It will hold a minority stake in Zunum and a seat as a board observer.

Zunum’s aircraft would compete in the market for smaller planes, where Boeing doesn’t have any product offerings. Hybrid-electric propulsion, which is being studied by NASA and others, has the potential to transform larger aircraft now powered by giant turbine engines. While Boeing is taking a minority stake in Zunum, it wouldn’t build the electric planes.

“They’re looking at some disruption in that lower end of the market,’’ Nordlund said by phone. “We want to be close to them to see, number one, if we can be helpful in their success as one of their investors, as well as the innovation that we think they can bring forward.’’

By Mary Schlangenstein and Julie Johnsson

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