£1.4 billion in Airlander 10 reservations

This year has seen us surpass £1.4 billion of reservations for Airlander 10. We spoke to George Land to find out what this means in practice.

Building a £1.4 billion block of reservations sounds very impressive. Are these firm orders?

There are lots of different definitions of ‘firm order’, but it is generally taken to mean that the final contractual documents needed to build and deliver the aircraft have been signed and both sides make financial commitments, such as to a schedule of stage payments accordingly. But the key details of pricing and delivery are always set and the two parties have agreed to buy and sell the aircraft respectively.

HAV is currently in a pre-production phase. This means that neither HAV nor our customers can yet finalise and agree on some of the details that would appear in the contract for a ‘firm order’. So at HAV, we use ‘reservation agreements’ to bridge this gap.

Our reservation agreements with commercial companies are legal documents which define what each customer wishes to order, the top-level specification of the aircraft, expectations around delivery timing (which are usually very important to our customers) and other matters that are important to define the demand that each customer has. A deposit is paid, which we hold until the firm contract is signed.

With government bodies the process can be slightly different: in one recent agreement we hold an agreed number of aircraft reservations while funded work is underway to work through details needed to firm up production contracts. This meets the same spirit of the deposit payments made by commercial companies, while allowing for the different processes that are in place in government and related institutions.

Is a reservation agreement the same as a “Letter of Intent” or “Memorandum of Understanding”

The terms LOI or MOU are just headlines that signal that intent without having any specific meaning in and of themselves. LOI’s and MOU’s can take many different forms and imply different levels of commitment to different organisations and the devil is in the detail. That’s why we’ve defined our own structure, reservations, and are happy to be clear about what it means and we consistently apply it with prospective customers.

£1.4 billion is a big number – but how big? How significant is it to your plans?

It’s a big number at this stage of the project. If each of the reserved aircraft went into service with 100 seats, we currently have 3,000 passenger seats reserved – that is about the same as 750 typical eVTOL aircraft (also known as air taxis). It’s also enough to fill our planned production delivery capacity for over two years. These are all civil aircraft reservations, so our defence contracts with the US Department of Defense and our MoU with BAE Systems are signposts towards additional orders in the defence world. So the first years of Airlander 10 production are well covered by reservations and by expected defence demand.

What are the next steps?

We’re currently working on campaigns and projects that will cover up to many billions worth of additional reservations, while at the same time preparing for the reservations that we already have to be converted into firm orders. Our current funding round is designed to enable us to begin work on the production line, we have type certification of the aircraft underway, so we’re looking forward to seeing those first aircraft off the production line and into the hands of our customers.

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