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blimps

Tumbling Oil Prices Have Given Birth to Two Massive, Dueling Blimps

By
Alan Farnham
Alan Farnham
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By
Alan Farnham
Alan Farnham
Down Arrow Button Icon
April 4, 2016, 12:07 PM ET
Global Media Launch Of The Airlander 10 Hybrid Airship
Photograph by Bloomberg via Getty Images

Imagine three gigantic wieners.

Lay them side-by-side, to form a rectangle.

Fill them with 1.3 million cubic feet of helium (about 6.5 times what you’d need to fill a Goodyear blimp). Attach some motors, and—voila!—you have the LMH-1, Lockheed Martin’s new hybrid airship–a giant flying air-mattress that the company is building inside its secretive Skunkworks in Palmdale, Calfiornia. It’s the first commercial aircraft the Skunkworks has produced.

At the same time, in a hangar north of London, a rival craft is preparing to take flight: Airlander 10, owned by Hybrid Air Vehicles (HAV), sports two wieners, not three. Otherwise, it looks identical to the LMH-1. Its bulbous, bi-lobal rear has earned it a few nicknames from the British press, including the “Flying Kardashian” and the “Flying Bum.”

The “Bum’s” backers include Iron Maiden frontman Bruce Dickinson, who so far has invested more than $350,000. HAV has raised money from some 1,000 other investors, from U.K. and E.U. government grants, and from crowdfunding, the latest round of which, announced last week, was meant to raise about $700,000. It was filled in just 10 hours, and is now in over-funding.

Both of these new craft are enormous: roughly 300 feet long, 140 feet wide, and 85 feet tall. Both are designed to cruise at 70 to 90 miles an hour. Both employ sophisticated avionics and the latest in composite materials. Both can stay airborne for a week without being refueled. Both carry payloads weighing in the tens of tons. And both are environmentally benign–low noise, low vibration, fuel efficient: Sustainability, thank heavens, has finally come to blimps.

HAV and Lockheed propose to sell their vehicles for around $40 million a pop. (“Pop” being, in a blimp context, maybe the wrong word.)

Who will buy them?

Oil producers and mining companies, say the blimps’ producers, and anyone else who needs to move personnel and heavy equipment to distant, unimproved locations.

In March, Lockheed announced that Hybrid Enterprises, its exclusive re-seller for the LMH-1, had signed a letter of intent with English aircraft operator Straightline Aviation (SLA), under which SLA can acquire as many as 12 airships for $480 million. Rob Binns, Hybrid’s CEO, tells Fortune that oil companies could very well be among his first customers.

 

 

Binns says the recent drop in oil and other commodity prices has forced energy producers to explore new ways to cut costs. “Sometimes they need to spend billions of dollars building infrastructure before they see their first dollar of revenue,” he explains, referring to the cost, say, of building an ice-road in the arctic. The price tag for such roads can be $80,000 or more per mile, assuming a company can get the necessary permits–a process that typically takes years.

But what if roads and permits were not needed? The new airships can lift enormous payloads (LMH-1, 20 tons; Airlander, 10). Their operating costs, compared to those of, say, a heavy-lift helicopter are low (one-seventh as much, by one estimate). The blimp makers say they will be able to operate in adverse weather; and, most importantly, they can come and go without need of airports or prepared runways.

Lockheed’s version has, on its underside, four hovercraft-like pods with reversible fans. “On landing,” says Binns, they “create a vacuum to stick you to the ground.” On takeoff, they release the craft back into the air. Airlander 10 lacks this feature, though Chris Daniels, head of partnerships and communications at HAV, tells Fortune something similar to it might be added to the Airlander in the future.

Daniels thinks Airlander could also be used for disaster relief (loitering over a disaster site for days at a time) or for luxury sight-seeing and travel. “There’s zero vibration,” he says, “zero noise. In flight, you could open up the windows.”

The two builders (and at least one independent analyst) think the market for hybrid airships could amount to $40 billion–perhaps 500 vehicles manufactured over 20 years.

An aerospace observer calls the advent of these craft “transformational,” “a big deal,” “iPhoneesque,” and “a long time coming.”

Long, indeed.

The last time Fortune wrote seriously about airships was 1973, when U.S. energy prices had spiked, owing to an Arab oil embargo. At the time, aerospace giants like Lockheed took a fresh look at airships (which have been around since before 1900) because of their fuel efficiency. When energy prices subsided, so too did mainstream aviation’s interest in blimps.

Both LMH-1 and Airlander are fuel-efficient since, unlike airplanes, they get much of their lift not from burning fuel but from the buoyant gas inside them (about 80% for the former, and 60% for the latter). And vectored motors mounted on the hull and at the stern make them highly maneuverable.

It’s hard to say which of the dueling blimp companies is in the lead, since both have been tinkering with hybrid airships at least as far back as the U.S. Afghan war, when the Pentagon saw potential value in airships as aerial communications posts, eyes-in-the-sky, or as heavy-lift transports for troops and weapons. At the time, both Lockheed and HAV began to work on prototypes.

In fact, today’s Airlander is the former experimental Army airship LEMV, which HAV helped build and on which U.S. taxpayers spent some $50 million. After the Army pulled the plug on the program, LEMV went up for auction to bidders inside or outside the U.S. government. Hybrid Air Vehicles bought it for $300,000.

Asked how it feels to be going head-to-head with Lockheed, Chris Daniels says HAV welcomes the competition. The market, he says, is big enough for two competitors. “Having somebody with Lockheed Martin’s credibility,” he says, “validates the concept. It means their board had to be convinced that the technology works, that the market has been analyzed, that it makes sense commercially, and that somebody can make money.” For its part, Lockheed says it wishes Airlander the best.

Things haven’t always been so chummy.

Asked how two companies can be building what appears to be a blimp of the same design, and which one owns the intellectual property, Daniels says, “That’s a very good question,” and then declines to answer. “There are limits on what we can say, for reasons I can’t go into.”

California federal court filings show Lockheed sued a predecessor to HAV in 2007 for patent infringement. The suit was settled out of court. Someone who claims to be familiar with the settlement says, “It lets them [HAV] do what they’re doing, otherwise Lockheed would have sued them again.” Both companies decline to say whether any legal actions against one another are now pending.

Rob Binns says that, moving forward, Lockheed has the capacity to build one airship a month, “though that could be scaled up further, if there’s the demand.” The company, he says, plans to make its first delivery in late 2018.

Daniels says that the flight testing of Airlander 10, which is about to start, should take three to four months. The first production model could be ready for delivery in 2018–or about the same time as Lockheed’s. After that, deliveries could begin, with HAV able to build up to 12 Airlanders a year. “Our production,” he says, “is limited only by our expertise in-house and by our having a place to build. We have two hangars here that were used in the ‘20s and ‘30s.”

They’re not just any hangars.

They were built to house England’s R101, a government-built airship designed to carry 50 passengers in ocean-liner luxury to India and back. The R101 had promenades, deck chairs, cabins, and a smoking room. Lord Christopher Thomson, its Parliamentary patron, famously described it as “safe as a house, except for the millionth chance.”

On its maiden flight to India, it reached Beauvais, France, where it grazed a hill, burst into flame, and incinerated Thomson and all but six others aboard. The ashes of the dead are co-mingled today in a large stone tomb, a walking distance from Airlander’s hangars. The disaster put an end to England’s airship ambitions–until now.

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By Alan Farnham
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