Britain risks being left behind in the race for hypersonic travel

Britain’s aerospace industry used to do a good line in exotic aircraft straight out of an episode of Thunderbirds. There was the Fairey Rotodyne, a big part-helicopter, part-plane with rockets at the tips of its rotor. Noise, apparently, was a problem. The Saunders-Roe Princess was an enormous flying boat that arrived just in time to be out of date. Only one flew. Perhaps the raciest of all was HOTOL, a plan for an aircraft that took off, zoomed straight into space and landed back at an airport ready for its next flight.

London to Sydney in four hours was the headline and HOTOL (an acronym of horizontal take-off and landing) was all the rage in the mid-1980s. British Aerospace, now BAE Systems, championed it and Rolls-Royce came on board to make the engines. The government was keen, too, putting in money and making strenuous efforts to turn it into a pan-European project to take on the Americans in space. Eventually it ran out of backers (the Germans were keen, the French were not) and HOTOL died in 1989.

Except it never quite did. Alan Bond, one of the engineers who worked on the initial project, set up a company called Reaction Engines to keep the dream alive. That dream was not only cheap access to space but also sustained hypersonic flight, at five times the speed of sound or more, enough to make Concorde look like a slug.

Over the intervening decades Reaction has worked away steadily at the daunting technical challenges, staying afloat thanks to regular infusions of cash from the Ministry of Defence, the National Security Strategic Investment Fund, BAE, Rolls-Royce, investors from the Gulf and a long list of others.

Now, however, it is close to the end of the road, having all but run out of cash, something, it must be said, that has happened a few times in its 35-year history. Unless a last-minute deal with an investor can be struck, it may go into administration at the end of the month.

PwC has already been lined up to handle the process. If there is no deal, Britain will have lost what was once regarded as a promising technology company and a golden chance to regain the leadership in aerospace that was frittered away after the Second World War. The rosy view of Reaction and the merits of its technology now seems a very long way off.

Ironically, Reaction is stuttering just as many other governments are pouring money into super-fast flight. The United States and China are both making strenuous efforts on hypersonic weapons, motivated by the need to prepare for a potential future conflict in the Pacific, where distances are large and speed could be the deciding factor.

As well as state-backed programmes, there are private investors chasing what they think will be the next big thing. Sam Altman, the chief executive of Open AI, the maker of the ChatGPT artificial intelligence chatbot, led a recent fundraising by Hermeus, one of the leading American hypersonic contenders. The Houston-based Venus Aerospace has pulled in money from Prime Movers Lab, whose boss Dakin Sloss is one of America’s most influential science investors.

Airbus Ventures, the private equity division of the European aerospace group, also has money in Venus. AJ Piplica, the chief executive of Hermeus, told The Times last year that he was confident new hypersonic vehicles would become a reality because militaries were ready to spend the money to make it work.

Reaction’s big thing is the promise of an engine that will work efficiently not only at subsonic and supersonic speeds, but also much faster. At Mach 5 the incoming air is so hot it will melt the components of a normal jet engine. Reaction has made a refrigerator sufficiently fast and powerful to cool the air so that it can be burnt as a fuel, just like in a conventional engine. That rapid cooling has lots of other potential applications and in recent years Reaction has backed off the space aircraft idea in favour of licensing its technology to other companies, including Formula One motor racing teams.

It is also a member of a consortium selected by the Ministry of Defence to give the UK military its own hypersonic capability. And it has had some success. Last month it conducted a successful test in Colorado of an ordinary Rolls-Royce jet with the cooler on the front. It performed well at Mach 3.5, a decent step in the right direction. Reaction also sees itself as being a key part of the Aukus (Australia-UK-US) defence pact, which sets out plans for collaboration between the three partners on the development of hypersonic missiles.

Yet this progress has not been fast enough to prevent it running out of money. Reaction has been promising an awful lot for an awfully long time and some investors must be querying whether there will ever be any return. Two of its City backers, Artemis and Schroders, recently drastically cut the value of their stakes. Some think the way forward could be a pre-pack administration, with some of the existing investors being forced into writing down the size of their stakes to make way for new money.

Whatever the outcome, Reaction’s story illustrates the uncertain path faced by companies aiming for big technological leaps forward. Investors’ appetites for different ideas can wax and wane without any obvious pattern.

Reaction’s head office, on the Culham Campus on the outskirts of Oxford, is home to lots of other cutting-edge companies, including the Joint European Torus, a testbed for nuclear fusion. British attempts to harness fusion have been under way since the 1950s, falling in and out of favour with government and investor views of its likely chance of success.

At the moment fusion is all the rage, with the UK government putting in money and start-ups raising billions from Silicon Valley investors. If Reaction manages to pull off a Houdini-style escape from its current cash crunch, it must hope to survive long — and to deliver enough results — to come back into fashion.

Dominic O’Connell is business presenter for Times Radio