Otto’s bet on the super-midsize segment
Spotting a UFO is not unheard of at 50,000ft, but how about if everything you set eyes on has something supernatural about it?
That is the plan for passengers flying on Otto Aerospace’s latest aircraft project Phantom 3500, a windowless business jet that will provide those in the cabin with “supernatural vision” using camera feeds and HD screens where the windows would be.
If Otto Aerospace’s first experimental aircraft Celera 500L evoked steam-punk tinted memories of the films of renowned Japanese animators Studio Ghibli, then its latest project Phantom 3500 will fling you right back to present day.
The Texas-based company is targeting the super-midsize business jet market with its Phantom 3500 which has in-house built laminar flow technology at the heart of its design.
Laminar flow refers to the streamlined airflow over wings and other surfaces, where air molecules move in parallel layers with minimal mixing, greatly reducing drag and improving fuel efficiency versus turbulent airflow. Ever turned a tap on and the water appears to be completely still? It is the same principal.
Having closed its Series A earlier this year and with a Series B already kicked off, Otto has pencilled in a first test flight for mid-2027. The company hopes to certify with the FAA and enter service in late 2030.
According to Scott Drennan, president and COO, Otto Aerospace, the two key performance improvements in the Phantom 3500 versus its predecessor are speed and range.
“The Phantom 3500 is a transonic aircraft that fits squarely in the middle of the super-mid business jet category. We’re talking about cruise speeds of Mach 0.78 to 0.80. Our maximum mach operating speed [MMO] is about 0.80 and we’ll probably cruise around 0.78. So that’s a big change from the subsonic performance of the Celera.”
Otto is also targeting a 3,200nm range with five people on board, including NBAA reserves. Plus, a maximum range of 3,500nm.
“The other performance piece is the customer experience. It’s often seen as adjacent to performance, but in this space, it’s essential. The Phantom 3500 is a Part 23 aircraft, yet its unique fuselage geometry gives us the freedom to deliver cabin dimensions typically associated with Part 25 super-midsize jets – without sacrificing range or efficiency. The result is a cabin that not only matches the size of super-midsize jets but feels roomier.”
Phantom 3500 will feature a flat floor cabin which provides 6ft 5” of clearance at its max cross section and 7ft 2” across the bottom.
The big win is the laminar flow performance on Otto’s proprietary wing design. Laminar flow performance on the wing of the 500L was somewhere in the region of 30-40% coverage, the Phantom 3500 achieves 85-90% coverage.
“This is huge deal in itself, but at transonic speeds this becomes even greater,” says Drennan.
In terms of field performance, Otto is in the 3,200ft range for balanced field performance, which opens up more airports than the current roster of super-mids can service.
“The improved balanced field performance, better climb and cruise performance is all down to our laminar flow wing design and its large size which provides increased lift.”
Learnings from Celera
Drennan believes the Celera programme was “super valuable” to the design and development of the Phantom 3500.
“It was actually the reason I joined Otto. The Celera had direct measurements of thrust fuel consumption and laminar flow transition lines that you could see and verify was real. To me, that’s been a huge bonus for bringing the right kind of people on to create a team that had the aerospace discipline to accomplish full blown design, build and production of this aircraft.”
The other piece is that it proved that laminar flow was pragmatic to have, says Drennan. Laminar flow has been well known for a long time; the first tests were conducted in the 1930s.
“But people have been asking themselves the question, how do we have it in a pragmatic design so that it’s designed in, built in and stays in? Something that has kind of become our mantra,” explains Drennan.
“The Celera showed you could actually build, design and keep laminar flow on an aircraft that has a good mission profile. The reason we moved out of the market segment the Celera 500L occupied was to get squarely in the sweet spot of the business jet market for our Phantom 3500. There was nothing wrong, per se, with the Celera and its mission.”
Entering the business jet market
Becoming a new business aircraft OEM is not easy. Embraer has done it effectively, but even a giant like Honda has had difficulties carving out any meaningful market share.
“When I first looked at Otto, the team and technical data was there. As I get further in my career, I want to ensure that both of those things go into a business case that really makes sense.”
Drennan says the total addressable market (TAM) in the super-midsize segment is about $24bn. “So no more of these market creation efforts as you see with eVTOL or eCTOL. There is a market there and you can attack it if you can do the technical things right.”
He says there’s also an opportunity to do well on the sustainability front. Super-midsize aircraft typically consume 300 gallons of fuel per hour. Phantom 3500 reduces that fuel consumption figure down to about 100–115 gallons per hour.
“We have been promoting this idea of the synthesis cycle, a virtuous cycle where less fuel means less fuel payload, which means smaller structures and smaller engines to produce the thrust.
“Suddenly you’re at half the gross weight of our competitors. Not only does the sustainability opportunity present itself, the economic opportunity does too. On top of having a market that you’re ready to attack, you can create much higher margins that you normally wouldn’t be able to do if you were a steady state OEM already in the business.”
In terms of price it is too early to give an exact figure, however Drennan says the Phantom 3500 will cost about 50% less to purchase and to operate than current midsize business aircraft.
Off the shelf eases regulatory burden
The mantra, as Drennan noted earlier, is laser-focused on achieving optimal laminar flow design, which also means the company is happy to use commercial off-the-shelf components for the rest of the aircraft where possible.
“Our design philosophy is one miracle at a time, and that is to achieve as much natural laminar flow as we can get. What I mean by that is if it’s not directly linked to the geometry of the OML and the Reynolds number that you fly at, everything else we can possibly acquire commercially off-the-shelf, we will do so.”
Otto has elected to use Williams’ FJ44-4 engines, a slightly modified fuel system from Secondo Mona, a landing gear and actuation system from Mecaer Aviation and avionics from Garmin.
“Concentrating on the laminar flow does a couple of things for us. It first and foremost allows us to go to the FAA and present a very secure certification path.”
In fact, when Otto held its familiarisation meeting with the FAA, the agency said there is nothing new and novel on the Phantom 3500. Drennan, a man who has forged a career in aerospace innovation, said that remark stung for about five minutes. But he soon remembered the Phantom’s innovation centres around a performance measure, not things that cause the FAA to worry about safety.
There is one exception to this rule, but it is not flight critical, says Drennan. The windows, or lack thereof.
“You’ve noticed that we have no windows on the passenger cabin. The FAA loves that from a structural safety standpoint. Inside we have supernatural vision instead, which are camera feeds and a digital window system. That’ll be a new system, but development will not require DAL A certification, only basic DO-178 and DO-160 levels.”
Otto benefits from weight savings of about 50-75lbs per window by taking them out. Also, if a fatigue crack is going to form, it’s going to form around the openings in the pressurised vessel. “So that helps us from a weight standpoint, doubly speaking, because we don’t have to worry about the endurance.”
The green discount
Aside from mantras and philosophies, Otto also has a mission — to reduce the energy required for flight. This leaves the company with a list of possible solutions to achieve this, including sustainable aviation fuel, hybrid-electric and hydrogen.
Otto has elected to focus first on sustainable aviation fuel (SAF). The Williams FJ44-4 engines it will use are already certified for SAF, as is the Secondo Mona fuel system. “Plus, we are using known coatings in our wet wing to make sure that fuel in combination with any small water content never creates biological agents. That’s one of the issues with SAF.”
“What I love about it most is we are offering a green discount. When you take our fuel burn and our operating costs into account, you can use some of those savings to put more expensive SAF on board because you believe in sustainability. But you’re still operating at a discount relative to competitors burning Jet-A or SAF.”
Target market
Otto would like to sell to big fleet operators such as NetJets, Flexjet and Vistajet. However, individuals or flight departments operating under Part 91 would also be a target.
Otto plans to go the classic OEM route and concentrate on selling its aircraft to customers. The company is hoping to “partner smartly” where it can on elements such maintenance, repair and overhaul and pilot training, says Drennan.
“We are not one of these startups that thinks we can do everything. We’re minimally vertically integrated. So to take on MRO across the globe or try to be an operator immediately, for us that’s not a good place to start. Let operators do what they do best and make sure we’re there for them as a world class OEM partner.”
Programme progress and Florida move
The company is in middle of a preliminary design phase (PDR) that is set to complete in November. The biggest milestone after the PDR and critical design phase will be a first flight of flight test vehicle one (FTV 1), slated for the second half of 2027. According to Drennan, FTV 1 will be a production and performance representative aircraft, but it will not be FAA conforming. The plan is conform through FTV 2 to its last prototype FTV 4.
As noted earlier, certification is planned for late 2030.
Moving to Florida
Recently announced at the Paris Air Show 2025, the Florida deal includes a 125,000sqft hangar at Cecil Airport, Jacksonville, Florida. Otto has also took down the rights to 200 acres of land that will initially be developed in a 90-acre section. There it will build its manufacturing and MRO facilities and customer delivery centre.
Site selection process was a two-and-a-half-year process, says Drennan. “The first conversation I had with Florida and at least a dozen other states started happening in late 2022, early 2023. They all have very strong aerospace infrastructure, talent, industry bases.”
Otto began life out in California where the Celera was developed, but due to challenges including high costs, the company decided to ship out to Texas.
“We set up shop in Dallas Fort Worth and got a hangar at Meacham International Airport. That’s where we operate out of today. We have about a third of the company there and the rest works remotely throughout the country.”
To decide on its new facility location Otto made a selection matrix including factors such as talent rating, the weather, proximity to an airport and liveability for staff. Out of that came two areas: Dallas Fort Worth and Jacksonville.
“Jacksonville came out on top because of things like the landmass they had available for us and the total financial package. Not to say Texas isn’t competitive, and we are still interested in speaking with them about further expansion. Plus, we will continue to operate out of Meacham until our five-year lease is up.”
Meanwhile, see our Phantom 3500 Buyer’s and Investor’s Guide for more information on the aircraft.
