United Airlines believes that one day you can take a small electric aircraft to get to the airport.
The airline is teaming up with other investors who support Archer, a startup that develops electric takeoff and vertical landing aircraft. If Archer manages to obtain the Federal Aviation Administration eVTOL certificate, it expects to deliver the first aircraft in 2024.
“It’s amazing to think how big this market can be,” said Archer co-founder and co-CEO Adam Goldstein. “The partnership with United really gives us a chance to get to the market first and it really helps us to accelerate our schedule.”
Archer of Palo Alto, California, founded three years ago, will present its first full-scale eVTOL aircraft later this year. The company also plans to develop and manufacture the battery that will power the aircraft. Archer said his piloted eVTOL was designed to carry up to four passengers for up to 60 miles at speeds that can reach 150 mph.
Scott Kirby, CEO of United Airlines
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To move from concept to certified aircraft, Archer is raising $ 1.1 billion through a merger between SPAC and Atlas Crest Investment Corp. The merger is valued at $ 3.8 billion. Among those who supported the agreement, two companies stand out: Stellantis and United Airlines.
Stellantis, the new name for the recently merged companies of PSA Peugeot and Fiat Chrysler, is working with Archer to manufacture the carbon fiber fuselage for the eVTOL aircraft. United placed an order for $ 1 billion for 200 Archer eVTOL aircraft, with an option to purchase an additional 100 for $ 500 million.
“By working with Archer, United is showing the aviation industry that now is the time to adopt cleaner and more efficient means of transport,” said United CEO Scott Kirby in a statement announcing Archer SPAC. Investing in clean initiatives has become part of Kirby’s strategy to reduce United’s carbon footprint. In December, the airline announced a multimillion dollar investment in a carbon capture joint venture.
United estimates that passengers making the 21-kilometer journey from Hollywood to Los Angeles International Airport on an Archer eVTOL aircraft can reduce CO2 emissions by 50%.
“Archer’s eVTOL project, manufacturing model and engineering expertise have the clear potential to change the way people move around the world’s major metropolitan cities,” said Kirby.
The eVTOL market has exploded in recent years, with Deloitte’s estimate of 200 companies worldwide developing aircraft. Many are for cargo operations and others are focused on passenger travel, which is expected to be a $ 4 billion market in 2025 and $ 57 billion in 2035, according to Deloitte.
In December, California-based Joby bought the Uber Elevate with plans to have eVTOL aircraft entering service as early as 2024.
In a research note last month, Morgan Stanley analyst Rajeev Lalwani said that the urban air mobility market is likely to start as a niche service, but “may later turn into an economical and time-efficient method of traveling short to medium distances, eventually taking the participation of airlines and automobiles. “
Archer co-founder and co-CEO Brett Adcock believes his company’s eVTOL will disrupt the free ride market. “We want this to be a really affordable mass market transportation solution,” said Adcock. “Our entry point is about $ 3 per passenger per mile in these markets, which is roughly equivalent to perhaps a ride-sharing company today.”
While the cost may someday be attractive to United passengers looking for a quick, cheap way to the airport, the airline is a long way from receiving an Archer eVTOL or determining how it would fit into its network. It remains to be determined whether United pilots would fly electric-powered aircraft or whether they would be operated by Mesa Airlines, which manages United’s regional service for many smaller markets.
—Meghan Reeder of CNBC contributed to this report.