United Airlines believes that one day you could take a small electric aircraft to get to the airport.
The airline joins other investors in supporting Archer, a start-up that develops electric take-off and landing planes. If Archer can obtain the eVTOL certificate from the Federal Aviation Administration, it expects to deliver the first aircraft in 2024.
“It’s pretty incredible to think about 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 reach the market first and really helps us accelerate our timeline.”
Archer, based in Palo Alto, California, which was founded three years ago, will unveil its first complete eVTOL aircraft later this year. The company also intends to develop and produce the battery that will power the aircraft. Archer said its pilot eVTOL is designed to carry up to four passengers up to 60 miles at speeds that could reach 150 mph.
United Airlines CEO Scott Kirby
Chip Somodevilla | Getty Images
To move from concept to certified aircraft, Archer is raising $ 1.1 billion through a SPAC merger with Atlas Crest Investment Corp. The merger is valued at $ 3.8 billion. Among those who support 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 of the eVTOL aircraft. United has placed a $ 1 billion order for 200 Archer eVTOL aircraft, with the option to purchase another $ 100 million for $ 500 million.
“Working with Archer, United is showing the aviation industry that it is time to adopt cleaner and more efficient modes of transportation,” United CEO Scott Kirby said 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 $ 1 million investment in a joint venture to capture carbon.
United estimates that passengers making the 13-mile journey from Hollywood to Los Angeles International Airport with an Archer eVTOL aircraft could reduce CO2 emissions by 50%.
“Archer eVTOL’s design, manufacturing model and engineering expertise have the clear potential to change the way people commute to major metropolitan cities around the world,” Kirby said.
The eVTOL market has exploded in recent years, with Deloitte estimating that 200 companies around the world are developing aircraft. Many are for cargo operations, while others focus on passenger travel, which is expected to be a $ 4 billion market by 2025 and $ 57 billion by 2035, according to Deloitte.
In December, California-based Joby bought Uber Elevate with the intention of having eVTOL aircraft enter service immediately after 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 “it could later turn into a cost-effective, cost-effective method. time to travel short to medium distances, eventually taking the share of car and airline companies. “
Archer co-founder and co-CEO Brett Adcock believes his company’s eVTOL will disrupt the market share. “We want this to be a truly affordable mass transit solution,” Adcock said. “Our entry point is about $ 3 per passenger in these markets, which is roughly the equivalent of a company that can participate in today’s travel.”
Although the cost in a day can be attractive for United passengers looking for a quick and cheap way to the airport, the airline is far from receiving the delivery of an Archer eVTOL or determining how it would fit into its network. It remains to be seen whether United pilots will fly the powered aircraft or whether they will be operated by Mesa Airlines, which handles United regional services to many smaller markets.
—CanBC’s Meghan Reeder contributed to this report.