United Airlines collects deposit for air taxis

United Airlines collects deposit for air taxis

United Airlines Holdings Inc. UAL 4.44% has made a $10 million down payment for 100 electric air taxis, a sign the airline has increasing confidence in the emerging technology.

United and a regional airline it works with made a 0.23% investment in Archer Aviation Inc. ACHR last year and reached a tentative agreement to purchase up to 200 of the air taxis the San Francisco Bay Area-based company is developing. Other airlines and leasing companies have announced their own investments in air taxi startups and pre-orders. But the planes haven’t yet been approved by regulators to carry passengers, and customers generally didn’t have to deposit cash.

The planes developed by Archer and its competitors take off and land vertically like helicopters. Airlines hope they will be able to funnel customers across cities, taking them to and from hub airports via congested highways, while reducing carbon emissions for such travel.

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United and Archer said United will be the launch customer for the four-passenger plane Archer is working on – the latest indication that traditional airlines are seeing a place for the new technology in their business as they are under pressure to Find ways to reduce their carbon footprint.

If eVTOL aircraft companies are to achieve their commercial goal of becoming flying taxis, they must first ensure their aircraft are quiet enough to operate in cities without disturbing local residents. The WSJ’s George Downs is studying how quiet these planes need to be to take off. Photocomposite: George Downs

Electric air taxi companies have developed and tested vehicles, but must obtain approval from regulators before launching commercial services, or customers who buy the aircraft. In the United States, the Federal Aviation Administration examines aircraft, works on pilot requirements and examines how planned vehicles can be integrated into the airspace.

Agency executives said the FAA is looking to meet deadlines that would allow at least some companies to certify their vehicles as early as 2024. Archer expects to receive certification by the end of this year and then begin commercial operations, chief executive Adam Goldstein said.

According to Mr. Goldstein, the company’s technology, funding and regulatory framework are mature enough that customers like United are ready to start taking business.

“There’s a lot of talk in the industry about orders, a lot about paper commitments, but this is the first real cash commitment,” he said.

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American Airlines Group Inc., which bought Vertical Aerospace Ltd. for $25 million last year. invested, another electric aircraft start-up, last month committed to making upfront payments for 50 electric take-off and landing electric planes, and confirmed reservations for delivery slots, but that money hasn’t changed hands yet.

Archer, Vertical and a host of other startups have pursued IPOs over the past two years as investors pour billions of dollars into the sector. Many are listed by blank check companies known as SPACs, but most are trading well below their asking price. Archer shares have fallen over 50% since listing in September.

Archer is also embroiled in a lawsuit with Wisk Aero LLC, a rival electric air taxi company that counts Boeing Co. as an investor. Wisk sued Archer last year, alleging that the company copied its design, misappropriated its trade secrets, and infringed on its patents.

Archer has denied the allegations and has filed certain counterclaims alleging Wisk made false statements in order to tarnish his reputation and meddle with his business. Archer has also filed a lawsuit against Boeing.

A federal trial over Wisk’s lawsuit and Archer’s counterclaims is scheduled for next August.

A spokeswoman for Archer said she was pleased with the way the case was progressing. Wisk and Boeing spokesmen declined to comment. United declined to comment on the suit.

Electric air taxi companies also face challenges when it comes to ensuring they have surfaces on the ground for takeoff and landing and battery packs that power the vehicles.

Michael Leskinen, president of United’s early-stage technologies venture capital fund, said United had become more confident in both Archer’s ability to raise enough money and the direction the technology was taking in the past year and a half since its initial investment Moved things like batteries for the plane.

United is beginning to make more concrete plans for where it will deploy its new air taxis and will likely announce routes in the coming months, Mr Leskinen said. United initially plans to use the plane in one or two of the congested cities where it has airport hubs, though it hasn’t yet determined which ones.

Prices will be comparable to the Uber Black service, Mr Leskinen said, where a ride from Manhattan to a New York airport could cost between $110 and $120, although Mr Leskinen said that could go down over time. Rides in the electric air taxis will compete with airport rides in cars and ride-sharing services, he said.

write to Alison Sider at [email protected] and Micah Maidenberg at [email protected]

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