United Airlines believes that one day you can take a small electric plane to get to the airport.
The airline joins other investors backing Archer, a start-up developing electric vertical take-off and landing aircraft. If Archer can get its eVTOL certified by the Federal Aviation Administration, it expects to deliver the first aircraft in 2024.
“It’s pretty incredible to think how big this market can be,” said Adam Goldstein, Archer Co-Founder and Co-CEO. “The partnership with United really gives us the opportunity to be first to market and really helps us speed up our timeline.”
Palo Alto, California-based Archer, which was founded three years ago, will unveil its first full-scale eVTOL aircraft later this year. The company also plans to develop and manufacture the battery pack for the aircraft. Archer said his piloted eVTOL is designed to carry as many as four passengers up to 60 miles at speeds that can reach 240 mph.
Scott Kirby, CEO of United Airlines
Chip Somodevilla | Getty Images
To move from concept to certified aircraft, Archer raises $ 1.1 billion through a SPAC merger with Atlas Crest Investment Corp. The merger is estimated at $ 3.8 billion. Among those backing the deal, two companies stand out: Stellantis and United Airlines.
Stellantis, the new name for the recently merged PSA Peugeot and Fiat Chrysler companies, has partnered with Archer to manufacture the carbon fiber fuselage of the eVTOL aircraft. United has placed an order of $ 1 billion for 200 Archer eVTOL aircraft, with an option to purchase an additional 100 for $ 500 million.
“By partnering with Archer, United is showing the airline industry that now is the time to embrace cleaner, more efficient modes of transport,” said Scott Kirby, United’s CEO, in a release announcing the Archer SPAC. Investing in clean initiatives has become part of Kirby’s strategy to reduce United’s environmental footprint. In December, the airline announced a multi-million dollar investment in a joint venture to capture carbon.
United estimates that passengers who make the 21-mile journey from Hollywood to Los Angeles International Airport in an Archer eVTOL plane can reduce CO2 emissions by 50%.
“Archer’s eVTOL design, manufacturing model and engineering expertise have the clear potential to change the way people commute in major metropolitan cities around the world,” said Kirby.
The eVTOL market has exploded in recent years, and Deloitte estimates that 200 companies worldwide are developing aircraft. Many are for freight operations and others are focused on passenger travel, which is projected 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 plans to commission eVTOL aircraft by 2024.
In a research note last month, Morgan Stanley analyst Rajeev Lalwani said the urban air mobility market is likely to start out as a niche service, but could later “ turn into a cost-effective, time-saving method of covering short to medium distances, and eventually share of cars and airlines. “
Archer co-founder and co-CEO Brett Adcock believes his company’s eVTOL will disrupt the ride-share market. “We want this to be a truly affordable transportation solution for the general public,” said Adcock. “Our entry point is about $ 3 per passenger-mile in these markets, which is roughly equivalent to perhaps a ride-sharing company.”
While the cost may someday be attractive to United passengers looking for a quick and inexpensive way to the airport, the airline is still a long way from receiving an Archer eVTOL or determining how to get to the airport. network. It remains to be determined whether United pilots would pilot the electric-powered plane or if they would be served by Mesa Airlines, which handles United’s regional flights to much smaller markets.
—CNBC’s Meghan Reeder contributed to this report.