United Airlines announced this morning that it has made a commitment of more than a billion dollars to electric aircraft through a partnership with Archer Aviation to develop air taxis for urban markets.
United, together with Mesa Airlines, would acquire a fleet of up to 200 of these electric aircraft that would be operated by a partner and are expected to give customers a quick, economical and low-carbon way to get to United’s hub airports and commute in dense urban environments within the next five years.
…With today’s technology, Archer’s aircraft are designed to travel distances of up to 60 miles at speeds of up to 150 miles per hour and future models will be designed to travel faster and further.
Credit: Archer Aviation
Archer says that they provide a $50 cost per passenger (based on operating full) from Manhattan to New York JFK. That’s less than hiring an UberX, but of course that’s not the ticket price that’s the airline’s cost. They offer comparable speed at a fraction of the cost of a helicopter, while being a better environmental option. The airline sees this investment in convert with its direct carbon capture play as part of a broader climate strategy.
As part of the deal, Archer merges with a SPAC to go public under ticker symbol ACHR at a $3.8 billion valuation. United is contributing an undisclosed amount of funding to this transaction, and its aircraft order is valued at a billion dollars with options for additional aircraft worth $500 million. The company’s full investor presentation can be found here.
United Airlines is making this huge investment in urban air mobility while asking the federal government for a third bailout under threat of furloughs effective in April. Since United would capture most of the money from the proposed bailout for themselves, spending only a small fraction on employees who would have been furloughed, this would amount to taxpayers (you) paying for United’s aircraft play without even getting a ticket.
On the other hand, what else are they supposed to do with all the excess cash from the second government bailout, since they aren’t allowed to buy back stock or pay dividends as a condition of receiving those funds?
Well that is lovely.
Does UA not get the optics of spending this sort of coin when it is at the public trough taking bailout money? Perhaps the transaction should be more transparent, with the Federal Government taking what it might give UA and make an investment for the taxpayers’ benefit.
This administration is big on green energy. UA will certainly earn favor with the feds when it comes hat in hand for more bailout money, pointing to projects like this. Our government, both Republican and Democrat, are fleecing us every which way. The sad thing is not enough people give a shit. They’re more interested in seeing their side win at all costs. So we kind of deserve this. But it’s not sustainable in the long run. It saddens me to look at my grandchildren, thinking about what we are doing to their futures.
I’m sure United isn’t writing a check in any significant amount any time soon, and it’s unclear how much of the money will really come from Mesa rather than United. Mesa has gotten almost $300 million in government funds, so they are feeding from the same trough. The more interesting question is where they will get the slots at congested (in normal times) hub airports, even using VTOL using helicopter capacity instead of runway capacity. It also makes me wonder how much battery capacity is held in reserve for divert requirements. The vertical takeoff and landing capability does allow for more flexibility in divert requirements, but urban areas complicate this, with fewer open areas such can be used for diversion.
If they get can get to 200 miles plus divert capacity, it starts getting really interesting for connecting smaller airports (or even communities without airports) to hubs.
The United Dumpster Fire continues to get bigger.
@jfhscott Optics? Who cares about optics? 99 out of 100 people don’t realize this is happening, it’s “free” money and we live in a society where money rules it all. To be clear, I’m not condoning the behavior of any airline. In fact, I was opposed to the first bailout. But it’s proven that when there is no accountability or repercussions, the process will continue and the hole gets deeper. We’ve now reached a point where EVERY business is too big to fail. Banks! Airlines! Restaurants? …feel free to tell me when you see an exception… Amazon? Apple? Hospitals? Cities?
What a complete joke, United gets a second bailout and is ringing the bells for a third yet they have no problem dropping this kind of money on a pipedream?? I used to think Mr Kirby was a shrewd operator but this proves how tone deaf he and the entire c-suite at United is nowadays. Maybe they should spend the money on right-sizing their company like so many others have had to, air travel will never be back to 2019 levels, deal with it!
Just imagine the congestion and ATC problems with these aircraft if $50 fares between Manhattan and JFK/LGA/EWR etc. that is if they can figure out where they would takeoff and land.
I love a world where a major corporation (through no fault of its own) finds itself in financial hardship and thinks a good solution is to curry favor with the ruling elites by investing in a virtue-signalling, speculative venture that is way beyond the core competency of the corporation.
United’s best hope? That they get issued shares in this company and it goes public. And then UA sells the shares to the suckers (I mean “investors”)..
BTW, worth noting that this is a fixed-wing aircraft that would need a runway to take off and land and is only designed to fly 60 miles. It would also be subject to the same ATC delays that currently hamper big city hub airports. Would you invest in that technology? Are you smoking something?
Chopsticks – this is a vertical takeoff and landing aircraft which transitions to using its wings for lift. Still, there are limited helipad sites, and a congested airspace.
Range is way too short. That plane is not green. Riding a donkey is better for the planet, not a flying taxi.
Even better, taking the subway to the airport. (Extend the N train from Ditmars Av to LGA would be a help.)
I just have to say that the majority of the comments for this article are smart and spot on. So glad there are still people out there that know what is really going on around us. It’s unfortunate to many people do not!