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?