United Airlines Holdings paid a deposit of more than $10 million for 100 flying taxis, an indication that the airline is getting confident about the new technology.
United, along with a local airline it partnered with last year, invested in Archer Aviation and reached a preliminary agreement to purchase up to 200 flying taxis developed by the San Francisco-based company. Other airlines and leasing companies have announced their own investments in flying taxi startups and initial orders. But the aircraft have not yet been approved by regulators to fly passengers, and the buying companies in general have not yet been asked to hand over cash to the companies that build the taxis.
The aircraft being developed by Archer and its rivals take off and land vertically like helicopters. The airlines hope to be able to fly passengers quickly around cities, bypass traffic jams and transport passengers from airports at the same time as reducing the carbon emissions that such trips cause.
United and Archer said United would be the first customer for the four-passenger aircraft the company is developing — the latest indication that traditional airlines see a place for the new technology in their businesses as they face pressure to find ways to reduce their carbon footprint.
It is expected to get a license and start operations by the end of the year
Electric flying taxi companies are developing and testing aircraft, but must get approval from regulators before they or the customers who buy the vehicles can launch commercial taxi-related services. In the USA, the Federal Aviation Authority (FAA) inspects aircraft, works on writing employment criteria for pilots and examines how to integrate the planned aircraft into the airspace.
Authority leaders said the FAA is committed to meeting schedules that will allow at least some of the companies to obtain a license for the aircraft by early 2024. Archer expects to obtain a license by the end of the year and begin commercial flights after that, CEO Adam Goldstein said.
The company’s technology, financing and regulatory framework for the industry have matured to the point where customers like United are willing to commit to orders, Goldstein said. “There’s a lot of talk about orders in the industry, a lot of talk about paper commitments, but this is the first real cash commitment,” he said.
American Airlines, which last year invested $25 million in Vertical Aerospace, another electric aircraft startup, last month pledged to make pre-delivery payments on 50 vertical takeoff and landing aircraft and confirmed orders for delivery times, though no money has yet changed hands.
Archer, Vertical and a number of other startups have sought to be listed on the stock exchange in the past two years, while investors poured billions of dollars into investments in this area. Many companies entered the stock exchange through a merger with open check companies, but most of them are traded at a price lower than the issue price. Archer shares have fallen more than 50% since the company went public in September.
Rivalry in the sky
In addition, Archer is in a legal dispute with Wisk Aero, a rival air taxi company in which Boeing is one of the investors. Wisk sued Archer last year, claiming the company copied its design — stealing trade secrets and infringing its patents. Archer denied the allegation and filed several counterclaims in response, accusing Wisk of making false claims to damage Archer’s reputation and disrupt its business. Also, Archer filed a lawsuit against Boeing. The trial of Wisk’s lawsuit and Archer’s counterclaim is expected to be held in federal court next August. An Archer spokeswoman said the company is satisfied with how the lawsuit is progressing so far. Spokesmen for Wisk and Boeing declined to comment. United declined to comment on the lawsuit.
Electric air taxi companies also face challenges related to finding places on the ground to take off and land, as well as challenges related to the battery cells that power the aircraft.
Michael Laskinen, president of United’s venture capital fund for early-stage technologies, said United has become more confident in the past year and a half since its initial investment, adding that Archer has been able to raise enough money. He also expressed optimism about technology for developing battery cells for the aircraft.
Luxury shuttle service to the airport
United is starting to make more concrete plans about where it will operate its flying taxis and will likely announce the routes in the coming months, Laskinen said. United initially planned to use the aircraft in one or two cities that have an airport and suffer from traffic congestion, although the company has not yet decided which cities to focus on.
Prices will be comparable to Uber’s luxury service, Uber Black, Laskinen said. A trip from Manhattan to the New York airport can cost between $110 and $120, although Laskinen said the price may drop over time. Electric flying taxi rides will compete with airport rides and ride-sharing services, he said.