United Airlines is set to purchase 200 flying vehicles from Archer as part of a wider investment in carbon footprint-reducing technologies.
Announced on Wednesday, the US airline said that Archer’s electric vertical takeoff and landing (eVTOL) aircraft could be used as air taxis in “urban markets” — such as for ferrying passengers to and from planes airside.
Under the terms of the deal, United will partner with Mesa Airlines to operate the 200-strong future fleet, which will “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.”
The airline’s plans to purchase $1 billion in eVTOL craft — with the option for a further $500 million in orders — must be approved by regulators. The craft, specifically designed for short-haul trips, will also need to meet United’s business and operating requirements before entering service.
United says that the craft, should they replace traditional shuttles and taxis, will help the firm reduce its carbon emissions as well as earn a “strong financial return.”
Archer’s craft is yet to be commercially available and little is known about the product in development beyond teaser images and plans to launch a test shuttle route between Hollywood and Los Angeles International Airport (LAX) in the future.
The companies say that the eVTOL craft will be able to travel up to 60 miles at 150mph — but the plan is for future designs to travel “faster and further.” The goal of commercial travel is intended to be met by 2024.
The purchase agreement also may indicate that Archer is worthwhile as an investment option for other corporate entities, and to this effect, the startup is intending to make use of the trust United appears to have placed in the company.
On the same day, Archer announced its intention to go public via a special purpose acquisition company (SPAC). SPAC mergers are becoming a common way to enter the stock market without going through the traditional regulatory path, which can be time-consuming and expensive.
Archer will merge with Atlas Crest Investment Corp., the SPAC company, and hopes to enter the New York Stock Exchange (NYSE) under the ticket “ACHR” by Q2 2021.
United Airlines, Stellantis, and Exor’s venture unit, among other investors, will contribute toward roughly $1.1 billion in initial investment to the combined company. The pro forma equity value of the merge is slated as $3.8 billion at a $10.00 per share PIPE price.
“We’re thrilled to partner with Atlas Crest to help accelerate our goals of ushering in the next age of sustainable air mobility and enable human micro-exploration,” commented Brett Adcock, Archer co-founder and co-CEO. “By merging efforts with an industry innovator like Atlas Crest and one of the most successful entrepreneurs in finance, Ken Moelis, we’re confident Archer will transform consumer travel and everyday life.”
In related news, Archer and Fiat Chrysler Automobiles (FCA) recently entered into a supply chain agreement to improve logistics and share both composite material knowledge and engineering specialities.
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