American Airlines staked its position in the electric vertical takeoff and landing (eVTOL) market. The carrier announced an investment in UK-based Vertical Aerospace as part of an order for up to 250 aircraft, subject to certain future agreed upon milestones and other terms.
Emerging technologies are critical in the race to reduce carbon emissions and we are excited to partner with Vertical to develop the next generation of electric aircraft.– Derek Kerr, Chief Financial Officer at American
Aircraft leasing giant Avolon also announced a massive order, for up to 500 of the aircraft.
Our order with Vertical will also accelerate the inevitable commercial roll-out of zero emissions aircraft. Before the end of this decade, we expect zero emission urban air mobility, enabled by eVTOLs, to play an increasingly important role in the global commercial aviation market.– Dómhnal Slattery, Avolon CEO
Vertical is developing the VA-X4, a zero-carbon aircraft that can carry four passengers and a pilot, and fly at speeds up to 200 mph over a range of over 100 miles.
These aircraft could potentially transport customers quickly around urban city centers and to airports. Vertical plans to conduct its first test flight of the VA-X4 later this year, with certification of the aircraft as early as 2024.
As we all work towards a future beyond fossil fuels, we are delighted to be partnering with American Airlines. We share their passion for innovation and excellence and believe that by working together we will help make carbon free flight a reality for millions of passengers.– Stephen Fitzpatrick, Vertical Chief Executive and Founder
If fully executed, American’s 250–aircraft order represents a potential $1 billion commitment. American also holds options for 100 more of the VA-X4. The Avolon order comes in at $1.25 billion, with options on another $750 million worth of aircraft.
American also expects to make a $25 million investment in Vertical through a private investment in public equity (PIPE) transaction. Avolon is listed as an equity investor in the company but the stake size is not disclosed.
American’s deal appears similar to that reached by United Airlines and Archer from February. That agreement also called for a couple hundred aircraft to be acquired, subject to various conditions, and operate as part of the company’s network connecting travelers to the airport for onward flights.
(*) That deal, much like today’s announcements, also hinges on the manufacturer reaching various milestones, including certification by the FAA. Given the state of the industry today and the uncertainty about funding for developing these aircraft the orders should be seen as soft, though certainly a big step forward. And it is unlikely that significant funds changed hands today, beyond the $25 million we know about from American and likely a similar stake from Avolon. That’s not enough to get the company through development and certification to production.
Longer range considerations
Both the VA-X4 and Archer’s eVTOL offer a relatively short operating range, from 60-100 miles. That’s great for helping passengers trying to get to the airport for a flight on a jet but does not yet address the environmental challenges of the longer flights. As battery technology improves (or a switch to Hydrogen takes hold) that range could expand significantly.
Other options include electrification of existing aircraft designs, such as the MagniX-powered Harbour Air Beaver prop. Since its first flight in December 2019 the technology has evolved significantly. There have also been plenty of missteps in the market as well. A hydrogen-powered flight last September was more battery-powered than initially expected, raising questions about power density and industry evolution.
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