Combined Seats $1 billion order for electric aircraft, investment in manufacturers
Gary Leff on February 10, 2021.
United Airlines announced this morning that it will invest more than $1 billion in electric aircraft as part of a partnership with Archer Airlines to develop air cabs for urban markets.
United will work with Mesa Airlines to purchase a fleet of 200 of these electric aircraft that will be operated by the partner. They are expected to offer customers a fast, inexpensive and environmentally friendly way to reach United’s hubs and travel in densely populated urban areas over the next five years.
…With current technology, Archer aircraft are designed for a range of up to 60 miles at a maximum speed of 150 miles per hour, and future models will be designed for faster and longer flights.
Credit: Archer Aviation
Archer says they offer a price of $50 per passenger (based on full operating costs) from Manhattan to New York JFK. That’s less than UberX rents, but of course it’s not the price of a ticket, it’s the price of an airline ticket. They offer comparable speed for a fraction of the cost of a helicopter, while still being the best environmental option. The airline sees this investment in modernizing direct carbon capture as part of a broader climate strategy.
As part of the deal, Archer merged with SPAC and went public under the symbol ACHR, for a value of $3.8 billion. United is contributing an undisclosed amount to finance the transaction, and the aircraft order is valued at $1 billion with options for another $500 million worth of aircraft. The company’s full presentation to investors is available here.
United Airlines is making this huge investment in urban air mobility by asking the federal government for a third bailout, under threat of layoffs beginning in April. Since United will receive most of the money from the proposed bailout for itself and spend only a small portion on laid-off workers, this would amount to taxpayers (i.e., you) paying for United’s air fare without even getting a ticket.
On the other hand, what are they supposed to do with all this extra money from the government’s second bailout, since they are not allowed to buy back shares or pay dividends as a condition of receiving these funds?
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