Archer CEO: Benefits of recent aircraft down payment go two ways
By Paul Brinkmann|August 12, 2022
Air taxi developer also reveals name of production aircraft
United Airlines’ $10 million down payment to Archer Aviation for 100 of the company’s forthcoming electric rotorcraft won’t just be a boon to Archer, the company’s CEO told investors during an earnings call Wednesday.
Something “that was really important here is that they’re securing their spot in 2025. And so there’s going to be extremely limited supply in the early years of the eVTOL market,” CEO Adam Goldstein said, referring to the electric vertical takeoff and landing aircraft in development by his company and others for local travel.
“So, it’s really my belief that Archer will be one of, if not the only company in 2025, to have aircraft that you can actually buy and operate in that year,” he added.
The production aircraft, which Goldstein announced will be called Midnight, are not yet being built, but he expressed confidence that Archer will be ready to deliver them in 2025.
Goldstein said United’s payment shows its faith “in eVTOL as an industry, the team that we’ve been building and really just the maturity of our technology platform.”
Archer has been test flying its two-seat Maker demonstrator since last December by remote control with no one on board, with plans to achieve transition from vertical lift to forward flight by this December. But the company also revealed Wednesday that it has completed preliminary design review of its production aircraft, which will be a larger version of the demonstrator.
Archer didn’t reveal any new details about the Midnight design, but the company has been planning for it to carry four passengers and a pilot.
Goldstein said Archer also intends to operate its own aircraft, in addition to selling units to buyers like United.
The United payment follows an announcement in July by U.K.-based Vertical Aerospace that American Airlines will be making a pre-delivery payment for 50 of Vertical’s electric VX4s, but the timeline and amount of such payment wasn’t disclosed.
Analysts and experts who follow the advanced air mobility industry had mixed reactions to the significance of United’s payment.
Robin Riedel, head of consulting firm McKinsey’s Center for Future Mobility, said the payment appears to be the first time money actually has changed hands in an order for eVTOLs.
“It is good to see some more traditional arrangements entering the market and pre-delivery payments being announced, as that shows a higher level of commitment to this new form of mobility and also provides some additional cash, though their ability to use it for operations depends on the specifics of the agreements,” Riedel said.
Bank of America analyst Ron Epstein was less impressed.
“I don’t view such commitments as significant as it is unclear how binding they are, whether they are refundable or not,” Epstein said in an email response to questions. “And $10 million is actually a small amount. It funds very few aircraft. Clearly, it’s more positive than getting no payment, but its actual significant should not be blown out of proportion.”
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