On Wednesday, United Airlines announced plans to purchase up to 200 flying taxis from Archer — an electric aircraft startup based in Palo Alto California — a deal estimated to be worth $1 billion.
The Wall Street Journal reported that the “tentative agreement is a stamp of approval for Archer, which said Wednesday that it will go public through a combination with a special-purpose acquisition company in a deal that values the combined company at about $3.8 billion.”
United Airlines is partnering with regional carrier Mesa Air Group and plan to use the flying taxis to “whisk passengers over congested highways to hub airports.” The purchase comes as “the airline industry seeks new technologies to reduce its carbon footprint.”
According to Archer, the taxis “will be capable of flying 60 miles at 150 miles an hour,” with United claiming that their use “could nearly halve carbon dioxide emissions for passengers traveling from Hollywood to Los Angeles International Airport.”
According to Fortune, “Archer has lined up some big-name backers that are putting money into the new public company,” including Stellantis (which owns Fiat Chrysler), the venture arm of Exor (the Agnelli family’s holding company), Mubadala Capital, the Emirati sovereign wealth fund, Putnam Investments, and Federated Hermes Kaufmann Funds. “Collectively,” the Fortune report says, “those investors are putting $600 million into the new company.”
In addition, “billionaire financier Ken Moelis and Jet.com founder and former Walmart e-commerce executive Marc Lore” are investing $30 million.
The BBC reported that Archer’s flying taxis “will need regulatory approval before the purchase can go ahead,” with United Airlines and Mesa Air Group having the “option to buy another $500m worth of aircraft under the deal.”
“With the right technology, we can curb the impact aircraft have on the planet, but we have to identify the next generation of companies who will make this a reality early and find ways to help them get off the ground,” United Airlines chief executive Scott Kirby said in a statement.
The Associated Press also reported that “[in] December, United pledged to offset all its carbon emissions by 2050 in part by investing in technology to remove carbon from the air and bury it.”