Archer Aviation takes billion-dollar eVTOL order from United Airlines

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Palo Alto’s Archer Aviation might’ve been a fairly late entrant into the emerging eVTOL market, but its brute-force approach to grabbing top talent has made big waves in the industry, and today it becomes the first eVTOL company with a major order on the books.

The US$1 billion-dollar provisional United Airlines order

United Airlines might be hurting like the rest of the aviation industry in the Covid era, but it’s still looking ahead, and wants in on the electric VTOL game. United has now put in a (highly provisional) US$1 billion dollar order for “up to 200” of Archer’s Maker eVTOL air taxis, with an option for an additional 500 million’s worth down the track. As part of the deal, United will “contribute its expertise in airspace management to assist Archer with the development of battery-powered, short-haul aircraft.”

The news comes as Archer moves to list on the New York Stock Exchange, so it’s part of an investment drive and should be treated as such. And there’s plenty of fine print on it, some of which we reproduce below in case your investin’ finger’s feeling itchy:

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“The United Airlines order constitutes all of the current orders for Archer aircraft. This order and our purchase agreement with United Airlines are subject to conditions, including certification of our aircraft by the Federal Aviation Authority, and further negotiation and reaching mutual agreement on certain material terms, such as aircraft specifications, warranties, usage and transfer of the Aircraft, performance guarantees, delivery periods, most favored nation provisions, the type and extent of assistance to be provided by United Airlines in obtaining certification of the aircraft, territorial restrictions, rights to jointly developed intellectual property, escalation adjustments and other matters. The obligations of United Airlines to consummate the order will arise only after all of such material terms are agreed in the discretion of each party. Further, and in addition to other termination rights set forth in the purchase agreement and the collaboration agreement, if the parties do not agree on such material terms, either party will have the right to terminate the agreements if such party determines in its discretion that it is not likely that such material terms will be agreed in a manner that is consistent with such party’s business and operational interests(as those interests may change from time to time). If this order is cancelled, modified or delayed, or otherwise not consummated, or if we are otherwise unable to convert our strategic relationships or collaborations into sales revenue, Archer’s prospects, results of operations, liquidity and cash flow will be materially adversely affected.”

Whew. Still, it’s a vote of confidence from United, which sees Archer as a way to get into clean air transport in partnership with Mesa Airlines. It’s worth remembering that while billion dollars is quite a lot in most industries, it’s only about three and a half Boeing 787s to a company like United.

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Source: Loz Blain

Photo credit: Archer Aviation


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