The Aviation Business Trend of 2021? SPAC Mania

Blank-check companies spent billions trying to get a jump on this potentially lucrative market.

Tuesday, December 28, 2021 at 09:16 AM ET

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Joby’s design features six electric-powered tilt rotors that allow the eVTOL to hover like a helicopter and fly like an airplane. [Courtesy: Joby]

Key Takeaways:

SPAC-IPOs were a dominant financial instrument in 2021, facilitating over $63 billion in mergers, particularly for Advanced Air Mobility (AAM) companies seeking rapid access to capital.
AAM companies raised over $2.5 billion through SPAC mergers, primarily to fund the crucial and slow process of vehicle certification for their electric air taxis.
Despite the capital raised, AAM companies are operating without revenue and face challenges like public scrutiny and shareholder redemptions, with some SPAC plans being canceled.
The trend of SPAC-IPOs is expected to continue into 2022, as many blank-check companies still need to find target acquisitions within their two-year deadline.

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One of the most dominant financial instruments during 2021 was the SPAC-IPO. Pitchbook reports that in 2021, 175 special purpose acquisition company (SPAC) mergers were completed, to the tune of more than $63 billion.

In the aviation and aerospace world, a bevy of advanced air mobility (AAM) companies leaned into the opportunity to get access to capital by merging with already public, blank-check companies. The practice presented a faster way to that capital than a traditional IPO, especially as companies eyed a frenzied public market driven by retail investors in search of the Tesla of the sky.