United Airlines (NASDAQ: UAL) has paid Archer Aviation (NYSE: ACHR) $10 million dollars as part of a 2021 deal to purchase 100 electric vertical takeoff and landing (eVTOL) aircraft, the air taxi developer said Wednesday.
“The payment represents a watershed moment for the eVTOL industry, validating confidence in the commercialization of eVTOL aircraft and Archer’s leadership,” Archer said in a statement.
The payment serves as a defense against skeptics of the emerging eVTOL sector who had said the provisional $1 billion agreement between United and Archer announced in 2021 represented an easy and inexpensive ESG (environmental, social, and governance) victory. The exchange of cash puts more skin in the game for United.
“To receive a cash deposit is validation of Archer’s achievements to date, not only with flight testing and product development, but also a great signal of confidence in our roadmap to commercialization,” said Archer CEO Adam Goldstein in a statement. “We’re thankful to United for their continued partnership as we usher in this new era in air travel.”
Archer is one of a handful of startups flight testing eVTOLs in hopes of offering passengers quick, convenient, and emission-free hops over gridlocked traffic as soon as 2024. The entirely new form of air transportation, supporters say, has the potential to create thousands, if not hundreds, of new jobs for pilots, at a time when airlines are already suffering from lack of flight crew availability.
“United Airlines Ventures has invested in a diverse roster of companies working in support of our goal to reach carbon neutrality by 2050, without the use of traditional carbon offsets,” said Michael Leskinen, president of United Airlines Ventures. “We believe eVTOLs have the potential to both help achieve carbon-neutral travel and serve as an innovative new tool to change how United customers experience comfort, convenience, and efficiency during their commutes within cities across the globe.”
United isn’t the only traditional airline to invest in eVTOL. Since 2017, JetBlue Technology Ventures, a subsidiary of JetBlue (NASDAQ: JBLU), has been a major investor in California-based Joby Aviation (NYSE: JOBY), which is developing an air taxi eVTOL expected to enter service in 2024.
Other traditional carriers, including American Airlines (NASDAQ: AAL), Gol, Azul, and UPS (NYSE: UPS) have announced deals with eVTOL developers that have not yet achieved type certification for their aircraft.