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, especially for Advanced Air Mobility (AAM) companies, with 175 mergers raising over $63 billion.
AAM companies utilized SPACs to quickly access over $2.5 billion in capital to fund the development and certification of their air taxi vehicles.
Despite significant capital, the path to vehicle certification remains slow, and the SPAC model faced challenges such as shareholder redemptions and public scrutiny, leading some companies to cancel plans.
More SPAC-IPOs are anticipated in 2022, with mature companies and established airlines continuing to show confidence through substantial PIPE investments in the sector.

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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.