Archer Aviation takes billion-dollar eVTOL order from United Airlines

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:

"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.

A separate partner would operate the fleet of Makers, launching within five years on the current timeline. Perhaps anticipating that infrastructure will be a bottleneck early on, United says the eVTOLs "are expected to give customers a quick, economical and low-carbon way to get to United's hub airports and commute in dense urban environments."

The Archer Maker eVTOL: a first proper look

All high-falutin' movery and shakery aside, this announcement also gives us our first look at quality renders of Archer's aircraft, which until this point has been on the shadowy side, and the company's plans. So let's take a look at the Maker itself.

Consistent with what we've been told previously, this is a transitioning eVTOL with 12 mid-sized rotors arranged across a large wing; a reasonably conventional-looking small plane with extra bits for vertipad operations. The forward bank of propulsion units use five-bladed high-thrust rotors, capable of tilting from vertical to horizontal as the aircraft moves out of a hover and into efficient, wing-lifted forward flight.

The rear bank of rotors is fixed, and each has just two blades, so they can switch off when the plane's on the wing and sit in a reasonably low-drag longitudinal orientation. Ideally you'd want to get these things retracted and right out of the way to get the most out of your battery, but this is a simple and reasonable approach to get started with, and it allows useful speeds up to 150 mph (241 km/h).

The Maker's "Meru" battery system is interesting too; it's separated into six independent units, each powering a pair of forward and rear props such that if one battery fails, the aircraft still has five to rely on to get it down safely. The one flying in the current Maker prototype is a 74 kWh pack offering a maximum power draw of 672 kW, but the one slated for the production aircraft is a 143 kWh monster that Archer claims will give the Maker a 60-mile (96 km) range, with proper reserves, capacity fade and inaccessible power taken into account, using currently-available battery technology.

What's the point of eVTOLs?

At its 2,000-foot cruise height, the Maker will create about 45 decibels of noise pollution on the ground, somewhere between "quiet library" and "moderate rainfall" on this noise chart, a figure Archer says is "100x quieter than a helicopter," which, due to the logarithmic nature of the decibel scale, must be around 65 dB. There's no mention of takeoff noise, but it's reasonable to assume the Maker and other eVTOLs like it will be much less intrusive than helicopters in every phase of flight.

A reduced noise profile is one key reason big money is betting that eVTOLs will be a transformative addition to the urban and inter-city transport mix, but the main one is cost. The simple nature of electric propulsion, argue air taxi proponents, will make them significantly cheaper to build, and exponentially cheaper to operate. Archer presents some remarkably rosy figures in its investor presentation for an 18.2-mile peak hour trip from Manhattan to JFK airport as an example.

Can these things really be 1/35th the price of a helicopter ride, and cheaper than an Uber? Who knows? The company doesn't say whether this figure is the expected price on debut, or whether it'll need serious volume production and pilot-free autonomy to get close to that figure. But certainly, every projection is showing much lower costs than a helicopter flight, suggesting an eventual democratization of VTOL transport rather than a bunch of new toys for the top end of town.

Archer's timelines

Archer says it's been working with the FAA on certification since its inception, and expects the Maker to receive a Type Certificate enabling commercial operations by 2024. On the manufacturing side, its partnership with Fiat Chrysler, which has since merged with the Peugeot group to form Stellantis, gives it access to automotive industry expertise and mass-market manufacturing knowledge and assistance. It projects to be building 1,000 Makers a year by 2026, ramping up to 5,000 a year at some stage beyond 2026.

While its focus is on building airframes to sell to air taxi operations, the company sees unexplored avenues to further sales in cargo operations and military contracts. Prototype test flights are already underway, with piloted commercial operations slated for 2024-2026. Supervised autonomy, Archer hopes, will be possible by 2027, and full pilotless operations by 2028, with remote supervisors available to take over the sticks if there's a problem with the computers.

This does raise the question of where Archer and the service operators think they'll find the thousands of pilots willing to train up and fly these things in the early days of the air taxi game. Pilot's licenses are not cheap, they take time to study for, and all for a job that most eVTOL companies are promising will be extinct before the end of the decade.

Either way, Archer is establishing itself with at least the appearance of being a serious contender in this emerging market, with a real-deal team on board, plenty of support from the financial, automotive and aviation industries appearing to back it up and a provisional order on the books that'll give the company a nice kick along if it all comes through.

Joby Aviation still clearly holds the best cards in the market; it's been running a lot longer, its aircraft is faster and flies further, it's already taken more than 1,000 test flights at full scale, it's got airworthiness approval from the US military and a path to certification from the FAA, and Joby has arranged the best part of a billion dollars' worth of investment without going public. But Archer's brute-force push into this space gives it the advantage of hindsight and experience from day one, and it's certainly attacking aggressively. We look forward to following its progress.

To hear more of Archer's investor spin, today's investor presentation is well worth a read. For more about the United deal, compare and contrast the two press releases below.

Source: Archer Aviation, United Airlines