Lilium has become the latest eVTOL manufacturer to announce a significant provisional aircraft sale – this time, a 220-unit, billion-dollar deal with Azul in Brazil, which values the electric seven-seat Lilium Jets at around US$4 million apiece.
Azul is the third largest domestic airline in Brazil, but it serves more cities with more flights than any of its rivals, concentrating on new and underserved markets. Brazil is the second-largest helicopter market in the world – partially, perhaps, because of poor infrastructure and terrible traffic, and partially, perhaps, because of the country's shocking rates of violent crime, kidnapping and carjacking.
Electric VTOL air taxis could bring the convenience, speed and relative safety of vertipad commuting to a much broader range of people due to their super-low projected trip prices. "It was very easy for us to quickly identify markets where we could put 250 of these planes, and we think that number could even go to 1,000 or more," says David Neeleman, founder of Azul, Westjet and Jetblue. "By having an aircraft like Lilium has, at a fraction of the cost of a helicopter, with much more safety, we think we can expand this market. We think the market can be 10, or 20, or 30 times bigger than it is today, or even more."
Today's announcement, like previous eVTOL sales announcements from Archer, Embraer Eve, Vertical Aerospace and others, is not a final sale. The terms are yet to be drawn up. As Lilium carefully words it: "the companies plan to negotiate the terms for the establishment of a co-branded network in Brazil. As part of the commercial arrangement, Lilium would intend to sell 220 aircraft for Azul to operate across the network expected to start in 2025 for an aggregate value of up to $1 billion. The strategic alliance and aircraft order with Azul remain subject to the parties finalizing commercial terms and definitive documentation relating thereto."
Indeed, the key audience for this presentation is potential investors, timed as it was to coincide with Lilium's "Capital Markets Day" presentation as it prepares to hit the NASDAQ under a SPAC merger. The company also announced some new board appointments and a battery manufacturing partnership with Germany's CustomCells, which will build cells to Lilium's licensed specs and is preparing to scale up as the eVTOL wave begins to break in late 2024 or so.
The investor presentation also put some interesting numbers on the Lilium aircraft in a commercial sense; each seven-seater will cost around $4 million upfront, plus $1 million a year in "aftermarket support." The jets are projected to last about eight years, but the battery packs will need to be replaced every four months.
Lilium expects each aircraft to make around 25 flights every day, with an average trip distance of 60 miles 96 km). That would put each jet in the air for about 10 hours a day, which seems optimistic given that the batteries will need a lot of charging between flights, but we're sure Lilium's done its sums. Assuming 4.5 out of six passenger seats are full on average, a price of $2.25 per passenger mile would generate some $15,000 per day, or $5 million a year, in revenue, with a 25 percent profit margin and upfront costs recovered in about two years on the way to a projected lifetime profit of $5 million per jet.
Nobody knows if these numbers will stack up in the real world as yet, but we certainly find them fascinating. Check out a video announcement below.
Source: Lilium
