Flying taxi start-up Vertical Aerospace’s stock is set to soar as high as its eVTOL aircraft when it floats on the New York stock exchange later this year, after Virgin Atlantic, American Airlines [AAL] and helicopter giant Bristow [VTOL] have queued up to place pre-orders.
The Bristol-based company has provisionally sold more than 1,000 – up to £4bn worth – of its VA-X4, a zero-carbon, vertical take-off electrical aircraft that could revolutionise commuter travel by enabling green, fast ride-sharing across cities.
Virgin partnered with Vertical Aerospace in the summer, with an option to buy 150 of its aircraft. American Airlines plans to buy up to 250, and US firm Bristow this week announced plans to buy 25, with an option to up that by 25 more. It also signed a memorandum of understanding with Vertical to jointly work towards regulatory certification, infrastructure and environmental requirements.
“Our MOU with Vertical sets the stage for the disruptive advantages of the VA-X4 with its zero-carbon emissions and low operating costs for passenger transport” - Bristow president & CEO Chris Bradshaw
“Our MOU with Vertical sets the stage for the disruptive advantages of the VA-X4 with its zero-carbon emissions and low operating costs for passenger transport,” said Bristow president and CEO Chris Bradshaw.
Finding new skies
Vertical Aerospace CEO Stephen Fitzpatrick – who launched the business in 2016 and is also the founder of green energy company Ovo Energy – said, “Electrification will transform flying in the 21st century in the same way the jet engine did 70 years ago. By bringing together entrepreneurial organisations that share the same passion for innovation and best in class partnerships, we can revolutionise urban mobility in the UK and electrify air travel.”
Flight operators are not the only interested purchasers. Vertical Aerospace has also partnered with Japanese trading company Marubeni (941JPY), which bought up to 200 craft and will jointly work with the Bristol firm on legislation, infrastructure and network routes in Japan.
The company’s surge in orders follows its recent announcement to go public in a £2.2bn SPAC deal with Broadstone Acquisition Group. As well as American Airlines, Avolon, Honeywell [HON], Rolls-Royce [RR.L] and Microsoft M12 – the venture capital subsidiary of Microsoft [MSFT] – are among the investors climbing aboard to participate via PIPE or private investment in public equity. The deal with Broadstone Acquisition Group is expected to close before the end of the year, with Vertical Aerospace listing in New York with the ticker EVTL.
Future of Flying Taxis
The flying taxis could revolutionise city travel by taking up to four ride-sharing passengers up to 120 miles. Airlines are targeting the craft for shuttle services – Virgin Atlantic CEO Shai Weiss said their partnership with Vertical Aerospace would facilitate “exploration of a joint venture to bring short-haul, electric vehicle connectivity to cities and our UK airport hubs, starting with London Heathrow as well as Manchester and London Gatwick.”
Not only are the VA-X4s fast – Virgin Atlantic has said the 56-mile journey from Cambridge to Heathrow would take 22 minutes instead of the 90-minute drive – but they are also silent. As a result, they may be allowed to fly over residential areas reducing the flying distance further.
Irish aircraft leasing group Avolon, which has already ordered 500 VA-X4s as part of its investment, gave Vertical Aerospace a further boost this week by announcing it would lease at least 250 to Brazilian low-cost airline Gol with a view to launching a fleet of air taxis in Sao Paulo that aim “to be as cheap as Uber”.
“It’s going to be an absolute disrupter. We’re going to democratise air travel,”
Dómhnal Slattery, CEO of Avolon, told the FT. “We think we can get the cost of this down to the equivalent of an Uber ride, equivalent to downtown Manhattan to JFK.”
“We think we can get the cost of this down to the equivalent of an Uber ride, equivalent to downtown Manhattan to JFK” - Dómhnal Slattery, CEO of Avolon
The eVTOL passenger aircraft market is booming – according to Market Research Future (MRFR), it’ll expand at 30.3% CAGR to attain a value of $4bn by 2030, with other applications such as cargo transportation, air ambulance and staff transfer to remote work locations such as oil rigs, likely to further boost this figure.
“eVTOLs have an absolutely hugely addressable potential market and a lot of enthusiasm around the type of technologies they could potentially bring to really re-shaping the future of transportation,” said Asad Hussain, a senior analyst at Pitchbook, as quoted in magazine Avionics International. “A lot of the enthusiasm we saw in terms of SPAC activity and public equity valuations for companies like Tesla and others in the space for on-road electric vehicles is now being transferred to urban air mobility companies.”
“What I think will be the gold rush is in eVTOLs, the aircraft itself upfront. I think private equity is going to increasingly go after the infrastructure, vertiports, and things like that necessary to enable air taxi operations,” he added.
Vertical Aerospace’s own first craft is slated for demonstration at the Paris Olympics in 2024 with a view to launch the first commercial flights later that year, but infrastructure is already being built – the UK’s first air transport hub is underway in Coventry.
The city’s transport innovation manager Sunil Budhdeo clearly sees this as the future of innovative commercial travel. He told firms such as Vertical Aerospace, “We will provide you with a playground if you bring your toys.”
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