When you are a start-up aerospace company that can announce pre-orders for some 1.000 of your yet-to-fly airplane and at the same time attract new investors, you can’t consider yourself to have had a bad day. Exactly this has happened to UK-company Vertical Aerospace, which on June 10 announced commitments from American Airlines, Avolon, and Virgin Atlantic for its VA-X4 electric Vertical Take-Off and Landing (eVTOL) vehicle. Vertical Aerospace has gone into a higher gear. And it isn’t the only UAM-maker.
Bristol-based Vertical Aerospace was launched in 2016 by Stephen Fitzpatrick. It aims to develop an electric (hence: carbon-free) VTOL passenger Urban Air Mobility vehicle to revolutionize air travel. In 2017, it flew its first prototype VA-X1 and in 2019 the larger VA-X2, but these were only steps towards the first ‘real’ aircraft, the VA-X4, which was launched in 2020. It a 4-seater that can fly at speeds up to 200 miles an hour at a range of 100 miles. Vertical targets the first flight of the model this year, leading to a 2024 entry into commercial service.
Vertical partners with Broadstone and will go public
While Vertical is one of many companies that try to establish itself on the UAM scene, its project has won a lot more credibility after Thursday’s announcements. Vertical has got the backing of Broadstone Acquisition Corporation, a UK-based ‘special purpose acquisition company’ set up by serial entrepreneurs, operators, and investors that have invested in companies like Pizza Express, Punch Group, Phoenix Group, and Keepmoat Homes. Broadstone is led by Hugh Osmond, Edward Hawkes, and Marc Jonas, none of them with a background in the airline or aviation industry.
Airplanes are a different matter, but Broadstone and Vertical will form a business combination that will make Vertical Aerospace a publicly-traded company on the New York stock exchange in the second half of this year. It estimates a public offering will raise some $394 million in fresh equity. The company is currently valued at a pro forma equity value of $2.2 billion.
Vertical already had the financial backing of Microsoft’s M12, Rolls-Royce, and Honeywell. On Thursday, American Airlines said it will become an investor with a $25 million investment through a private investment through public equity (PIPE) agreement. Lessor Avolon will do the same for an undisclosed sum. New investors also include Berlin-based Rocket Internet SE and New York-based venture capital specialist 40 North. The Vertical business case says that the company will be profitable and cash flow breakeven even with less than 100 annual sales. It estimates there is a market for UAMs of $1.0-4.0 trillion up to 2040.
American, Avolon, and Virgin sign pre-orders and options
The financial commitment of American Airlines and Avolon has been backed up by the signing of pre-orders. Subject to “certain future agreed-upon milestones and other terms”, American wants to purchase 250 VA-X4s plus 100 options, representing a value of $1 billion.
Avolon has signed a pre-order for 310 eVTOL-aircraft and 190 options, worth $2 billion, but also subject to certain conditions. And there is Virgin Atlantic, which on Thursday announced an option of 50 to 150 aircraft. Although Vertical and Virgin are exploring a joint-venture, Virgin will not participate in the equity of the company.
American, Avolon, and Virgin Atlantic have all one thing in common: they have a strong belief that emerging technologies like that from Vertical are critical to reducing carbon emissions. “For years, American has led the industry in investing in newer, more fuel-efficient aircraft. Today’s partnership is another example of that commitment and investment in the future of air mobility. We are excited about the prospect of what this could mean for our customers, and our company”, said CFO Derek Kerr.
UAMs new territory for lessor Avolon
Avolon, which had 578 owned and managed aircraft by the end of the first quarter, is committing to an entirely new sort of air vehicle. The lessor is the launch customer of the VA-X4 and sees its investment in Vertical as a strategic and long-term one. “Our order with Vertical will also accelerate the inevitable commercial roll-out of zero-emissions aircraft. Before the end of this decade, we expect zero-emission urban air mobility, enabled by eVTOLs, to play an increasingly important role in the global commercial aviation market”, said CEO Domhnal Slattery. “We believe the global reach of the Avolon platform will accelerate the inevitable adoption of eVTOLs as a new, safe, and zero-emissions mode of ultra-short-haul air transport.”
Before the VA-X4s can play their role in passenger transport, the UAM concept has first to meet all regulatory requirements. Vertical says its aircraft will be certified to the same standards as an airliner and therefore should be a hundred times safer than a helicopter. It plans to have EASA certification first. The start-up relies on experience from its technical partners Rolls-Royce, GKN Aerospace, and Solvay and has hired technical staff with many years of experience in the aerospace and automotive industry.
But how will operators use their eVTOL aircraft? Virgin says it wants to position them on routes between cities and airport hubs, starting at London Heathrow, London Gatwick, and Manchester. It says a trip by the VA-4X would reduce the journey between Cambridge and Heathrow to 22 minutes compared to one hour and thirty minutes by car. Likewise, American has plenty of options to use its aircraft between airports and cities, although the introduction of UAMs will require a whole new set of safety and air traffic management regulations.
Archer rolls out Maker demonstrator
It’s not just Vertical Aerospace that has gone into a higher gear. Palo Alto (California)-based Archer Aviation unveiled its two-seat demonstrator aircraft, the Maker. It can fly 150 miles an hour over a sixty miles range and features twelve tilting rotors on a fixed-wing. It is developed together with FlightHouse Engineering. Production is to start in 2023 and enter into service a year later.
Last February, Archer announced a business combination agreement with Atlas Crest Investment Corporation and will also get a listing on the New York Stock Exchange. Previously, the start-up secured financial backing from United Airlines, Stellantis, UAE-based Mubadala Capital, Baron Capital Group, Federated Herman Kaufmann Funds, Access Industries, plus some private investors. Archer’s equity value is estimated at $3.8 billion. Archer was founded by Brett Adcock and Adam Goldstein.
Archer unveiled its Maker demonstrator on June 10. (Archer Aerospace)
United said in February that, together with regional partner Mesa Airlines, it would purchase 200 eVTOL-aircraft, although this is subject to confirmation. Its choice for Archer confirms United’s intentions to decarbonize air travel. As CEO Scott Kirby said: “With the right technology, we can curb the impact aircraft have on the planet, but we have to identify the next generation of companies who will make this a reality early and find ways to help them get off the ground.”
Interestingly, United announced a week ago that it had placed orders and options for fifty Boom Overture supersonic aircraft, on which the hurry is still out how eco-friendly they are. United also plans to operate the Maker in urban regions, with Los Angeles one of the initial cities where to launch operations.
Archer made unwanted headlines as it is battling with Wisk Aero, another eVTOL start-up that claims Archer has stolen technical details of its twelve-rotor concept. It claims Wisk’s case is “entirely baseless” and that “there also is nothing secret about using 12 rotors on a fixed-wing.” Archer filed a counterclaim against Boeing-backed Wisk as its holds it “accountable for its abuse of the legal system and its anticompetitive and tortious conduct.”