Wednesday, February 10, 2021 1:35:05 PM
The purchase would be worth $1 billion, according to Archer, the Palo Alto, Calif.-based company developing the air taxis. The tentative agreement is a stamp of approval for Archer, which said Wednesday that it will go public through a combination with a special-purpose acquisition company in a deal that values the combined company at about $3.8 billion.
United and Mesa Air Group Inc.(MESA), a regional carrier that is joining with United on the purchase, said they envision using the taxis to whisk passengers over congested highways to hub airports. The taxis, which Archer said will be capable of flying 60 miles at 150 miles an hour, could nearly halve carbon dioxide emissions for passengers traveling from Hollywood to Los Angeles International Airport, United said.
Airlines say technology like flying electric taxis can help them reduce emissions, though they say there isn't currently a substitute for the jet-fuel powered engines that power most aircraft. Batteries cannot match the energy density of jet fuel, and airline executives have said that electric or hydrogen-powered aircraft may only be useful for short trips.
"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," United Chief Executive Scott Kirby said in a statement.
Archer aims to begin production in 2023 and launch consumer flights the following year.
United said that it would help speed the aircraft's development through a strategic partnership, but that the taxis must get regulatory approval and meet the airline's operating and business requirements before a purchase is completed. United and Mesa(MESA) have the option to buy another $500 million worth of aircraft under the deal.
During the coronavirus pandemic, carriers have grounded planes and slashed flying. United lost over $7 billion last year and has relied on government aid to avoid laying off thousands of workers.
But airline executives including Mr. Kirby have said they expect the environmental costs of travel to weigh more heavily on eco-conscious consumers after the pandemic. Some Europeans have said in surveys that they had cut back on travel before the pandemic for environmental reasons, and policy makers there have considered taxing jet fuel.
Newer airplanes are more fuel efficient than many older models, but until the pandemic hit, emissions were still rising as more people traveled and airlines added flights. Commercial aviation accounts for about 2% of global carbon emissions and about 12% of all carbon dioxide emissions from transportation, according to the International Council on Clean Transportation, a nonprofit research organization.
Carriers have dabbled in biofuel, but cost and availability remain obstacles to wider adoption. Many carriers have relied largely on purchasing carbon offsets -- essentially paying to plant trees to remove as much carbon dioxide as their flights release -- to reduce emissions.
United has pledged to become carbon neutral by 2050 and last year said it would invest in a carbon-capture project to suck carbon dioxide out of the air and sequester it underground. Mr. Kirby has criticized carbon offset programs and said more drastic action is needed to combat the effects of climate change.
Archer and Atlas Crest Investment Corp.(ACIC), a special-purpose acquisition company backed by investor Ken Moelis, said they expect their deal to go public to provide about $1.1 billion in gross proceeds to the combined company. In addition to their aircraft order, United is investing $20 million in the startup, while Mesa(MESA) is investing $5 million. Other investors include auto maker Stellantis NV, and former Walmart Inc. executive Marc Lore.
Also known as blank-check companies, SPACs raise money before they develop a business. They use the proceeds to make an acquisition, usually within a couple of years, that converts the target into a public company.
Dave Sebastian contributed to this article.
Write to Alison Sider at alison.sider@wsj.com
I have been exposing SCAM stocks for over 15 years now. Battin 1000
Recent ACIC News
- American Coastal Insurance Corporation Reports Financial Results for its Second Quarter Ended June 30, 2024 • GlobeNewswire Inc. • 08/07/2024 08:05:00 PM
- American Coastal Insurance Corporation Schedules Second Quarter 2024 Financial Results and Conference Call • GlobeNewswire Inc. • 07/24/2024 08:05:35 PM
- American Coastal Insurance Corporation Announces a Five-Year Extension of Its Exclusive MGA Agreement With AmRisc and the Election of Two New Directors to Its Insurance Subsidiary • Business Wire • 06/25/2024 08:15:00 PM
- American Coastal Insurance Corporation Announces the Sale of Interboro Insurance Company to Forza Insurance Holdings, LLC • Business Wire • 05/09/2024 08:15:00 PM
- American Coastal Insurance Corporation Reports Financial Results for Its First Quarter Ended March 31, 2024 • Business Wire • 05/09/2024 08:05:00 PM
- American Coastal Insurance Corporation Schedules First Quarter 2024 Financial Results and Conference Call • Business Wire • 04/25/2024 08:05:00 PM
- American Coastal Insurance Corporation Reports Financial Results for Its Fourth Quarter and Year Ended December 31, 2023 • Business Wire • 02/29/2024 09:10:00 PM
- American Coastal Insurance Corporation Schedules Fourth Quarter and Full Year 2023 Financial Results and Conference Call • Business Wire • 02/15/2024 09:15:00 PM
- American Coastal Insurance Corporation Announces Leadership Changes • Business Wire • 01/18/2024 09:15:00 PM
- American Coastal Insurance Corporation Reports Financial Results for Its Third Quarter Ended September 30, 2023 • Business Wire • 11/13/2023 09:05:00 PM
- American Coastal Insurance Corporation Schedules Third Quarter 2023 Financial Results and Conference Call • Business Wire • 10/30/2023 08:15:00 PM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM
Element79 Gold Corp. Appoints Kevin Arias as Advisor to the Board of Directors, Strengthening Strategic Leadership • ELMGF • Sep 18, 2024 10:29 AM
Mawson Finland Limited Further Expands the Known Mineralized Zones at Rajapalot: Palokas step-out drills 7 metres @ 9.1 g/t gold & 706 ppm cobalt • MFL • Sep 17, 2024 9:02 AM
PickleJar Announces Integration With OptCulture to Deliver Holistic Fan Experiences at Venue Point of Sale • PKLE • Sep 17, 2024 8:00 AM