United Airlines on Wednesday said it plans to use eVTOL aircraft to carry up to four passengers to and from its major hub airports. In a joint announcement with its regional partner Mesa Airlines, the carrier said it intends to acquire up to 200 of Archer Aviation's all-electric model, which the California startup expects to gain certification and enter service in 2024.

The deal's value of up to $1.5 billion implies a unit price for the eVTOL of $7.5 million. However, confirmation of the order and deliveries remains contingent on the aircraft achieving FAA type certification and having started commercial service. Founded in 2020, Archer said it intends to operate the aircraft itself, along with unspecified partners.  

Also on Wednesday, Archer Aviation outlined plans for an anticipated $1.1 billion share flotation through a merger with a special purpose acquisition company (SPAC) called Atlas Crest Investment Corp. The $1.1 billion target for the amount of capital raised through the SPAC deal includes $600 million in a common stock PIPE (public investment in private equity) commitment backed by United Airlines, Stellantis, Exor, Baron Capital Group, the Federated Hermes Kaufmann Funds, Mubadala Capital, Putnam Investments, and Access Industries. Atlas Crest chairman Ken Moelis and Archer’s initial financial backer, Marc Lore, have committed to injecting $30 million in the new company.

Based on the published $10 share price, the merged venture would carry a value of $3.8 billion. Archer expects to close the deal during the second quarter of 2021.

Atlas Crest has filed the required 8-K investment form with the Securities and Exchange Commission. The new company will appear on the New York Stock Exchange under the ticker symbol “ACHR.”

A statement from United Airlines said it will acquire the aircraft "once the aircraft are in operation and have met United's operating and business requirements." The major carrier did not confirm whether or not it placed a deposit on the possible aircraft purchases. 

Operational details remain vague for now. The February 10 announcement described the deal as a “collaboration agreement” for “close cooperation between United Airlines and Archer in a commercialization approach that emphasizes existing technology and elegant design to facilitate regulatory approvals and efficient manufacturing culminating in a luxury experience at a scaled, low delivery cost point.”

Archer, which was founded in 2020, said that it intends to operate the aircraft itself, as well as via partners. The company has previously indicated that ride costs will run comparable to the UberX premium car service.

In the announcement, Archer described itself as an airline. However, the startup has not explained how it intends to secure the required Part 135 or Part 121 license to provide either scheduled or charter air services.

According to United, using the Archer eVTOL for a trip between Hollywood and Los Angeles International Airport would cut in half the carbon emissions for each passenger compared with an automobile ride, based on average U.S. vehicle occupancy numbers. 

“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 get them off the ground,” said United CEO Scott Kirby. “Archer’s eVTOL design, manufacturing model, and engineering expertise have the clear potential to change how people commute with major metropolitan cities all over the world.”

Archer said it will unveil a full-scale prototype of its aircraft later this year. The company designed the aircraft, which will have a pilot on board, to fly up to 60 miles at speeds of up to 150 mph.

In January, Archer announced a partnership with Fiat Chrysler Automobiles to provide composite materials and engineering support for its aircraft. Fiat Chrysler is part of the Stellantis automotive group, which formed through a merger with France’s PSA.

Atlas Crest Investment formed through a $500 million initial public offering in October 2020. It is backed by an affiliate of financial advisors Moelis & Company.

Mubadala Capital is part of the United Arab Emirates’ Mubadala sovereign wealth fund. The group’s aerospace division includes aerostructures specialist Strata, which makes components for Airbus, Boeing, and Pilatus Aircraft.

This story is from FutureFlight.aero, a news and information resource developed by AIN to provide objective, independent coverage and analysis of cutting-edge aviation technology, including electric aircraft developments and advanced air mobility.