SAN FRANCISCO – Archer Aviation (ACHR) said it’s entering into a major partnership with Southwest Airlines as a way to advance air taxi networks in California. Shares of Archer are up 11%.
Archer is a start-up that is working on an eVTOL aircraft. The company has inked an agreement with Southwest Airlines to explore options for the potential of air taxi services to connect select California airports. Such a partnership would afford the convenience of direct transportation from one’s homes, or from locations near their homes, to Southwest flights without having to use any form of ground transportation to the airport.
A New Frontier in Urban Mobility
On the pact, Paul Cullen, the Vice President of Real Estate for Southwest Airlines, reacted and said, “Southwest is excited to think about how Archer’s air taxis could help our customers travel quickly within busy urban areas when flying on Southwest. We look forward to working with Archer as we explore future commercial possibilities in California and other key Southwest markets.”
eVTOL aircraft, such as those under development at Archer, use vertical takeoff and landing capabilities, akin to helicopters. That capability could enable such aircraft to operate within urban environments without requiring runways, potentially revolutionizing travel over short distances in heavily congested areas.
Investor Confidence and Market Potential
Obviously, the fact that Archer has teamed up with a serious airline like Southwest is in itself strong endorsement of the company’s business plan and technological capabilities. Archer still needs to overcome substantial regulatory hurdles and doesn’t expect to start commercial services before late 2025, but this agreement is a big market opportunity for eVTOL technology.
Other companies, like Joby Aviation, also report rapid progress in the commercialization of eVTOLs-a sure sign of an unstoppable and possibly lucrative market in the near future.
Stock Performance and Investment Considerations
Archer Aviation’s stock, also known by its ticker, NYSE: ACHR, skyrocketed following the announcement due to the investors’ belief in the partnership’s potential. At the time of this update, Archer has a stock price of $5.05 and a market capitalization of $2 billion.
With all the good news, investors must be reminded of the risks and volatility that come with emerging technologies and early-stage companies. While there is an exciting partnership with Southwest in place, one must revisit Archer’s general position in the marketplace for its competitive landscape and long-term viability.
Conclusion
This deal between Archer Aviation and Southwest Airlines accelerates the development of solutions for urban air mobility. As Archer moves along with certification and commercialization, this deal certainly puts a bright light on growing interest and investment in eVTOL technology as a game-changing mode of transportation.