United Airlines said Wednesday it will buy up to 200 small electric air taxis to help customers in urban areas get to the airport.
The airline said it will help electric-aircraft startup Archer develop an aircraft capable of helicopter-style, vertical takeoffs and landings. Archer hopes to deliver its first aircraft in 2024, if it wins certification from the Federal Aviation Administration.
United said once the aircraft are flying, it and partner Mesa Airlines will acquire up to 200 that would be operated by another company.
According to an Archer presentation to investors, the orders are worth $1 billion with an option for $500 million more.
Privately held Archer, which is based in Palo Alto, California, announced separately that it has agreed to merge with Atlas Crest Investment Corp. and form a new publicly traded company. Archer and Atlas put a $3.8 billion value on the deal, which sent Atlas shares up 22%.
Archer’s aircraft are designed to fly under battery power for up to 60 miles at speeds of up to 150 mph.
The company plans to launch service in congested areas close to airports. United estimated the air taxis could shuttle people from Hollywood to Los Angeles International Airport at about half the carbon emissions per passenger.
Cowen analyst Helane Becker said United could use Archer’s aircraft could operate between New York City and United’s hub operation at Newark Liberty Airport in New Jersey, or from downtown Chicago to O’Hare Airport, allowing airline customers to avoid traffic.
Chicago-based United portrayed the move as part of a broader plan to invest in technology behind cleaner modes of air travel. CEO Scott Kirby said Archer’s design “has the clear potential to change how people commute within major metropolitan cities all over the world.”
Aviation is a small contributor to greenhouse gases that cause climate change, but its share of the problem is growing rapidly. Many airlines including United have made investments in biofuel, but limited supplies are likely to hinder wider use of such alternatives to jet fuel for many years.
In December, United pledged to offset all its carbon emissions by 2050 in part by investing in technology to remove carbon from the air and bury it.