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American Airlines is making an investment in the future of aviation with a $1 billion pre-order for a new type of aircraft to fly over congested cities.
The Fort Worth, Texas-based airline is investing $25 million in Vertical Aerospace, a UK-based firm developing electric vertical takeoff and land aircraft, or eVTOLs, in a deal for up to 250 aircraft. EVTOLs are helicopter-like electric aircraft that aim to offer intra-city urban air mobility services and offer an alternative to driving.
Vertical Aerospace’s flagship VA-X4 aims to fly up to four passengers to distances exceeding 100 miles while achieving speeds of up to 200 miles per hour. For American, the aircraft will likely be offering airport transportation and flying to and from its largest hubs.
American’s $1 billion pre-order for up to 250 aircraft and options for 100 more will only see the airline invest $25 million in the company at present. “It’s a relatively low risk, high reward investment and strategy by American,” Henry Harteveldt, travel industry analyst and cofounder of Atmosphere Research Group, told Insider.
“The airline is not betting its financial future in these aircraft with this investment right now,” Harteveldt said, noting that the airline likely has strict requirements that Vertical Aerospace must meet before more cash is handed over for an aircraft.
Sustainability is also a key focus in American’s order as the VA-X4 is slated to be a carbon-zero aircraft powered by batteries instead of jet fuel.
“Emerging technologies are critical in the race to reduce carbon emissions and we are excited to partner with Vertical to develop the next generation of electric aircraft,” Derek Kerr, American’s chief financial officer, said in a statement.
American’s investment follows United Airlines’ partnership with Archer Aviation, another eVTOL startup that just unveiled its flagship aircraft, Maker, on Wednesday. United and regional airline partner …read more
Source:: Business Insider