By Anshuman Tripathy and Abhijith Ganapavaram
(Reuters) – Archer Aviation said on Thursday that a joint venture between Japan Airlines and Sumitomo Corp had secured the right to place orders for up to 100 of its electric air taxis worth $500 million.
If placed, the order for the joint venture, Soracle, would include pre-delivery payments based on Archer reaching certain milestones before delivery of the aircraft, the companies said in a statement.
A handful of airlines have placed orders for air taxis or electric vertical takeoff and landing (eVTOL) aircraft, banking on growing demand for urban travel.
However, the industry faces financial, technological, infrastructure and regulatory hurdles before such planes can carry passengers in cities.
Certification timelines have been pushed back from the first half of this decade to the second half of this decade, as regulations governing air taxis are still taking shape in the West.
German air taxi maker Lilium, which went public in 2021 through a $3.3 billion reverse merger, said earlier this week it would file for insolvency after encountering a liquidity crisis.
“I think it reinforces that what we're doing is very tough,” Archer Chief Executive Adam Goldstein told Reuters in an interview when asked about the impact of Lilium's insolvency on the industry.
Archer, which is backed by automaker Stellantis (NYSE:), is developing its 'Midnight' air taxi that can carry four passengers and a pilot.
Archer has said the plane is optimized for consecutive short-haul trips of around 20 miles, with “minimal charging time” in between.
Soracle said on Thursday it would develop a variety of flight routes including places such as Tokyo, Osaka, Nagoya, Hokkaido, Setouchi and Okinawa. Operations will begin once certifications are received from Japanese authorities.
There is no deadline for Soracle to confirm the order, but the company has made a “seven-figure” pre-delivery payment, Goldstein said.
Archer shares are down 47.7% this year.
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