According to a Tuesday announcement by the two firms, delta Airlines will invest $60 million in Joby Aviation, a leading electric air taxi startup, to develop a “home-to-airport” service utilizing the startup’s five-seat eVTOL aircraft. If Joby achieves certain milestones, Delta stated its investment in the company may reach $200 million. Drones services star an air taxi service from homes to airports.
According to the corporations, the service will initially begin in New York City and Los Angeles before expanding to other places. It will be “mutually exclusive” in the US and the UK for five years, with the opportunity to extend that exclusivity for longer. In addition to Joby’s already nonexistent airport service, which transports people from cities to airports, the home-to-airport service will run concurrently.
A 50 minute trip from Manhattan to JFK could take just 10 minutes
In a briefing with reporters, Joby CEO JoeBen Bevirt said that a trip from Manhattan to JFK Airport, which can take as long as 50 minutes to an hour when traveling by car or subway, would take as little as 10 minutes when flying in one of the company’s five-passenger aircraft — “along with a really spectacular view,” he added. It’s a nice thought, but the truth of the matter is that the type of aircraft that Joby is developing — electric, low noise profile, cross between helicopter and drone — is not yet approved for any commercial service anywhere in the world.
Because Joby’s special aircraft still needs to go through a protracted regulatory process, neither Joby nor Delta would say when they planned to start the service. Additionally, they withheld information regarding the service’s cost, despite Bevirt’s declaration that he sought “accessible” fares. According to Joby, the company plans to introduce its first for-profit service in 2024.
With the anticipation that soon city skies would be swarming with small, egg-shaped vehicles with fixed wings and tilt rotors that rely on battery power, Delta is the latest big airline to wager on unusual aircraft technology. In contrast to prior financial announcements of a similar nature, according to Delta CEO Ed Bastian, the airline did not intend to buy Joby’s planes or run the service directly.
We’re not looking to be an operator; we’re going to be working with Joby”
“We’re not looking to be an operator; we’re going to be working with Joby, who’s going to be our operator,” Bastian said during a briefing with reporters. “And so all of our attention and focus is really on delivering a great customer experience and providing the airport infrastructure.”
As previously noted, electric air taxis aren’t a real thing yet. They face a host of technical and regulatory challenges before they can scale up into a meaningful service. So far, those projects have proven costly to implement, requiring the construction of a vast network of rooftop or ground-level “vertiports” and regulatory approval from a host of federal, state, and local agencies.
The 2009-founded company Joby Aviation has been tackling this issue for a while and has a lot of financial backing, including investments from Toyota and Uber. After combining with a “blank check” special acquisition company, or SPAC, the business went public in February 2021. The purchase netted the corporation $1.6 billion, but up until this point, it has been difficult to attract fresh investors. Currently, shares of Joby cost about $3.80 each.
When asked what benchmarks Joby would need to reach to release the full $200 million investment, Bastian was evasive. In recent months, the corporation has made some significant regulatory advances. prior to this year.
For Joby, volume production will present another difficulty. When the firm went public, it gave investors a positive impression of its production ambitions in its investor deck; however, a recent short seller report revealed that the company submitted plans to authorities for the construction of a significantly smaller plant. The short seller claimed that Joby overstates the number of aircraft it intends to ultimately construct. Bevirt pointed out that while Joby is currently in discussions with a number of potential sites, it has not yet decided on a location for its Phase One plant.
Not just Delta but other funders also impose restrictions on their investments. Eve Air Mobility received a $15 million investment from United Airlines earlier this year, subject to Eve Air Mobility meeting certain technical and legal requirements.