Merging company

Delta, partner of Joby Aviation, launches the eVTOL home-airport shuttle

Delta Air Lines (NYSE: DAL) is making a big bet on eVTOL startup Joby (NYSE: JOBY). The Atlanta-based airline announced this morning that it has made an initial investment of $60 million in Joby, or approximately 2% of the company, to help establish a “multi-year, multi-market commercial and operational partnership” between of them.

Joby says the plane has completed more than 1,000 test flights. [Courtesy: Joby Aviation]

If things go well as the service rolls out, Delta said the total investment could reach $200 million.

“We have found in Joby a partner who shares our pioneering spirit and our commitment to delivering innovative and seamless experiences that are better for our customers, their journeys and our world,” Delta CEO Ed Bastian said in a statement. .

From New York and Los Angeles, Delta and Joby plan to integrate Joby’s services as a premium shuttle service to and from the airports where Delta operates. This will run alongside Joby’s planned airport services, making the partnership mutually exclusive in the US and UK for half a decade after Joby’s commercial launch.

Joby’s pre-production prototype is powered by six tiltrotors and battery-powered electric motors. It is designed to carry a pilot and four passengers at speeds of up to 200 mph (174 kts), with a maximum range of 150 sm on a single charge.

Joby claims the aircraft has flown more than 1,000 test flights and is the first eVTOL company to be granted a G-1 (Stage 4) certification basis for its aircraft by the FAA. More recently, Joby has already received its Part 135 certification from the FAA, based on traditional aircraft flown in the short term.

Joby Founder and CEO JoeBen Bevirt said Joby shares “Delta’s unwavering commitment to delivering smooth and sustainable customer journeys” and looks forward to working together.

Analysts reject Joby’s plan

The partnership with Delta is a significant win for Joby, which became a publicly traded company in 2021 by merging with a special purpose acquisition company, or SPAC, like some of its competitors, Lilium (NASDAQ: LILM), Archer (NYSE: ACHR), Vertical Aerospace (NYSE: EVTL) and Eve (NYSE: EVEX). Since then, as a general trend, many publicly traded companies using the SPAC format have underperformed for a variety of reasons.

In Joby’s case, a scathing report from leading hedge fund Bleecker Street Capital claimed that eVTOL’s plan to achieve FAA certification by 2024 and begin commercial services immediately is “so grand that it is difficult to understand”.

The partnership will provide premium and differentiated service to Delta customers in addition to Joby’s standard airport service. [Courtesy: Joby Aviation]

“Without revenues, a prototype aircraft and promises for the future, Joby has some of the most egregious guidance of any SPAC we’ve seen,” pushed back the hedge fund, which also said Joby used those projections to guarantee partnerships with companies like Toyota and Uber.

With the arrival of Delta, Joby may have been able to change the narrative. In late September, the FAA also released new design guidelines for vertiports, the infrastructure that will support Advanced Air Mobility (AAM) aircraft.

“Our country is entering a new era of aviation,” said Shannetta Griffin, associate administrator of airports. “These vertiport design standards provide the foundation needed to begin building infrastructure safely in this new era.”

These vertical take-off and landing (VTOL) operations will carry passengers or cargo at lower altitudes in rural, urban and suburban areas. [Courtesy: FAA]

Separately, during the same week, a group of aviation business leaders testified before a United States Senate subcommittee on aviation safety, operations, and innovation, during which the group provided legislators critical updates on the progress of introducing new technologies into the national airspace system. .

NBAA President and CEO Ed Bolen presented the business aviation case for advanced air mobility. [Courtesy: NBAA]

At the time, NBAA President and CEO Ed Bolen presented the business aviation case for advanced air mobility. Bolen urged the FAA to do everything in its power not to hamper the certification process, but to ensure that eVTOL manufacturers can meet their 2024 deadlines.

Regarding Delta, Bastian said, “This is a game-changing opportunity for Delta to provide a unique, premium home-to-airport solution for customers in key markets where we have been investing and innovating for many years. “.