Archer Aviation and Southwest Airlines collaborate on eVTOL network in California

Archer Aviation and Southwest Airlines are coming together to determine what it will take to create a network of electric air taxis at California terminals.

Archer Aviation and Southwest Airlines are teaming up to explore building a network of electric air taxis at California airports, leveraging Southwest’s extensive customer data.

The memorandum of understanding signed by the two companies allows Archer to tap into Southwest’s customer base and access data that will inform decisions such as the placement of vertiports or local eVTOL stations.

Strategic Partnership with Southwest Airlines

This collaboration marks Archer’s second partnership with a U.S.-based airline, following a previous deal with United Airlines, indicating the eVTOL company’s strategy to support regional routes.

Southwest operates at 14 airports across California, and Archer’s Midnight aircraft aims to replace 60- to 90-minute urban commutes with 10- to 20-minute air flights. One of the primary use cases for eVTOL networks is to transport passengers to airports efficiently, reducing the time and cost associated with traffic congestion.

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“We’re thinking about things like commercial integration,” said Nikhil Goel, Archer’s chief commercial officer. “When you buy a Southwest ticket, you could add on your Archer before or after your flight when you book that ticket.”

Archer is also considering direct integration at airports where Southwest and United operate, potentially allowing passengers to land behind security and proceed directly to their flights, bypassing TSA screening.

Financial Transactions and Production Plans

The agreement with Southwest comes amid significant financial activities for Archer.

The company recently drew down the remaining $55 million available from a forward purchasing agreement with Stellantis, aimed at building out Archer’s manufacturing facility in Georgia for the production of the Midnight aircraft.

Archer is currently building six conforming aircraft at its small production facility in California, with plans to scale up production at the Georgia facility to about 650 aircraft per year by the fourth quarter of 2024.

Archer also issued warrants to purchase up to 57,050 shares of Class A common stock at $0.01 per share to satisfy payments to a service provider, preserving cash while compensating partners. Goel stated that the motivation is to align Tier One suppliers financially with Archer’s success rather than preserving cash.

Future Plans and Regulatory Hurdles

Archer aims to launch its eVTOL air taxi service in 2025, with initial plans to operate in Miami and San Francisco in partnership with United Airlines and fixed-based operator Atlantic.

The company is also eyeing Los Angeles and New York, with access to over 200 locations nationwide through deals with Atlantic and private terminal operator Signature.

To achieve these goals, Archer needs to complete the rounds of Federal Aviation Administration (FAA) certifications. In June, Archer received its Part 135 Air Carrier & Operator Certificate, allowing it to operate aircraft commercially to refine its systems and procedures.

Archer still needs to secure its Type Certification, ensuring the eVTOL’s design meets regulatory safety standards, and its Production Certification, verifying that Archer’s production processes can reliably produce safe aircraft.

Archer’s collaboration with Southwest Airlines, combined with its strategic financial moves and ambitious production plans, positions the company to make significant strides toward launching its eVTOL air taxi service by 2025.