Delta Airlines will invest $60 million in Joby Aviation, a leading electric air taxi startup, to create a " home-to-airport" service using the startup's five-seat electric vertical takeoff and landing aircraft. If Joby hits certain goals, Delta could invest as much as $200 million.
The service, which will launch first in New York City and Los Angeles with other cities to follow, will be exclusive to the US and UK for five years. The home-to-airport service will be similar to Joby'sexistent airport service.
It would take 10 minutes to travel from Manhattan to JFK.
A trip from Manhattan to JFK Airport, which can take as long as 50 minutes to an hour, will take as little as 10 minutes if you fly in one of the company's five planes. The type of aircraft that Joby is developing is not yet approved for commercial use in the world.
The regulatory process that Joby's unique aircraft still needs to undergo was not disclosed by Delta or Joby. They didn't say how much the service would cost, but Bevirt wanted it to be accessible. Joby's first commercial service is expected to be launched in 2024.
Delta is the latest major airline to bet on unconventional aircraft technology, in the hope that city skies will soon be teeming with small, egg-shaped vehicles with fixed wings and tilt rotors that run on battery power. Delta wasn't seeking to purchase Joby's aircraft or operate the service itself, so its investment was different from other funding announcements.
We are going to be working with Joby.
Joby will be our operator and we are not looking to be an operator. All of our attention is focused on delivering a great customer experience and providing the airport infrastructure.
Electric air taxis aren't a reality yet. They have a lot of technical and regulatory challenges to overcome before they can offer a meaningful service. The construction of a vast network of rooftop or ground-levelvertiports and regulatory approval from a host of federal, state, and local agencies has proven to be costly.
Joby Aviation, which was founded in 2009, has been attacking this problem for quite some time, and it has a lot of financial support. The company went public in February 2021. The company got $1.6 billion as part of the deal, but hasn't been able to win new investments. Joby's stock is selling for $3.80 a share.
Joby would need to hit certain milestones in order to get the full $200 million investment. There have been some notable regulatory progress by the company. Joby needed to operate an on-demand air taxi service after it was awarded a Part 135 Air Carrier Certification by the FAA. Two more certifications are needed before it can legally carry passengers.
Joby's stock is selling for around $3.80 a share.
Delta and Joby may be affected by noise. The startup claims that its aircraft are less noisy than internal-combustion engine vehicles, which allow them to operate in residential communities without causing people to suffer from noise pollution. The company conducted several tests with NASA and found that its aircraft produced a level of noise similar to the hum of a fridge. Most people wouldn't notice it.
Joby will have to contend with volume production. When it went public, the company presented a bullish view of its production plans in its investor deck, but a recent short seller report noted that it filed plans to build a much smaller facility. Joby overstated how many aircraft it would eventually produce, according to the short seller. Joby has yet to pick a location for its Phase One facility, but it is currently in discussions with a number of different possible locations.
There are other funders who put conditions on their investments. In order for United Airline to invest in Eve Air Mobility, certain technical and regulatory requirements would have to be met. Boeing is investing in Wisk Aero.
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