Why a great Wall Street banker is betting on flying taxis to replace helicopters
Source: Archer Air
Wall Street investment banker Ken Moelis said the current bull market in stocks has raised concerns about speculation with too many offers and unproven technology, but without flying taxis.
Flying taxis – formerly known as electric aircraft and urban air mobility market – are coming in the near future and can replace helicopters, Moelis and the company’s CEO and founder, Ken Moelis, told CNBC earlier this week.
“These vehicles will be 100 times quieter, significantly safer, significantly cleaner and significantly cheaper,” Moelis told CNBC’s Squawk Alley on Thursday.
On Wednesday, electric aircraft start-up Archer announced a merger of the Special Purpose Acquisition Company (SPAC) with Moelis-backed Atlas Crest Investment Corp. worth $ 3.8 billion. The start-up plans to launch its first aircraft sometime around 2024. The deal was valued on 2026 numbers.
Archer is in the early stages of development, Moelis said, but its business plan is fully funded and the market opportunity is significant. “There is no speculation,” he said.
While skeptics “act like vertical takeoff and landing,” this is something new and unproven, “formerly known as helicopters,” said Moelis. “We add the word electric … The technology exists. There is nothing to invent.”
A 12-rotor design also makes the flight method safer than helicopters, Moelis said.
Source: Archer Air
The US commercial helicopter market is currently estimated at 10,000 to 15,000 aircraft. Moelis believes the market could double to up to 30,000 due to the electric aircraft replacement cycle and that batteries will continue to evolve and extend range up to 100 miles.
“Only when helicopters are replaced by electronic take-off and landing vehicles will this be a huge market,” said Moelis. “There are 15,000 helicopters now. Can you imagine a world in which you can achieve that?”
Whether Archer’s electric vertical take-off and landing aircraft (eVTOL), which can fly up to 100 km, reach speeds of 250 km / h and cause minimal noise, can hit the market in 2024 depends, among other things, on Federal Aviation certification Administration.
United already orders 200 eVTOL Archer aircraft valued at $ 1 billion. The Chicago-based aviation giant has invested in several strategies to reduce its carbon footprint in recent months, including an investment in a carbon sequestration company for oil and gas company Occidental Petroleum. Urban air mobility vehicles are likely to be used initially to transport passengers to and from airports. Stellantis, the newly combined Fiat Chrysler and PSA Peugeot, is also among a growing list of Archer investors.
Key players in the auto and aviation industries, including Uber, Toyota and Airbus, are following the flying taxi market. Uber sold its flying taxi business late last year to Archer rival Joby, in which it has already invested.
Data from Deloitte suggests that around 200 companies are working on similar aircraft for passengers or cargo. The market is projected to explore $ 4 billion by 2025 and $ 57 billion by 2035. Another study by Frost & Sullivan assumes that air taxis will be flying in the sky as early as 2022 in Dubai.