UK electric flying taxi firm Vertical Aerospace lifts off with $2.2bn Spac listing
12 June, 2021
Electric flying taxis jetted just a little nearer to reality after British entrepreneur Stephen Fitzpatrick unveiled plans to list his start-up Vertical Aerospace in the New York STOCK MARKET with an equity value of $2.2 billion.
Bristol-based Vertical Aerospace, which designs and builds electric aircraft that happen to be “near silent”, can reach speeds greater than 300kph and also have zero emissions, plans to go public on the second half of the year because of special purpose acquisition company (Spac) merger.
Serial entrepreneur Mr Fitzpatrick, who also founded energy company Ovo Group, stated the aircraft would try the skies in 2024, with the listing coming “at most exciting amount of time in aviation for almost a century”.
“Electrification will transform flying in the 21st century just as the jet engine did 70 years back,” he said.
“The UK has already been a global head in aerospace innovation and we believe Vertical Aerospace will be the British engineering champion to drive the aviation industry forward."
Flying taxis referred to as Vertical Take-off and Landing aircraft (eVOTLs) are gaining traction across the globe as a flurry of companies enter the race to create low-emission travel above short distances.
Designed to accommodate just a few travellers, the aircraft are suitable for wealthy commuters in congested cities or people planning for a weekend getaway.
Similar to an electrified helicopter, the planes take off and land vertically but they are actually quiet, agile and emission-free because they make use of small electric rotors.
Mr Fitzpatrick’s VA-X4 aircraft can travel up to 160 kilometres and will manufacture zero emissions “at low priced per passenger mile”, a significant boon for the airline sector, which is under pressure over carbon emissions.
The popularity of Spacs is assisting to propel the budding sector to the world stage, with Vertical Aerospace going public through a reverse merger with Broadstone Acquisition, co-founded by fellow Briton, Pizza Express entrepreneur Hugh Osmond.
The deal will value the combined companies’ equity at about $2.2bn and raise $394 million to employ new staff and build making plants.
“Vertical includes a clear commercial plan to challenge short-haul air travel and create new marketplaces where neither cars nor public transfer can cope with demand,” Mr Osmond said.
He commended the company’s “clear business model to achieve commercialisation and significant growth”, with Vertical Aerospace claiming it can reach profit and cashflow break-even with product sales of less than 100 aircraft.
The Spac raised funds through an exclusive placement from investors including 40 North, an affiliate of Microsoft, American Airlines, Avolon, Rolls-Royce Holdings and Honeywell International.
Mr Fitzpatrick said the offer brought together “some of the largest and most respected technology and aeronautical businesses on the globe” who together may help the VA-X4 become “the first zero-carbon aircraft that most of the people will fly on”.
Vertical Aerospace said it already had about 1,000 orders, worth $4bn, with American Airlines, Virgin Atlantic and Avolon buying the business and booking aircraft.
While American decided to buy 250 aircraft, subject to conditions, aircraft lessor Avolon booked 310 aircraft with a choice to obtain another 190.
Richard Branson's Virgin Atlantic signed an option to place orders of the aircraft with plans to fly passengers into major British airports such as for example Heathrow, Gatwick and Manchester.
The airline said passengers could visit a 90km journey from Cambridge to Heathrow, for instance, reduced to just 22 minutes.
With the aviation sector interacting with level of resistance to longer trips for climate factors and also the ramifications of the pandemic, eVTOLs offer prospect of a fresh business more linked with local movement.
“We believe that this can be the start of the next big evolution of urban air mobility,” explained Domhnal Slattery, leader of Avolon Holdings, which is investing $15m in Vertical Aerospace. “That is likely as significant as the jet age.”
While unmanned test flights of the VA-X4 will commence later this season, piloted versions will need place afterwards with eVTOL makers seeking to transition to pilotless aircraft.
Mr Fitzpatrick’s decision to opt for a US Spac listing instead of floating the company in London is a blow to Chancellor of the Exchequer Rishi Sunak’s ambitions to make the City of London a tech fundraising hub, the entrepreneur said he previously no choice as the UK marketplaces “don’t really support this kind of business at the moment”.
Mr Fitzpatrick said his model would be certified to the same standards seeing that large commercial planes, making it “safer than a helicopter”, with the company likely to certify it to EU Aviation Safety Agency standards, which it considers “the most stringent”.
Patrick Ky, executive director of EASA, last month said he expected industrial usage of eVTOLs to start with carrying cargo before travellers.
Unmanned flight would take in least another five years, Mr Ky explained, as EASA works in a co-ordinated approach with the US Federal Aviation Administration and other international regulators.
Source: www.thenationalnews.com