TOKYO - Archer Aviation Inc. (NYSE: NYSE:ACHR) and Soracle Corporation, a joint venture between Japan Airlines and Sumitomo Corporation, have announced an agreement to introduce advanced air mobility (AAM) services in Japan. The collaboration aims to deploy Archer's electric air taxis, leveraging Japan's reputation for pioneering transportation solutions.
Soracle has secured the right to order up to 100 of Archer's Midnight electric aircraft, with a potential value of around $500 million. These orders are contingent upon reaching certain developmental milestones. The Midnight model is designed for short-haul city flights, boasting reduced noise levels and a flight range suitable for urban transportation.
The partnership's plans include the development of flight routes in key Japanese regions such as Tokyo, Osaka, Nagoya, Hokkaido, Setouchi, and Okinawa. These routes are intended to offer an alternative to traditional ground transport, which is often hampered by traffic congestion and geographic limitations.
Both companies are actively engaging with the Japanese Civil Aviation Bureau (JCAB) to secure the necessary permissions and certifications for operation. Discussions with JCAB have already commenced, with Archer focused on obtaining aircraft certification in Japan.
To commemorate the agreement, a signing ceremony took place in Tokyo on September 26, 2024. Andrew Cummins (NYSE:CMI), Senior Director of Business Development at Archer, expressed pride in joining forces with Soracle to usher in a new era of flight in Japan. Yukihiro Ota, CEO at Soracle, emphasized the joint venture's commitment to enriching lives by offering accessible air transport services.
As part of their efforts to commercialize AAM services, Archer and Soracle plan to conduct a public flight demonstration at the upcoming World Expo. This event is expected to attract millions of visitors and will serve as a platform to showcase the future of aviation and engage stakeholders.
The information provided is based on a press release statement. Archer Aviation is recognized for its contributions to aviation electrification, developing technologies and aircraft to transform urban transportation. Soracle Corporation represents a strategic collaboration aiming to redefine mobility in Japan through sustainable eVTOL services.
For further information on Archer's initiatives and technologies, interested parties can visit the company's website. Details about Soracle Corporation and its vision for air transportation in Japan can be found on its official site.
In other recent news, Archer Aviation has secured a $400 million investment from a Stellantis (NYSE:STLA) subsidiary to scale manufacturing of its Midnight aircraft. The company has also acknowledged the early release of the Federal Aviation Administration's (FAA) final powered-lift Special Federal Aviation Regulation (SFAR), an important step for the commercialization of electric vertical takeoff and landing (eVTOL) aircraft in the United States. Archer Aviation plans to issue shares of its Class A common stock to settle a service payment agreement, with a total value capped at $5 million. The company's CFO, Mark Mesler, has taken temporary medical leave, with Priya Gupta serving as interim CFO. Canaccord Genuity has adjusted its stock price target for Archer Aviation to $7.50, down from $9.00, while retaining a Buy rating, and H.C. Wainwright initiated coverage with a Buy rating and a price target of $12.50. These are some of the recent developments in Archer Aviation's operations.
InvestingPro Insights
As Archer Aviation Inc. (NYSE: ACHR) embarks on this ambitious partnership with Soracle Corporation to revolutionize air mobility in Japan, investors should consider some key financial metrics and insights from InvestingPro.
According to InvestingPro data, Archer's market capitalization stands at $1.14 billion, reflecting the market's valuation of its potential in the emerging electric air taxi market. However, the company's financial position presents a mixed picture. An InvestingPro Tip highlights that Archer holds more cash than debt on its balance sheet, which could provide financial flexibility as it pursues its expansion plans in Japan.
Despite the promising agreement with Soracle, which could lead to orders worth $500 million, Archer faces some financial challenges. Another InvestingPro Tip indicates that the company is quickly burning through cash, a common situation for innovative companies in the development phase. This cash burn rate will be crucial to monitor as Archer works towards meeting the milestones required for the potential aircraft orders.
The electric air taxi market is still in its infancy, and Archer's stock reflects the uncertainties associated with emerging technologies. InvestingPro data shows that the company's stock price has fallen significantly over the last three months, with a 16.41% decline. This volatility aligns with another InvestingPro Tip noting that Archer's stock price movements are quite volatile.
For investors considering Archer's long-term potential, it's worth noting that analysts do not anticipate the company will be profitable this year, according to an InvestingPro Tip. This is not uncommon for companies in the early stages of developing revolutionary technologies, but it underscores the importance of the company's strategic partnerships and market positioning.
InvestingPro offers additional insights, with 10 more tips available for Archer Aviation, providing a more comprehensive analysis for those interested in delving deeper into the company's prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.