Archer Aviation (NYSE: ACHR) has built a futuristic airplane that can now be seen buzzing around test sites. Buzzing is an apt description because the small passenger planes take off and land vertically and are meant to operate only over short distances. They are air taxis, and Archer Aviation is hoping they become a very big business.
If the company is right, the stock could help you become a millionaire. However, there are a few more steps to go before air taxis actually take off. Here’s what you need to know if you are looking at Archer Aviation today.
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When digging into the story of Archer Aviation, you have to step back and give the company some respect. What has been achieved so far is impressive. The company has taken an idea and created an actual product in an industry that is highly regulated and capital-intensive. The company’s production facility is set to produce 10 of its Midnight aircraft in 2025.
That said, the company’s Midnight aircraft is only being tested for reliability right now. However, Archer Aviation is tantalizingly close to taking its idea and creating a fully operating company from it. The next steps could be the largest and hardest ones to get done. For example, at the end of 2024, the company noted with regard to the FAA approval process that it has “approval for [about] 13% of the total compliance verification documents in this final phase before type certification.” There’s still a lot of work to be done before Midnight can be used commercially in the U.S. market. It probably won’t get across the finish line in 2025.
Despite that fact, Archer Aviation is preparing now for that day so it can hit the ground running. Notably, it has FAA approval to operate an airline, a plan to set up an air taxi service in California, and FAA approval to operate a flight training program. Basically, all the company needs now is an approved aircraft to use.
The big push for Archer Aviation is going to be building a U.S. air taxi business. But that doesn’t mean this is where the first air taxi service will be set up. In 2025, the most important goal is likely to be the company’s efforts to set up an air taxi service, including carrying its first commercial customers, in Abu Dhabi.
While getting FAA approval in the United States is going to be a huge turning point for the business, Abu Dhabi will be the proving ground for the company’s air taxi model. It is, effectively, trying to create a template that it can use to set up air taxis in other locations. That will be a huge benefit in the United States but also in countries like Ethiopia, where Archer Aviation recently signed up a partner that wants to start an air taxi service.
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