Electric Jet Start-Up Signs $1 Billion Deal with Commercial Airliner

Electric Jet Start-Up Signs $1 Billion Deal with Commercial Airliner
TradeGM Analysis date_range August 4th, 2021

German start-up Lilium specialises in electric jets that take off and land vertically. Lilium has announced that it has plans to sell 220 aircrafts for up to $1 billion to Brazilian airliner Azul. Each jet will cost Azul approximately $4.5 million

The larger plan is for Lilium and Azul to build an eVTOL (electric vehicle take-off and landing) aircraft system across Brazil. The shared goal of the two firms is set to be achieved between now and 2025

“A term sheet has been signed and we will move toward a final agreement in the coming months,” a Lilium spokesperson confirmed

Revolutionising Aviation 

The aviation industry has been under pressure to find alternative ways to power aircrafts. Due to climate change, policymakers have largely acknowledged the need for the world to adapt and become a low-carbon society. The aviation industry has taken a lot of heat around the carbon emissions it produces. 

Lilium’s electric jets are a leap towards reducing the industry’s carbon emissions. The model set to be sold to Azul will carry seven people. 

“The aircraft we’re planning to launch will do 175 miles an hour,” said Alex Asseily, Lilium’s Chief Strategy Officer. “The range will be 155 miles.” 

Asseily also added that the production line is 50% complete. 

Backing Lilium 

Investors are backing Lilium and have supplied $300 million so far. The firm has plans to raise an additional $830 million to give it a post-money valuation of around $3.3 billion. The capital is being raised through a SPAC with Qell Acquisition Corp and is set to be chaired by Thomas Enders, the former Airbus CEO. Aviation executive Henri Courpron and Tesla veteran Gabrielle Toledano will join Lilium’s board of directors once Lilium’s deal with Qell Acquisition Corp is concluded. 

Qell Acquisition Corp’s founder and CEO, Barry Engle recently discussed the benefits of bringing Lilium public. “While people think of it as a flying taxi, it’s actually a business jet that can take off and land vertically. It’s also electric, making it more sustainable and less expensive to operate. We’re talking about developing a whole new market that is huge.” 

He also highlighted the importance of the aircraft being electric. “We see an opportunity to bring forward new technology that is sustainable and doesn’t pollute.” 

Healthy Competition 

Lilium isn’t just competing with firms like Airbus and BlackFly – the rise in electric-powered aircraft is steadily escalating. Flying taxi company Archer went public via SPAC in February, and in December 2020, Blade Urban Air Mobility did the same. 

The idea of flying taxis has been present for a while, and now that technology is making advancements, interest is piqued. This has encouraged more companies to invest in the industry, particularly because these new aircrafts will help decarbonise air travel. 

To Sum Up 

The success of Lilium and Azul’s partnership remains to be seen, along with the outcome of Lilium’s stock market entry via SPAC. But both firms are confident that from here, the only way is up.  

“Our vision is to create a sustainable and accessible mode of high-speed travel and bring this to every community,” said Daniel Wiegand, co-founder and CEO of Lilium. “We are pursuing our unique electric jet technology because it is the key to higher-capacity aircraft, with lower cost per seat mile while delivering low noise and low emissions.” 

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.42% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. X