United Airlines invests $15M in flying taxis

United Airlines Invests $15 Million In Flying Taxis
United Airlines Invests $15 Million In Flying Taxis

Key Takeaways:

  • United Airlines announces $15 million investment in Eve Air Mobility.
  • Recent quarterly earnings turned positive after Covid’s economic impact.
  • Uptick in quarterly profits and investing in air taxis should keep earnings reports on the right track.

United Airlines announced they would invest $15 million in Eve Air Mobility and a conditional purchase of 200 electric aircraft. Eve Air Mobility is a subsidiary of the aerospace manufacturer Embraer.

United will purchase 200 four-seat electric aircraft plus the option for 200 more, with expected delivery by 2026. This is a significant investment for United as passenger electric aircraft are new on the market.

Boeing has tested eVTOL (electric vertical take-off and landing vehicle) aircraft, with expectations of a 2023 arrival for the public; presently, it has a range of 50 miles. United’s first appearance on the air taxi scene will offer a 60-mile range.

The airline’s $15 million investment will provide passengers with short flights to and from local airports. This past August, United gave $10 million to Archer, an eVTOL company based in California, to manufacture 100 aircraft.

Of interest at this time, none of the aircraft have yet been approved by the Federal Aviation Administration (FAA).

United Airlines Financials

In its most recent earnings report, United posted a second-quarter profit of $12.112 billion, a 121.29% increase YoY (Year-over-Year). The next earnings report for the airline is expected on October 22 and looks positive again.

United Airlines Holdings (UAL) earnings, revenue date and history. Source: tipranks.com
United Airlines Holdings (UAL) earnings, revenue date, and history. Source: tipranks.com

Trading for United Airlines Holdings, Inc. (UAL) has been a sleeper for the past year.

Airline travel has picked up since major Covid lockdowns, with positive economic signs for United and travelers alike. For the past year, trading has been in a tight range, as seen on the chart below with Bollinger Bands.

United Airlines Holdings price chart. Source: TradingView
United Airlines Holdings price chart. Source: TradingView

The RSI has not shown threatening signs of overbought or oversold conditions. Investors are pleased to see 2022 earnings go positive again and remain optimistic that the stock price will follow.

Before Covid-19 struck, shares of UAL were over $91. Soon after world economies suffered, the stock plummeted to $19.92. Since there has been a gradual increase to today’s current price of $37.48. If UAL reports positive earnings next month, buyers may gain enough confidence to push towards $40.

Air Taxis To Change the Way We Work and Live

Any new business venture carries risk, but United’s investment in electric aircraft is a good strategic move.

Electric cars are selling well globally, so flying vehicles have just as much market appeal. Mike Leskinen, president of United’s venture funding, said eVTOLs would be a perfect solution to deal with traffic-jammed cities where United flies.

Mr. Leskinen said air taxis would be faster than driving to the airport and produce fewer emissions; trips will cost $100 to $150 each way.

United Airlines, United Airlines invests $15M in flying taxis

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