Archer Aviation (NYSE:ACHR) stock is up over 10% today after inking a promising new deal with Southwest Airlines (NYSE:LUV). The two have signed a memorandum of understanding (MOU) to develop operational plans for electric air taxi networks using Archer’s eVTOL aircraft at airports in California where Southwest functions.
Southwest is California’s largest airline, operating at 14 airports in the state. As such, the deal opens up real possibilities for Archer.
The Archer Midnight aircraft would be used to replace the sometimes 90-minute commutes within the state, replaced by 10 to 20-minute air taxi flights.
The two will collaborate on a concept of operations that efficiently integrates the air taxi network with the existing California airport system and the local communities that Southwest is ingrained in.
“With Archer’s Midnight aircraft, passengers will be able to fly above traffic to get to the airport faster,” said Nikhil Goel, Chief Commercial Officer at Archer. “By putting together Southwest’s impressive network of airports in California and their frequent intrastate flights with our planned network, Southwest customers could someday complete door-to-door trips like Santa Monica to Napa in less than three hours.”
Interestingly, the governor’s office has also expressed enthusiasm at the potential of the deal.
“Archer’s collaboration with Southwest to introduce air taxis in California showcases our state’s dedication to climate innovation and advanced technology,” said Dee Dee Myers, senior advisor to Governor Gavin Newsom and director of the Governor’s Office of Business and Economic Development.
ACHR Stock Tries to Reverse Fortune in Mixed Year
Despite the jump in ACHR stock today, Archer Aviation has experienced a relatively cold year thus far. Indeed, ACHR is down about 13% this year, even as the S&P 500 is up 19% over the same period.
While the stock hasn’t performed well this year, many investors rank it highly as an investment because of its future earnings potential. Three analysts on TipRanks rate the stock a “buy,” while one analyst recommends to “hold,” with an average price target of $7.63, above its current roughly $5 price tag.
Southwest stock is also up on the news, albeit less than its eVTOL counterpart. LUV stock is up 2.15% at the time of writing, down about 2.6% on the year.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
