Southwest Air, Archer Aviation work on plans to fly air taxis in California

By David Shepardson

(Reuters) -Southwest Airlines and Archer Aviation said on Friday they have agreed to develop operational plans for electric air taxi networks built by Archer at California airports where Texas-based Southwest operates.

The companies said they have signed a memorandum of understanding to collaborate on a concept of operations that lays the foundation for integrated electric air taxi networks connecting California airports and surrounding communities.

Southwest shares rose 2% while Archer was up 10.5%.

Electric vertical takeoff and landing aircraft (eVTOL) have been touted as the future of urban air mobility. Archer is developing its Midnight eVTOL aircraft.

Airlines are looking at developing transport services using battery-powered aircraft that can take off and land vertically to ferry travelers to airports or on short trips between cities, allowing them to beat traffic.

"Southwest is eager to explore the convenience Archer’s air taxis could provide customers flying Southwest at airports in busy urban areas,” said Paul Cullen, vice president real estate at Southwest, which operates at 14 California airports.

In May, the U.S. Congress approved legislation aimed at helping speed approval and deployment of eVTOL aircraft.

Archer thinks the partnership could help shave significant time off trips in California, replacing 60-to-90-minute automobile commutes with estimated 10-to-20-minute air taxi flights through a "safe, low-noise, cost-competitive transportation option with no direct emissions."

Archer Chief Commercial Officer Nikhil Goel said the partnership hopes to offer door-to-door trips anywhere in California in three hours or less, like Santa Monica to Napa using air taxis on both ends.

Goel said "really meaningful time savings" were possible, with passengers avoiding rush-hour traffic to airports. Archer hopes customers will eventually be able to book an Archer air taxi ticket at the time they buy a Southwest plane ticket.

United Airlines is also an investor in Archer Aviation.

In 2022, Delta Air Lines said it had invested $60 million in air taxi startup Joby Aviation for a 2% equity stake, aiming to initially offer passengers air taxi transport to and from airports in New York and Los Angeles.

The companies plan to integrate a Joby-operated service into Delta's customer-facing channels to provide short-range airport transport.

(Reporting by David ShepardsonEditing by Mark Potter)