Trouble is brewing in the global economy – just don’t tell the airlines

The forces of economic gravity aren’t acting on the airlines the way you might imagine.

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Release Date
November 8, 2022
Trouble is brewing in the global economy – just don’t tell the airlines
When the U.S. Air Force launched Agility Prime through its AFWERX innovation arm in 2020, the program had two major objectives. The first was to ensure a dominant lead over China in the race to build electric air taxis. The second was to deliver a capability that the Air Force could actually use.

Two-and-a-half years later, Agility Prime has been credibly successful in accelerating development of electric vertical take-off and landing aircraft. The Air Force’s vote of confidence in the sector was perfectly timed for a wave of interest in technology startups and a craze for special purpose acquisition companies (SPACs) that launched five eVTOL developers onto public markets. Both of those have since subsided, but not before investors encouraged by the Air Force’s interest pushed an estimated $7.5 billion into Agility Prime partner companies. Among them are Joby Aviation and Beta Technologies, both of which have military contracts worth tens of millions of dollars and access to government expertise and test facilities.

Related: USAF pilots make electric flights as Pentagon again cultivates new propulsion

As for maintaining U.S. dominance of the industry, Kirsten Bartok Touw, a co-founder of New Vista Capital and New Vista Acquisition Corp, described the program’s impact this way: “I speak to companies left and right who are non-U.S.-based companies who are thinking about domiciling in the U.S. so they can get access to AFWERX and Agility Prime money. I think that in itself … is huge.”

Now, however, reporting by The Air Current paints a picture of a program at a turning point. Many of the Air Force officials who conceived Agility Prime as a soft power play against Chinese influence are out of the picture, and AFWERX Director Col. Nate Diller will be retiring at the end of year. The new Secretary of the Air Force, Frank Kendall, is known to be skeptical of eVTOLs, and is arguably more interested in fighting China on conventional military battlegrounds than in the field of commercial innovation.

While Agility Prime will continue with the strong support of Congress, its focus will necessarily shift to its second nominal goal: establishing whether these novel electric aircraft, conceived and designed for the civil market, will also play a role in U.S. defense.

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