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This post appeared as part of our Three Points Newsletter on August 12, 2022

Along with the release of its Q2 financial results this week, eVTOL developer Archer Aviation announced receipt of a $10 million pre-delivery payment from United Airlines for 100 of Archer’s initial production aircraft (which we learned is now called… “Midnight”). United was first revealed as an Archer customer back in February 2021, when the airline conditionally agreed to order up to 200 of Archer’s aircraft, in a deal with a potential value of $1.5 billion including options.

In a Wednesday earnings call, Archer Chief Financial Officer Mark Mesler described the deposit as a “standard commercial arrangement” with future payment milestones in line with “traditional aerospace payment terms”. The money will hang on Archer’s balance sheet as a cash deposit, he said, eventually turning to revenue with Midnight deliveries, which are expected to start in 2025.

In an industry awash in conditional orders, the pre-delivery payment is meant to “validate confidence in the commercialization of eVTOL aircraft and Archer’s leadership”, according to a press release that described it as “a watershed moment for the eVTOL industry”. Yet, while the payment may well be a significant vote of confidence in Archer, it is simply not equivalent to a traditional aircraft deposit, because United is not a traditional customer.

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As Senior Editor, Elan spearheads The Air Current’s coverage of electric vertical takeoff and landing (eVTOL) aircraft, along with a focus on emerging sustainable technologies. A commercially-rated helicopter pilot and FAA Gold Seal flight instructor, Head brings a unique vantage point to explore this critical new sector.

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