News

Archer Aviation (NYSE: ACHR) has a deal with Southwest Airlines (NYSE: LUV) to develop air taxi networks in California.

It is a big sign of confidence in the "flying car" start-up and investors are excited about the development, sending Archer shares up 11% as of 11:30 a.m. ET.

Take an air taxi to the airport!

Archer is one of several companies working to develop electric vertical takeoff and landing (eVTOL) aircraft for commercial use. eVTOLs take off and land like helicopters, meaning they can operate out of areas without a runway, and can ferry a handful of passengers on short trips.

On Friday, Archer and Southwest said they intend to collaborate to develop an air taxi network connecting select California airports. In theory, Southwest customers could leave their cars at home and receive transport from their homes or a nearby location directly to a Southwest flight at a nearby airport.

"Southwest is eager to explore the convenience Archer's air taxis could provide Customers flying Southwest at airports in busy urban areas," Paul Cullen, vice president of real estate at Southwest Airlines, said in a statement. "We look forward to collaborating with Archer as we assess future commercial activities in California and other Southwest locations."

Is Archer stock a buy?

This is an important validation of the Archer business plan, but a lot must happen before Southwest customers hitch a ride with Archer to the airport. Archer is making progress navigating the regulatory hurdles that come with any new aircraft design but does not expect to launch service until late 2025.

Other companies, including Joby Aviation, are stride-by-stride with Archer in the race to commercialization.

What this does indicate is that, should Archer eventually win certification, there are market opportunities for eVTOLs. That's reason for excitement about what remains a risky, and likely volatile, stock.

Should you invest $1,000 in Archer Aviation right now?

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Lou Whiteman has positions in Joby Aviation. The Motley Fool recommends Southwest Airlines. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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