Text size
Wisk air taxi are capable of vertical takeoff and powered by batteries. There is no pilot.
Courtesy Wisk
Boeing
is going deeper into self-flying, air taxis. The commercial aerospace giant has bought eVTOL start-up Wisk.
eVTOL is short for electric vertical take off and landing. They are lithium-ion battery powered helicopter-like vehicles that have the potential to open up new markets for very short-haul flight by being quieter, easier to fly and cheaper to operate.
Wisk announced Wednesday it was a wholly owned subsidiary of Beoing (ticker: BA).
In a Wisk aircraft, there are no pilots. The vehicles can fly themselves and be monitored from the ground. It’s cool technology. They aren’t ready for commercial use though. Certification is years away. It’s a bet on the future and the acquisition gives
Boeing
more experience with battery-technology.
It’s a surprise, but the deal doesn’t come out of no where. Boeing owned part of Wisk and committed to $450 million in capital to the start-up in January. The final purchase price and terms weren’t disclosed.
There are publicly traded eVTOL companies for investors to watch. Shares aren’t doing much in response to the Boeing/Wisk deal.
Joby Aviation
(JOBY) stock is down 3.2% while the
Nasdaq Composite
is off 0.3%. Shares have been down most of the day and haven’t moved much since the announcement. Shares of
Lilium
(LILM) are down about 2.8% and have exhibited the same patter as Joby over the course of Wednesday trading.
Boeing stock is down 0.5% in late trading Wednesday. The
S&P 500
and
Dow Jones Industrial Average
are both down about 0.4%.
eVTOL isn’t likely to move Boeing stock materially soon. Today, investors are more concerned with the continuing, postpandemic recovery in global air traffic. Global air travel should exceed prepandemic levels at some point in 2023 and that is helping investor sentiment toward the aerospace industry. Boeing shares are up about 55% over the past 12 months.
Over the medium term, investors are watching for MAX 7 and MAX 10 jet certifications. Those are derivatives of Boeing’s MAX family of jets. Boeing has sold roughly 600 MAX 10 jets and 200 MAX 7 jets and it would like to start delivering those.
Boeing expects to deliver MAX 7 jets in 2023. It expects to deliver the MAX 10 in 2024. The Federal Aviation Administration, or FAA, ultimately controls certification and timing.
After the recover and the new certifications, investors can turn their attention to technology that resembles flying cars.
Write to Al Root at [email protected]
Source: https://www.barrons.com/articles/boeing-air-taxi-acquisition-5ac7c6ef?siteid=yhoof2&yptr=yahoo