Avolon in $2bn electric aircraft bet

Aircraft leasing company Avolon has agreed a $2 billion (€1.6 billion) order for electric aircraft with Bristol-based company Vertical Aerospace. The agreement for 500 zero-emissions vertical take-off and landing (EVTOL) planes will introduce the ultra-short-haul aircraft category to commercial aviation, a move described by Avolon as "a game changing development".

The lessor said its agreement with Vertical Aerospace will see the companies collaborating on the development and road to certification for the aircraft. Avolon will also invest in Vertical Aerospace, joining Microsoft, Rolls-Royce, Honeywell, and American Airlines. It will work with Virgin Atlantic, which will be a customer for the aircraft in Europe.

Separately, Vertical Aerospace said it would go public through a merger with a blank-check firm in a deal valued at $2.2 billion.

Avolon has established a new company, Avolon-e, to be the customer for the new aircraft, known as the VA-X4. Its $2 billion order will initially involve aircraft worth $1.25 billion with delivery starting in late 2024, with an option to buy more planes with a value of up to $750 million.

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“Avolon is proud to be a launch customer for the VA-X4 aircraft, demonstrating our commitment to a net zero carbon economy and to driving innovation in the global aviation sector. Our order with Vertical will also accelerate the inevitable commercial rollout of zero emissions aircraft. Before the end of this decade, we expect zero emission urban air mobility, enabled by EVTOLs, to play an increasingly important role in the global commercial aviation market,” said Avolon chief executive Dómhnal Slattery. – Additional reporting: Reuters