Delta Air Lines (DAL.N) said Tuesday it invested $60 million in air taxi startup Joby Aviation (JOBY.N) for a 2% equity stake, in a partnership that will initially offer passengers air taxi transport to and from airports in New York and Los Angeles.
Delta Chief Executive Ed Bastian told reporters the airline will also receive a board seat and the total investment could be increased to as much as $200 million.
Airlines and others are looking at developing transport services using battery-powered aircraft that can take off and land vertically to ferry travelers to airports or on short trips between cities, allowing them to beat traffic.
The companies plan to integrate a Joby-operated service into Delta’s customer-facing channels to provide short-range airport transport, which Bastian said would save passengers time and distraction.
Joby has said it plans to launch air taxi service in 2024. Asked if the companies anticipated beginning service by then, Bastian did not commit to a precise date, but said: “We do have a couple years to go in terms of figuring out how to start the journey.”
Joby in May received its Part 135 Air Carrier Certification from the Federal Aviation Administration, but before it can begin service will need additional regulatory approvals for its electric vertical take-off and landing (eVTOL) aircraft, as well as for building airport infrastructure and so-called “Vertiports” in neighborhoods for takeoffs and landings.
Joby CEO JoeBen Bevirt told reporters that routes to and from airports will be the “cornerstone” of Joby’s service.
The companies declined to say how much the service will cost or how they will split revenue, but Bevirt said a hypothetical trip to New York’s JFK airport could be shrunk from an hour or more to less than 10 minutes by air.
The agreement will be mutually exclusive across the United States and UK for five years after its commercial launch, the companies said, and run alongside Joby’s standard airport service in priority markets.
Several eVTOL startups are backed by major airlines or other large companies in the transporation sector.
Toyota Motor (7203.T) has invested $394 million in Joby. Archer Aviation (ACHR.N) is backed by United Airlines (UAL.O) and Stellantis NV (STLA.MI), while Vertical Aerospace’s investors include American Airlines Inc (AAL.O) and Honeywell International (HON.O).
As part of its investment in Vertical, American agreed to pre-order up to 250 aircraft potentially worth $1 billion and to make some pre-delivery payments.
American and United in August made a $10 million pre-delivery payment for 100 Archer eVTOL aircraft.
Delta does not plan, however, to operate Joby aircraft, Bastian said.
He said he hopes at some point the air taxis will be able to land on the tarmac to speed journeys.