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AirAsia Plans to Add 100 Air Taxis to Ridesharing Platform

Madhu Unnikrishnan
February 16th, 2022 at 12:36 PM EST

Air Asia Evtol rendering

Capital A, the company formerly known as AirAsia, is jumping on the electric air taxi bandwagon with an order for up to 100 of the aircraft for its ridesharing platform in Southeast Asia. The order affirms the global race to add air taxis to bridge the last mile between airports and city centers and cut airlines’ carbon footprints, but raises significant questions about whether regulators will approve the technologies in time to meet the industry’s ambitious goals.

The airline signed a memorandum of understanding with lessor Avolon for 100 Vertical Aerospace VX4 electric vertical takeoff and landing (eVTOL) aircraft. Last year, Avolon ordered 500 eVTOLs from Vertical in deal worth $2 billion. The lessor has now placed 90 percent of that order with airlines, with 250 to Brazil’s Gol and 100 to Japan Airlines.

AirAsia will allow passengers to book flights on the VX4s through its “Super App,” and as part of the company’s new ridesharing service in Malaysia. The move is part of the company’s rebranding as a digital-first travel and lifestyle company, rather than an airline that offers adjacent services. Among the examples of this strategy include allowing passengers to book tickets on other airlines and letting merchants schedule e-commerce package deliveries all through its mobile app. AirAsia Ride, the ridesharing service, launched in Malaysia last year.

“We are now much more than just an airline with over 20 products and services on our super app leveraging off each other including flights, hotels, food, retail, delivery, ride hailing and more,” Capital A CEO Tony Fernandes said in announcing the deal with Avolon. “In the VX4, we have identified what we believe will be the eVTOL aircraft of choice and we are thrilled to be the launch airline for the aircraft in Southeast Asia.”

Fernandes did not offer a firm timeline for when the VX4s will join the fleet or be in service but said they are expected to be in service by 2025. Vertical Aerospace has said the VX4’s first flight is expected this year, with regulatory approval expected by the middle of the decade. This tracks with what its competitors, including Archer, Wisk, Embraer’s Eve subsidiary, and Airbus have said of their own eVTOLs. Yet no regulator in the world has approved an eVTOL for passenger flight, and electric propulsion remains largely uncertified for passenger operations. It is important to note that the certification process for conventional aircraft powered by gas-turbine engines can take several years.

But eVTOLs have undeniably captured airlines’ and lessors’ attention by offering a solution to a problem that has bedeviled airlines. The “last mile,” or the segment of a trip from a major hub to a smaller city, long has been in airlines’ sights. Connecting hub airports with smaller markets can be done more profitably — and more sustainably — with a small eVTOL, rather than a regional jet. And proponents of the technology claim that an eVTOL could be more sustainable than a car carrying a single passenger, even across a major metropolitan market, for example from Los Angeles International Airport to downtown Los Angeles. EVTOLs also will help airlines achieve their ambitious climate-change goals by bringing down fuel-consumption averages.

Avolon CEO Domhnal Slattery is bullish on the promise of eVTOLs. “We are delighted to partner with AirAsia who share our vision of revolutionizing the future of air travel,” he said of the deal. “Together we will develop a ride sharing platform and bring the zero-emissions VX4 aircraft into service, positioning AirAsia as the operator of choice for sustainable air travel in the region.”

But Slattery’s enthusiasm is not universally shared among lessors. AerCap CEO Aengus Kelly admitted that eVTOLs and electric propulsion are the future, but that it will be many years before a viable passenger eVTOL is certified. “At best, at the moment, it’s coffees and prescriptions that are being delivered on local drones,” Kelly said last year.

But the market now has some heavy hitters. Airbus announced its own eVTOL program last year as part of its Helicopters division. Embraer’s Eve subsidiary, which notched 90 orders for its aircraft this week, expects to have a prototype flying by 2026. And Boeing backed Wisk’s autonomous eVTOL with a $450 million investment last year.

Vertical’s VX4 is piloted, and is capable of carrying four passengers up to 100 miles at 200 miles per hour. The company counts American Airlines and Virgin Atlantic Airways among its customers. Vertical raised $300 million through a SPAC listing on the New York Stock Exchange in December.

Vertical CEO Stephen Fitzpatrick said he is “thrilled” by the AirAsia deal and to be “be bringing zero emissions flight to people all across Asia.”

Madhu Unnikrishnan
February 16th, 2022 at 12:36 PM EST

Photo credit: Air Asia Evtol rendering AirAia

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