Avolon, the aircraft leasing company, has announced a significant collaborative investment in the electric vertical take-off and landing (eVTOL) market with a $2bn-order for up to 500 eVTOL aircraft from UK-based Vertical Aerospace. 

Avolon will join Microsoft, Rolls-Royce, Honeywell, and American Airlines as equity investors in Vertical, working with Virgin Atlantic, a VA-X4 launch airline customer in Europe.

This agreement, which is subject to certain closing conditions, will introduce the ultra-short-haul aircraft category to commercial aviation in a move expected to revolutionise air travel with zero emissions aircraft.

The agreement will combine Avolon’s scale and deep industry relationships with Vertical’s position in the eVTOL space and will see both companies collaborate throughout the development, road map to certification and subsequent commercial roll-out of the VA-X4. 

Avolon’s existing young and fuel-efficient fleet will be complemented by an investment in a new category of ultra-short-haul aircraft that will produce zero emissions, the company said. 

Avolon, through its newly incorporated affiliate, Avolon-e, will become the customer for the VA-X4 and subject to appropriate operating, delivery and business requirements being met, will order aircraft valued at $1.25bn with delivery commencing in late 2024, with an option to acquire additional aircraft up to a value of $750m, the company said. 

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By GlobalData

Avolon-e has been established by Avolon to focus on investment in the zero-emissions eVTOL sector.

Dómhnal Slattery, the chief executive of Avolon, said: “Our order with Vertical will also accelerate the inevitable commercial roll-out 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.

“This order reaffirms Avolon’s position as an industry pioneer. With Vertical, we will revolutionise air travel and continue to reduce the impact of our industry on the environment. 

“In Vertical, we have identified a long-term strategic operator that shares our vision for a cleaner and more efficient mode of air transport. As we emerge from the Covid-19 pandemic, air travel will be materially reshaped with airlines needing to embrace emerging technologies that decarbonise air travel. We strongly believe that the VA-X4 will lead this transformation.”

Stephen Fitzpatrick, chief executive of Vertical Aerospace, said: “Avolon’s proven management team and strong track record of starting, and scaling, a global leading business made this an attractive opportunity and represents a critical milestone for us.

“This agreement, with an established aviation company like Avolon, will allow us to plug into their global commercial network of airlines, reaching key decision-makers in a fast and efficient manner.”

Avolon and VA-X4

Vertical Aerospace’s mission is to make air travel “personal, on-demand and carbon-free”. Its VA-X4 aircraft operates in urban air settings at speeds over 200mph and is “near-silent when in flight” and offers low cost per passenger mile.

“The VA-X4 aircraft is described as a piloted, zero-emissions electric vertical take-off and landing (eVTOL) vehicle. Its travelling range is over 100 miles and has a capacity for 4 passengers and a pilot.

The aircraft takes off vertically enabling it to operate in and out of cities and other confined locations. The VA-X4 is “100 times quieter and safer than a helicopter”.

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Avolon posts steady profits and lease revenues in 2019