United Air, Mesa Agree to Buy Up to 200 Small Electric Planes
(Bloomberg) -- United Airlines Holdings Inc. and regional carrier Mesa Air Group Inc. each agreed to buy as many as 100 small electric-powered planes from a Swedish startup -- if the aspiring manufacturer can develop the aircraft.
The U.S. airlines and Breakthrough Energy Ventures also will take an equity stake in Heart Aerospace, the companies said in a statement Tuesday. The investment amounts to $35 million, Heart Chief Executive Officer Anders Forslund said in an interview before the announcement. The company is targeting a 2026 debut for its proposed 19-seater, the ES-19.
The deal is part of United’s push to eliminate its carbon emissions by 2050 and thereby reduce its impact on climate change. Separately, the carrier’s United Airlines Ventures fund has also invested in Archer Aviation and made a conditional purchase of the aircraft that startup is developing, a four-seat electric air taxi with vertical takeoff and landing capability.
The ES-19, a four-engine turboprop, would fly without emitting carbon and offer a range of 250 miles (400 kilometers). United and Mesa will require the model to meet their “safety, business and operating requirements,” before they will actually buy the aircraft. Heart isn’t ready to disclose the ES-19’s price because it may change during development, Forslund said.
Heart had previously raised $6.7 million and expects to need about $500 million to develop and certify the ES-19, Forslund said. The Gothenburg, Sweden-based company was founded in 2018 in response to the Norwegian government’s mandate for all short-haul air travel to be on electric aircraft by 2040, he said.
For airlines, the ES-19 would potentially fit into a niche in the market for short-haul planes. Most regional aircraft have 50 seats or more, a capacity that’s often too large for the smallest markets. Destinations that could be served with the ES-19 include Modesto, California, and Purdue University Airport in Lafayette, Indiana, said United and Mesa, a key regional partner.
The smallest plane in United’s current fleet is a 50-seat jet. Mesa previously operated smaller turboprops for United and other carriers. In the 1990s, regional carrier Great Lakes Airlines flew 19-seat Beechcraft planes for United. Great Lakes shut down in March 2018.
Heart isn’t sourcing or developing new batteries for the aircraft and will use current models available in the existing market, he said.
“It’s essentially the same type of cells as you find in a Tesla,” he said.
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