Joby Stock (NYSE:JOBY)
Investment of at least $60 million from Delta Air Lines (DAL -1.24%) in air taxi startup Joby (NYSE:JOBY) is part of a larger strategy to collaborate with Joby. The announcement sent Joby stock price soaring by as much as 15 percent. Investors saw it as a validation of the company’s strategy and technology.
What’s the Reason?
Several businesses, including Joby, have gone public in the past 18 months to create electric aircraft capable of vertical takeoffs and landings (eVTOLs). The planes are meant to supplement the giant airplanes that fly people across continents by providing short trips inside significant cities.
While these aircraft are still in the testing phase, Delta has evidently recognized something in Joby to take a chance on him. The major airline announced a $60 million investment in Joby Stock on Tuesday, with the possibility of an additional $200 million if the firm reaches specific goals.
Initially focusing on New York and Los Angeles, Delta plans to eventually extend Joby Aviation (NYSE:JOBY) eVTOL service to San Francisco, Miami, and London.
“This is a revolutionary opportunity for Delta to create a time-saving, distinctively premium home-to-airport option for consumers in important areas in which we’ve been investing and developing for many years,” said Delta CEO Ed Bastian.
Joby Aviation (NYSE:JOBY) anticipates initiating service in 2024 if all necessary permissions are obtained.
What Should You Do Now?
There is now somewhat of a land grab happening in the eVTOL industry. In addition to Delta, Toyota Motor and JetBlue Airways’ venture arm are now investors in Joby stock. While Vertical Aerospace has received investment and orders from American Airlines Group, its rival Archer Aviation is associated with United Airlines Holdings.
There seems to be a genuine demand for these electric mini-planes, which would effectively avoid traffic congestion and connect large airports to distant suburbs. With so many investors seeking profits in what is still a volatile market, however, none of these equities can be considered a sure bet.
Joby’s partnership with Delta is a massive step toward guaranteeing a market for its planes if and when it does launch commercial service. Still, it won’t matter much if the business can’t get regulatory permission and find out how to mass-produce its aircraft first.
Featured Image- Unsplash @ John McArthur
Author Shariq Khan 
