Good afternoon and welcome to the second day of J.P. Morgan's Industrial Conference. I think this is the second, maybe third year in a row we've had Archer here, and second in a row for you coming, Nikhil. We have Nikhil Goel, Chief Commercial Officer, if I have that right. He's going to pitch it for Adam Goldstein, who couldn't make it, unfortunately. First of all, thanks for supporting the conference. Again, we've really tried to prioritize a lot of these emerging, you know, flying car companies. If you've kind of used the parlance, so-called eVTOL. Maybe first of all, starting off, Nikhil, you can perhaps help us understand the high-level strategy of the company. You know, if there's any key takeaways from the recent quarter, feel free to do that.
Maybe high-level strategy, I'm sure we'll double-click on a number of things throughout the conference, and then we'll let the audience ask questions as well.
Yeah, look, overall, Adam founded the company to really build the future of aviation. To us, that means building a future where aviation is ubiquitous, and it's electric, and it's affordable and accessible to move people and goods from A to B. That is really what Archer's mission on Earth is. We have three lines of business. We sort of talked about that in our last quarterly earnings report. The first one is commercial. We are building Midnight, which is our commercial air taxi. It seats four passengers and a pilot, and it allows you to take commutes that could be an hour or longer and turn them into minutes in some of the largest cities in the world. We have a military business, so we've launched Archer Defense in partnership with Anduril.
that's building a variant of that Midnight product that will be hybrid and autonomous, for very specific military purposes. Then we have a software platform that underlies both of those divisions. That is what we've been building. What we talked about in our earnings report, was probably the biggest focus was around launch. We announced our intent to launch as soon as this year, in the UAE, specifically in Abu Dhabi. We announced the formation of a program that we call Launch Edition. Essentially, it's how we think about launching the first dozen or so aircraft in cities all over the world. We announced our first partner for that, which is Abu Dhabi Aviation. It's one of the largest helicopter operators in the world. It's co-owned by Mubadala and ADQ.
They have agreed to be our first sort of customers for this Launch Edition aircraft. What they'll do is they'll take two aircraft and work with us to launch in coordination with the government, in coordination with the regulators in the UAE, hopefully by the end of this year. That's what we're targeting. That was sort of the biggest announcement. The second piece of that was our ARC factory in Covington, Georgia, which is sort of now shifting from construction to operationalizing, where we're, again, the goal is to build up to 10 aircraft this year. You know, overall, we're really excited to have dozens of customers all over the world that are excited to launch Midnight. As I mentioned, the goal is to launch this year in the UAE.
We have a total of five companies in the eVTOL slash UAM space here at the conference. How do you view the global competitive landscape in, in this space? And look, we've seen Archer come out at the beginning, you know, talking about an owner-operator model. It kind of feels like shifting more to OEM, but I do not know if it works in your mouth. How do you see the landscape and where does Archer fit in that?
Yeah, you know, I think there are a couple of things. One is from the outset, we've, I think, been pretty consistent that our primary goal is to sell aircraft. You know, this was back in, I think, 2020 when we announced our first sale to United, a sale of up to $1.5 billion worth of aircraft. Since then, we've brought on a number of airline partners across the world. Southwest, Etihad, Japan Airlines, and IndiGo, which is the third largest airline in the world, and the market leader in India. We have been able to assemble a very, very strong collection of customer partners that we'll go launch with.
But then from a landscape perspective, you know, on the air taxi side, though, so the commercial side that I mentioned at the outset, what I think we have seen is that this business is very, very capital intensive. just yesterday, Adam posted online around how the challenges of raising capital in this industry have started to really cause some consolidation. that's what's led us to open, for example, Archer Germany, where we were able to bring on some rock stars from Lilium, you know, one of the players that, that used to be out there. and so we've been able to build that team over time as the industry sort of begins to consolidate. you know, we see a couple of big players still left in the air taxi market. I think the most prominent is Joby, who has built a really phenomenal product as well.
And then on the military side, you know, to my knowledge, we are the only ones out there pursuing a real program of record, especially in the way that we are with our partner, Anduril. And so we do not see any competition, on the defense side for eVTOL. and, you know, we're grateful to be in a place where we've got a phenomenal partner. we've got a phenomenal team building sort of a variant of the, the Midnight product that we've, we've already, produced.
I wanted to talk about the current regulatory landscape and, you know, touching upon the FAA in the U.S., as well as GCAA in the Middle East, maybe even EASA too. You just mentioned Archer Germany now. I guess how should we think about what appears to be an FAA maybe pause versus maybe GCAA, which appears to be a bit more aggressive? I mean, how should we think about the timeline for certification and across these various regions and maybe differences between the certification processes, if any?
Yeah. Look, I think that one large misunderstanding that's sort of emerged in this industry, particularly for Archer, but really for everybody, is that people continue to look at this, you know, FAA certification as this critical milestone. It definitely is a big milestone, but it's not critical path to getting to market. Here's what we've seen over the last year. From a rulemaking perspective, the FAA has done the majority of the work. They released the SFAR last year, the Special Federal Aviation Regulation. What that did was it established the complete rule set for how eVTOL will be certified. What's happened since then is a lot of sovereign nations, the UAE being the leader here, has said, okay, the rule set exists. A lot of the work from the certification perspective has already been done.
There's no reason why we as a sovereign country with our own regulatory body can't actually go, complete the last several steps ourselves and authorize someone to fly here, within our country. That's what the GCAA, which is the federal regulatory body that governs aviation in the UAE, has done. That's exciting for a few reasons. One is, a lot of other countries within the region, so think Middle East, North Africa, think Asia, have said, okay, the UAE is one of the countries on Earth with the strongest records in aviation safety. You've got two phenomenal airlines with Emirates and Etihad. You've got dozens of wide-body aircraft, whether it's A380s or Dreamliners, that fly in and out of the country every single day as two of the major transit hubs in the world.
If that regulatory body is saying, hey, we are going to enable commercial flight within our country as soon as this year, maybe there's something there. What we have started to do is get inbound from countries and regulatory bodies all over the world saying, hey, how do we do something similar? Maybe how do we go leverage what the UAE is already doing to go launch within our own country? You have probably seen online some of the posts around other countries that have been excited, where, you know, we have gone to speak or go meet with officials. That is, I think, point number one. Point number two is here at home, you know, we were just last week in D.C. meeting with some of the top regulators, you know, in the country, including the Secretary of Transportation, Sean Duffy.
Adam, you know, was invited to go meet with him. The message from him was sort of, you know, do not count America out. I think what we have seen is that America, and particularly this administration, wants to be first and does not want to be last, especially when you have got a product that is built here in America, by predominantly American talent that is also serving American defense. I think there is a lot of excitement now to figure out how, you know, we can accelerate things here on the home front also.
The FAA has discussed 2028 as sort of a year for scaled eVTOL operations. You know, peers here already are talking about their partnership with Delta, maybe even as soon as this year, probably fairly small scale. I mean, for the people in the room, if we land in, you know, Newark in the coming years, when should we assume we might be able to jump on a plane to Manhattan?
Yeah. Look, first of all, we work with two of the largest airlines in the country, United and Southwest. United's invested in the company something like five times. They have already placed pre-delivery payments against their up to $1.5 billion order, so they've been a long-time strong partner. Southwest is a new partner that we brought into the fold. Between the two of them, we cover most of the major airports in the country. You know, the FAA has, obviously, as I mentioned before, continued to be increasingly supportive. What we are doing today is we are working hand in hand with both of those partners to, as you're, to your point, we see a world where in the U.S., eVTOL is at scale in major cities, in time for the Olympics.
That was actually sort of that vision was set out by Billy Nolen, who was the previous acting administrator of the FAA, who now works for Archer. He's our Chief Regulatory Affairs Officer. He has continued to drive that not just internally at Archer, but with his, you know, former colleagues at the FAA. The way that we're going to get there is what we are doing today is we're working with both United and Southwest. We're looking at some of the major airports that they operate in. For United, that's SFO and Newark. For Southwest, that's places, you know, within L.A. and within California. What we are doing is we're thinking through every aspect of the operational and customer experience.
For example, if you are, say, a premium flyer or a loyal flyer with United, and let's say you fly SFO to Newark, you land, maybe one day in the future, you would get an air taxi as part of your journey into Manhattan. We are thinking through what every part of that looks like. Okay, when you land at Newark, what happens to your bags? What does the journey look like for you to have that seamless airside transfer into your air taxi? Where within Manhattan are you landing? What does the experience look like to get you home on the final mile? We are hammering out every one of those pieces today. As we continue to do that, we will start to ramp up early operations and get to a place where that's at scale.
Yeah. You know, mentioned before, like it could end up being the Middle East or UAE before some of this happens, even before the U.S., but maybe ahead of that, coming back to piloted flight, and to the extent that you answer, what are the remaining steps before you complete piloted flight on the conforming aircraft in the U.S. and perhaps UAE later this year?
Yeah, look, virtually very little, here in the U.S. We're just, you know, we talked about this in the earnings call, Adam did. We're just now in the final stages of testing, you know, the aircraft's there. We released some photos of it. We're just in the final stages of testing, and then we'll talk about it when we talk about it.
Mm-hmm. Okay. We'll look forward to that. Coming back to the opening comments around the Launch Edition, and I guess, you know, when we think about this, will all the Launch Edition customers receive, you know, conforming aircraft that you intend to certify? Are these, you know, are these pre-conforming aircraft? I guess, how much demand is there from launch customers? I think you mentioned, you mentioned multiple jurisdictions, but, you know, as we think about the opportunity from a revenue perspective, maybe this year and next year.
Yeah, you know, what we've talked about publicly is these will be some of the first aircraft that come out of the line. These are identical to what we are planning from a production perspective and a commercialization perspective. The entire intent of the Launch Edition program is to learn how to operate. You know, it's sort of funny at the outset, call it two, three years ago, I think people were in the mode of finding early potential customers. You would announce these sort of large orders that were all positive intent, but when you actually get pragmatic about how you deliver those aircraft, it's not like you're going to go drop ship somebody 50 aircraft and say, go have fun.
This is a very intricate process where we have to keep safety top of mind and then really go build out the customer experience together. What the Launch Edition looks like for us is, let's say you're United or in this case, Abu Dhabi Aviation, who we announced with, they would take an order of two to three aircraft. The reason you want two to three is so that you can actually start to simulate and operate what looks like a service. You have multiple aircraft that you're coordinating with our software. You are ramping up every piece of that. That means we will ship you a simulator.
We will have Archer personnel on the ground, everyone from flight test personnel to maintenance staff to pilot training to even like local government relations leadership, everything you need to successfully commence a service there on the ground. We'll work hand in hand with you for a period of 18 to 24 months. At the conclusion of that, the goal is for you to be self-sufficient, meaning you have started to train up your pilots, you have the maintenance framework, you really understand how these aircraft operate, and you're ready to expand your fleet. I think the customers that we speak to have been very, very amenable to it and excited about that. I'm pretty confident that we'll have more demand than we have supply.
That puts us into a fortuitous place where we can be very, very strategic about the partners we choose and the regions we choose.
Yeah. Maybe, I guess the closest one being the UAE, what is needed from a resource perspective between infrastructure, you know, labor, maintenance, pilots, I guess, you know, community engagement? What is Archer doing on that? I guess what are your other sort of partners slash stakeholders? What is their role in that?
Yeah. Look, we've spent the last two years really growing the ecosystem in the UAE to get to this point. It really all started with, probably from the investor perspective. We've got two of the largest sovereign wealth funds in the UAE, really in the world, as part of the Archer journey. The first is Mubadala, and then the second is IHC, which is, you know, part of the royal family. Both of those have been phenomenal investors that have been more than just money, but really helping us go navigate the country. There's probably five or six pieces that have been very critical. First is just support from the royal family. Sheikh Mohamed bin Zayed, who's the ruler of the country, his son, Sheikh Hamdan, is really overseeing what they call a Smart and Autonomous Systems Council.
That has the mandate of bringing all of these advanced technologies, air, land, and sea, into the country. We have been sort of their chosen partner on the air taxi front. The regulatory piece comes next. As part of that, they have gone to the GCAA and said, hey, how do we go partner together to build a safe framework to bring the aircraft to the country? Third is the set of private partners. One as an example is Etihad Aviation Training. They are one of the largest institutes to train pilots in the world. They are a subsidiary of Etihad Airways. You know, you go to their facilities, they've got dozens of these wide-body and narrow-body simulators, and it's very, and they serve something like 60 airlines. They're truly world experts at what they do.
What they're going to do is fold in Archer into their program. They'll house one of our simulators and start training pilots locally, not just for the country, but really, you know, potentially regionally as well. You need an operator. Abu Dhabi Aviation, which is one of the largest helicopter operators in the world, as I said, is co-owned by Mubadala and ADQ. They have, you know, agreed to pay us money to take two aircraft, as well as our personnel and start operating them this year. The end result of what that looks like is you've got the government, which is accelerating infrastructure and putting money into us. Then you've got private and public entities that are working with us to go stand this up as quickly and safely as possible.
It's a really good, call it kind of a consortium type of approach, where I think we have a high probability of success in doing this quickly here.
Can you walk us through a similar corollary for the U.S.? I mean, FAA aside, who knows what the timing is, but all these same things have to be solved here too. What are the typical corollaries there? I fear in the U.S., things like red tape and you can't nimbyism, you can't build a new infrastructure or anything like that. I'm guessing it'll be more around the existing infrastructure, but I don't want to.
It's a combination of both. We do think that just globally, but particularly here in the U.S., there's a big, big opportunity to leverage existing infrastructure. There's something like 5,040 airports in the country. We only use roughly 38 of them to any sort of heavy extent. On top of that, you got another 5,000 private airports and helipads. You have a ton of infrastructure, particularly within our big cities. Los Angeles alone has, you know, over 200 helipads. San Francisco's got 28 just within the city of San Francisco itself. Almost none of these are used because helicopters are very loud and people don't want helicopters in their backyard. We've started to unlock that in a couple of different ways. One is through FBOs.
We are partners with both Signature and Atlantic, who have phenomenal locations, everything, you know, here in the Tri-State area, places like Teterboro and Westchester, as well as, you know, East 34th Street. On the West Coast, you've got FBOs all across the L.A. Basin, all across the Bay Area, you know, as far north as Napa, as far south as San Jose. We are working with both Atlantic and Signature just to slowly start to electrify those properties so you can fly in and out of them. On top of that, we have selected strategic partners to build bespoke infrastructure. In Los Angeles, for example, we have an exclusive partnership with the L.A. Rams, for SoFi Stadium. SoFi Stadium is one of the key landmarks within L.A.
It's going to host over the next three years the World Cup, the Super Bowl, and the Olympics. Traffic in and out of there is just absolutely manic, especially on game days. They're very excited to go build infrastructure there for concerts, for games, et cetera. Similarly, USC, that's got four helipads on their campus. They're very excited to partner with us and again, use that as a focal point to go launch eVTOL in L.A. Those are just the ones where we've been public. You know, in the Bay Area, we've got one in South San Francisco that houses Stripe and Genentech amongst other companies. Those are just the ones where we've been public. We have, you know, dozens of these opportunities all over the world where people want to go build infrastructure with us.
Just like, who owns the, you know, who's going to be the, I guess, they have to deal with pilot, pilot training, maintenance, and things like that. Like, you know, you talked in the past about, you know, this is where the relationship with like United may come into the fold.
Yep. Earlier this year, we announced our Part 141, which allows us to establish a pilot training academy. We've taken a pretty forward role in that. That's also where we're lucky to have the partnerships with United and Southwest. United, a couple of years ago, announced their Aviate Pilot Training Academy. They see this as a very, very advantageous thing for them because, the way they look at it is, you know, you can become an eVTOL pilot after roughly 500 hours. There's this sort of gap between the 500-hour mark and kind of roughly the 1,500-hour mark where you would become a United pilot. They see this as an opportunity to start building those pilot hours early, get pilots into the pipeline.
You know, for some of those folks, they may be an eVTOL pilot forever because it's a job where you can sleep in your own bed every night. Some of those folks may graduate to go become a United pilot. You know, both paths are phenomenal. We've been working hand in hand with United for several years on the problem here. What's exciting is, you know, at Archer HQ, just about every day, we'll bring somebody into the facility and have them go fly our simulator. That could be an experienced, you know, fighter pilot. It could be a 12-year-old child, and usually the 12-year-old child has the easiest time really picking up the controls, because it is a significantly easier aircraft to fly.
We're excited that this will open up a whole new class of pilots.
What's the age limit before you can get a pilot's license? All right. Let me pivot here to defense. It's been an interesting evolution, you know, for the space and for Archer. I guess, you know, an eVTOL, maybe obviously you need to think about more of the hybrid side, but first of all, you know, it started off with some program with Agility Prime and that whole, it seems like that's evolved quite a bit and maybe the prior sort of $140 million-plus opportunity maybe you have shifted or changed a bit, but how has it evolved? I guess what is the current level of engagement with the DOD and maybe perhaps with the partner you have here with Anduril?
Yeah. Look, what Agility Prime and AFWERX did was awesome because what it did was it really started to highlight to military leaders across the armed services the benefits of eVTOL, particularly the electric part around, hey, this is a lower noise signature, lower heat signature, a lower cost alternative to helicopters. It started to get people excited about that. We participated in that along with a lot of our peers. I think though that was never intended to be a pathway to a commercial program of record. It was intended to be more sort of focused on R&D. As you've seen, the Air Force has recently sort of started to wind down funding for that. What's come next is the opportunity that we see with our partners, Anduril. You know, we started working with them last year.
We announced our new division of the company, Archer Defense, specifically to go work with Anduril on, as I mentioned earlier, a variant of Midnight. This variant will leverage a lot of the same IP, a lot of the same architecture, a lot of the same sort of base foundation of Midnight, but will be hybrid electric. That will get you enhanced performance, you know, when you think about range, speed, and payload. It will get you the stuff that the military customer needs while still preserving the benefits of electric, namely low heat signature and low noise signature. What we are doing with Anduril is, you know, a couple of things. One is the reason we partnered with Anduril is they have really broken the mold around how you sell defense.
They've proven that you don't have to necessarily be a big three government contractor to be able to go win big programs. What we've done is we have sort of a very, very specific customer. We have a set of requirements that we are, you know, engaging on where we feel increasingly confident that the variant of Midnight is going to be able to go satisfy, and we're continuing down path there. Earlier this year, what Adam announced was that that opportunity was actually larger and nearer term than we even originally anticipated. On the backs of that, we were able to bring on some partners that wanted to be part of the journey and bring another $300 million of capital into the company as well, including BlackRock.
That's continued to be really exciting and we continue to feel strongly about that. We'll share more soon.
Yeah. You know, it certainly caused a lot of buzz and I know it's hard to talk about, but I guess conceptually, how should we think about this market opportunity from a size perspective? When can it start? I guess when can your hybrid VTOL really be ready to, you know, be put on, I guess, joint product with Anduril?
Yeah. Look, I think it's too early to say. What I will say is that the opportunity is nearer term than we thought, and it's something that, as we continue to share more, I think will continue to look more and more real and more exciting. It is larger than we originally expected, and nearer term than we originally expected as well.
How fungible is the technology or maybe even the personnel you have internally, you know, when we think about a fully electric powertrain versus a hybrid electric powertrain?
There's a lot of synergy for a couple of reasons. One is, you know, we've assembled one of the best powertrain teams in the world. We've got roughly 100 people who are alumni from Tesla, SpaceX, Apple, et cetera, where, you know, you go to our automotive style battery factory in California and there are very few things outside of, you know, Tesla that really operate at that scale with that level of professionalism. That same team will be able to go build battery packs that also, you know, provide the electric portion of the hybrid vehicle. That's sort of a shared platform that's going to be very, very advantageous for us that is nearly impossible to go replicate, at least without a lot of time and money. That's number one.
and then, you know, sort of number two is I think, from a talent timing perspective, it's very interesting because a lot of the folks that we have at Archer, you know, started at the, the front end of the development program for Midnight. Midnight's now in the sort of certification and test part of the program. So a lot of the zero to one engineers who are really great at conceptual design, really good at designing aircraft, get to now shift over to a new fun problem of, of designing this aircraft. So it's a way to kind of keep the talent base consistent without, you know, layering on additional OpEx.
Yeah. I want to pause and see if there's any questions. I certainly have a lot more, but I want to see if anybody has any questions, before we move on. All right. Maybe I want to come back actually to launch and I thought it was interesting in the last call. I think a lot of the pricing or unit economics that were put forth, called three or four years ago, have kind of been evolving, maybe shifting, maybe shifting to a positive, you know, level. How should we think about the unit economics in, in your business and how should we think about, for example, launch in the next few years in terms of maybe a margin profile?
Yeah. You know, there's a couple of ways to think about it. On the aircraft side, we put out numbers last year that were meant to be sort of forward indicative numbers of what production could look like. What we roughly outlined was that in 2025 and 2026, if we back up a little bit, our partner on the manufacturing side is Stellantis. The reason we worked with Stellantis, for those of you who aren't familiar, that's the automotive group that owns brands like Jeep, Ram, Maserati. It's the third largest automaker on the planet, whose Chairman and CEO is John Elkann, who also is the Chairman of Ferrari. They've been not only big supporters of the company, but have also invested in the company multiple times.
The reason we partnered with them is these aircraft at their core are really more like luxury cars than they are aircraft. They're, you know, built with carbon composites and they need to ultimately be assembled at scale, large, you know, with large amounts of autonomy. That factory that we built with them is in Covington, Georgia, and the first phase of that will be able to produce about 650 aircraft per year and over time could be expanded to produce 2,000 aircraft a year. This is, you know, set to be one potentially one of the largest aviation factories in the world. The reason that's really important, you know, circling back to your question, is what we did then next was we said, okay, how is this factory going to scale up?
Because at the outset, you do a lot of stuff that does not scale. Then over time you add in more and more increasing levels of autonomy into the process or automation into the process. What we said was, you know, we believe that this year and next year we will be able to produce roughly tens of aircraft, call it at a rate of two aircraft a month. In the years that follow, you know, produce hundreds of aircraft per year. What that does is it gets us to a place where in the 2027, 2028 timeframe, you know, you get to a place where you can achieve up to a roughly 50% gross margin on the aircraft. That really gets you to a place where you start to approach break even on the factory.
That is where the model, as I mentioned before, of selling aircraft is really advantageous because we have built this order book that now is in excess of $6 billion. As we start to deliver on those, you get the revenue on the front end. That is why we think it is a good model where you have these customer partners that really want to go deploy Midnight at scale.
Mm-hmm. I want to come back to maybe manufacturing a bit, but, you know, I wanted to maybe hit the third pillar, which is software. And kind of opening a question, but what is your sort of competitive mode here? Where does this, how does this help you drive your business, capture customers, or maybe it's more of around the operations after you've already captured your, your customers, you're selling aircraft to, but how does that fit in the overall strategy?
Yeah. I think of software in three or four different buckets. You know, first is the flight control software on board the aircraft itself. That's one of the few areas that we've chosen to develop ourselves because it is so important to the core safety and control of the aircraft. Then there's sort of the software around both the operations and the ecosystem. On the operations side, you've got sort of your suite of apps. You've got the pilot app, you've got the customer app, you've got the app for the team that's operating the Vertiport. This is all stuff my team built at Uber.
When we started Uber Elevate and we launched, some of the early Uber services with helicopters, we took a lot of the knowledge and expertise from Uber's core ride sharing product and pulled that over to the aviation product. How do you think about orchestrating multimodal flights, you know, ground to air to ground? How do you think about when you want to order an air taxi on your phone, what does that user experience look like? We really spent a lot of time constructing those things. A lot of that team is now here at Archer. We get to rethink a lot of it, but also pull from a lot of the know-how and just sort of experience there. There's sort of the ecosystem of apps.
There's kind of the layer of all of the route optimization we do in air traffic control for our aircraft. There's a lot of goodness in there that really sort of orchestrates the entire system. How are you thinking about, particularly, for example, air ops? If you encounter inclement weather in the New York area, how are you thinking about rearranging the planes and the pilots and the crew to basically maximize utilization?
Mm-hmm. Again, I might see if you've got a question over here.
Hey, good afternoon. I cover United and Southwest, so I'm coming at this from a somewhat different perspective, and I don't want to waste the time of investors and prospective investors in the room. I'm mostly curious about how the product will tie together with commercial flights. What sort of, and I think in per seat terms, so to the end user, recognizing that there's going to be a high degree of pricing variability, is this a product that's going to cost a dollar a mile, $5 a mile, $10 a mile, just to help me sort of better understand the market size from the airline perspective?
Yeah. So, you know, what we've projected previously and sort of in a public domain has been, we expect at the outset, the cost to operate to be roughly, you know, call it $4-$5 a mile. So roughly on par with an Uber Black. That's the point that, you know, that's on day one. That's a level that we expect is certainly not for everybody, but is a phenomenal substitute for taking an Uber to the airport. You know, zooming out a little bit to answer your question, you know, a lot of people ask me like, why are airlines so interested in this? There's a few reasons. One is if you look at the, you know, and you cover airlines, so you know this, like if you look at where airlines make all their money, it's on the premium traveler.
It's, you know, a lot of the people in this room, and a lot of these airlines are constantly in battle for how do you differentiate to go satisfy that customer. Let's say you live in Brooklyn and you have a choice of, you know, would you go to Kennedy or would you go to Newark? A lot of people who live in Brooklyn may choose to go to Kennedy, but maybe they like flying on United. If you can take an air taxi and get to Newark within seven minutes, now you're indifferent. In fact, maybe you have a preference to go fly United. That story has repeated itself all over the world. That's why, you know, we've been able to go work with folks like Japan Airlines, the leading airline in Japan.
You know, for anyone who's been to Tokyo, getting from the middle of Tokyo to Narita can take you an hour and a half or longer. All of these airlines are looking at airports, which are increasingly further from the urban core and saying, gosh, this is a pretty phenomenal differentiator for my business. By the way, it's something I know a little something about. That's why we've been lucky to have all these airline customers that have really taken a hard look at it.
For certification purposes, is the FAA going to require that it operates between heliports, or is there a scenario down the road where, you know, assuming there's space, you know, I could get picked up after a soccer game in, you know, Ridgefield, Connecticut, and, you know, so I don't miss kid's game and zip to Newark Airport, or is it only going to be heliport to heliport? Thanks.
Yeah. It'll be Vertiport to Vertiport. You know, what that means is, look, if you look at how helicopters operate today, there is sort of, there is guidance around how you can operate helicopters safely from private property. That'll be more of a phase two. I think phase one is, let's go establish highly trafficked routes, where you can operate in almost a gondola-like service so that it's very efficient, very safe, high utilization, high load factor. Then over time, as this becomes more commonplace, I expect you'll see, you know, more sort of lower cost forms of infrastructure emerge.
Thanks. Maybe as we wrap up, I guess, is there anything that's being, I guess, misunderstood about the Archer story, maybe as part of your closing remarks, any particular milestones? You mentioned flight testing. We'll keep our eyes peeled for that. What else would we be looking out for this year?
Yeah. I mean, as I mentioned earlier, I think the biggest misunderstanding in the industry is that nothing can happen until FAA certification. As I said earlier, FAA cert is definitely an important milestone, but there are multiple, diversified pathways to revenue before that. One is international, where you've got sovereign nations like the UAE who have committed to launching within their country commercially. The second is military, where, as I said, I think we're the only folks that are really pursuing a large program of record on the defense side. Both of those give us opportunities for revenue here in the early years. Meanwhile, we'll continue pursuing FAA certification in earnest. As I said, the goal is to really be at scale here over the next several years.
Nikhil, really appreciate sharing the insights here. Second year in a row, we've had a chance to, you know, see the progress and we look forward to following the progress looking ahead. Thanks again.
Of course. Thanks for having me.