Flying taxi firms face reckoning with Airbus veterans in charge

Two German aerospace startups leading a global dash into electric-powered flying taxis face a reality check after hiring former Airbus SE executives to lead their competing bids to bring the craft to market.

Lilium NV Chief Executive Officer Klaus Roewe, who joined last month and once led the Airbus narrow-body jet program, has ordered a rethink of the company’s PR strategy as its stock plummets, he told Bloomberg Wednesday.

Dirk Hoke, CEO at Volocopter GmbH since April and the former head of Airbus’s defense arm, has reined in the firm’s global ambitions to set a less demanding target for its first commercial flights, he said in an interview on Nov. 18.

“We need to show that we’re a very serious company and we need to communicate better on what we’re doing,” said Roewe, who worked at Airbus for 29 years. “We need to show facts and figures and data and show that this aircraft is really unique and has a lot of advantages.”

The two firms are among a clutch of companies leading the drive to develop electric vertical take-off and landing craft, as flying taxis are properly known. They turned to the industry veterans after programs once regarded by some in the aviation industry as akin to science fiction come under pressure to deliver following billions of dollars in investment.

Volocopter, founded in 2011, is aiming to bring the very first eVTOL to market in time for the 2024 Olympic Games in Paris, while Lilium, established four years later, has scheduled service entry for 2025. Both are working toward securing vital certification from the European Union Aviation Safety Agency.

Falling Stocks

Even as flying-taxi startups rack up orders -- UK-based Vertical Aerospace Ltd. has outline deals for 1,400 craft -- or agree Uber-style operating deals with city authorities around the world, those that are publicly traded have seen their share prices tumble since a series of listings via special purpose acquisition companies.

Having listed via a SPAC in September last year, shares of Lilium, which is based near Munich, have fallen 86% amid concerns over whether flying-taxi companies can source sufficient numbers of power-dense batteries and clear safety and regulatory hurdles.

Lilium this week concluded a $119 million capital increase from its existing shareholders as well as new investors. Companies including US conglomerate Honeywell International Inc. and Aciturri Aeronáutica SL took part in the increase, Lilium said.

The company, whose SPAC saw investment from Baillie Gifford, BlackRock Inc., Tencent Holdings Ltd. and Ferrovial SA, also faces a tighter financing environment for so-called moonshot technologies amid an economic slump.

Vertical Aerospace and US competitors Joby Aviation Inc. and Archer Aviation Inc. has suffered similar share-price declines.

Fewer Projects

Volocopter, which has almost 700 staff, has eschewed a stock market listing but could see fundraising prove tougher in future as central banks raise interest rates to choke off inflation.

The company, based in Bruchsal, near Stuttgart, has so far raised more than €500 million in launch financing, including $182 million from Saudi Arabia’s Neom, which is building a futuristic city on the Red Sea, and a fund backed by Chinese carmaker Zhejiang Geely Holding Group Co.

Other backers include logistics firm DB Schenker and the venture capital arm of chipmaker Intel Corp.

Following Hoke’s arrival, Volocopter has cut back on an array of municipal projects under consideration to focus efforts on the Saudi and Paris launches, together another in Rome and a fourth providing tourist flights around Singapore.

“I think it’s much more rational now,” he said. “You have to be realistic, starting operations in 2024 you can’t break even in 2025. I’m confident we’ll be there by the end of the decade.”