Archer buys an airport

opinion

by Alasdair Whyte

November 15, 2025

Archer Aviation's Midnight aircraft. (Photocredit: Archer).

Take the amateur sourdough baker who fulfils their dream of opening a small sandwich shop. Customers adore their baguettes, so they hire a consultant to help them grow the business. They recommend vertical integration and taking control of the supply chain.

The next thing they know, they are sitting in a combine harvester harvesting grain from the 50,000-acre field they own.

Or, when during a haircut the consultant tells their local barber to buy an iron ore mine in Chile so they can make sure they will always have scissors.

If you take vertical integration to its logical step, every service company should buy children’s nurseries and a chain of undertakers to cover both ends of their customers’ lives.

You may think that this is absurd, but this week Archer Aviation, an eVTOL manufacturer, agreed to pay $126m in cash to buy the lease of Hawthorne Airport in Los Angeles.

“Archer plans for the airport to serve as its operational hub for its planned LA air taxi network operations, including serving a key role in the LA28 Olympic and Paralympic Games,” said the company in a statement. “Archer also plans to utilise the airport as an innovation testbed for the next-generation AI-powered aviation technologies that it is developing and planning to deploy with its airline and technology partners.”

Archer raised $650m of equity capital on the same day. Investors reacted to both announcements by selling shares. At one point the stock was down 19% but it did recover a few days later.

Investors who disagreed with the decision are right. Archer is not the only eVTOL company to be tempted. Joby, its rival, bought Blade’s helicopter operations for $125m in August.

Bill Boeing retired angry when his eponymous company was forced to sell United Airlines. None of the 11 CEOs who have followed him, however, have tried to buy another airline or felt they need to own airports. It is the same reason why business jet manufacturers no longer own fractional operators.

In recent years, the poor people managing procurement at OEMs have regretted giving up some control of their supply chains. But at no point have they decided to replicate

Soviet-style factories where iron ore and rubber came in at one end and a Trabant limped out the other. (Although, even now, aircraft manufacturers can look enviously at the 50-year backlog that these automakers had). There is no reason why eVTOL companies should be different from other aircraft manufacturers.

You can see why Archer and Joby might want to operate the first aircraft they build. If they are the operator, they can learn how to support them without upsetting real customers. But it is a gamble with cashflow. It takes a lot longer to get cash through lease payments than selling aircraft. It is not a long-term strategy.

After its latest equity raise, Archer says that it has $1bn on its balance sheet. History shows that this is not that much when it comes to aircraft certification.

Certificating an aircraft is the third hardest thing to do in aviation. Only building aircraft profitably and supporting them are harder.

Archer has enough to focus on now without buying airport leases. In its 2021 SPAC filing, Archer said it was on track to get FAA certification in 2024. (It did not.) By now it was meant to be in full-scale mass manufacturing and flying in the US. It promised to see break-even cashflow this quarter. It was forecasting global autonomous operations in 2028.

As far as we can tell, it has two Midnight aircraft prototypes flying now. Archer has just completed its longest piloted flight where a Midnight test aircraft flew 55 miles in 31 minutes. It reached 126mph and flew to 10,000ft, a record for the company. This is impressive but it still has a long way to go.

Archer says it picked Hawthorne Airport as it is the closest airport to Olympic venues such as the SoFi Stadium, The Forum, Intuit Dome and Downtown Los Angeles. The eVTOL company has got headlines being named as the official air taxi provider of Los Angeles 2028, the Football World Cup in Los Angeles in 2026 and as a host supporter for Super Bowl LXI in February 2027. We will see how many people get to fly on a Midnight at these events. It is unlikely to be many.

The eVTOL industry is weirdly obsessed with the Olympic Games. Volocopter made much of launching flights at Paris 2024 where it planned to transport spectators and competitors. In the end it managed a test flight from Versailles with some luggage. It then filed for insolvency in December.

We may be missing a brilliant strategic decision. But if Archer’s decision to lease Hawthorne Airport is correct, has it thought about how people will get there? A logical option would be to buy a ridesharing platform. For about $200bn it could get an Uber. But then it would also need to find a way to buy the roads to the airport.