Archer Aviation (NYSE:ACHR) shook the world of finances on Thursday with the crazy news that the eVTOL company signed a memorandum of understanding with Air Chateau International detailing the purchase of 100 Midnight aircraft worth up to $500M. This so-called top-tier private aviation operator in the United Arab Emirates, Air Chateau, is taking a risky plunge with the deal terms including an initial non-refundable, pre-delivery payment of $1M by December 31.
The company plans to lord over the region with these Midnight aircraft. The two entities will now work to formalize the definitive agreements covering the planned purchase over the coming months, with $4M of additional pre-delivery payments contemplated to be paid following signing. The relationship tries to shore up Archer Aviation’s (ACHR) recently announced plans to commence air taxi operations in both Abu Dhabi and Dubai in 2026. The fiasco also includes the intent to explore opportunities to collaborate on bringing in the infrastructure investment necessary for these cities to be ready for these planned operations.
Shares of Archer Aviation (ACHR) plummeted 2.73% in late afternoon trading on Thursday, causing many to question the prudence of the deal.