Is Money Drying Up For Air Taxis?

Air taxis have been quite the buzz for the past two years, are they now running out of lift?

On Aviation™
5 min readFeb 29, 2024
Image courtesy of Archer Aviation

What’s Happening: For over two years, the hot new thing in aviation was electric, vertical takeoff and landing vehicles (e-VTOLs) otherwise known as air taxis. While the technology has a lot of potential, like many things in the market there can be an excess amount of hype and buzz, far outweighing the level of development or capabilities of the technology. Needless to say, the technological advancement in this area has been quite impressive, but it might just be that beneath the surface things might be slowing down for the two major players in the space, Archer Aviation (Archer), and Joby Aviation (Joby). Here are some thoughts that we have on the matter:

  • Early private sector investments in the segment were heavy. However, it seems as if the pace of private sector investment might be slowing down.
  • The highest level of development of the technology was during the time of low interest rates, high venture capital activities, and a so-called “strong economy“. These conditions are changing.
  • With Archer and Joby seeking government and military contracts, this might be a sign that private sector investment alone might not be enough to drive developments at the pace it was over the past two years.

Get Involved: Do you believe that air taxi is a viable technology for the real world, and will stand the test of time? Why or why not? Please share your thoughts in the comments below.

The pace of private sector investments in the air taxi segment might be slowing down.

  • There are many reasons why the pace of private sector investment could be slowing down within this segment, some of which are discussed further, in this article.
  • What is important to note at this point is that the pace of investment is directly affecting the pace of development of the technology. Therefore, there needs to be a way for the key players within the industry to maintain the pace of development moving forward.
  • Another thing to note is that these companies are not only building technologies, they are building businesses around these technologies, and the business must make sense as well. In the end. Funding is important for the viability of these businesses moving forward.

On Aviation™ Note: It is very normal for the initial spurt of development and adoption of technology to be greater in the earlier stages than the later stages. However, this generally happens well into the technological lifecycle. What we’re seeing here is a slight slowdown that could be indicative of other underlying challenges.

The greatest push for the adoption of the air taxi technology was during the time of high venture capital activities, low interest rates, and a “strong economy”

  • With interest rates low and the money supply high during the past five years, it is understandable that capital would’ve been readily available to start the development of the air taxi technologies to take it to the present-day level of development.
  • Undoubtedly, the reader will notice our quotations around the phrase, “strong economy”. This is because we do not believe that the economy of the past five years was strong, only the appearance of such. That being said, this piece is not about that and we wish to get back to air taxis and their advancement.
  • Here’s what we do know: With higher interest rates, and investors having the ability to take less risk to make a return on their investment, investors are less willing to take on a higher amount of risk at present in unproven technologies and businesses. No doubt these companies are publicly traded, and therefore the public can always invest in these companies. Would like to make it very clear that publicly traded stocks don’t necessarily equate to capital for the underlying company that owns the stocks.
  • What we are seeing is a slowing down of available capital from the private sector to these ventures. Given current conditions and forecasts We expect this to continue into the short to medium term.

On Aviation™ Note: If it is indeed the case that capital is drying up from the private sector for Joby and Archer, they would not be the only ones this is currently happening to. In fact, given current conditions, this is quite expected.

So why are Joby and Archer currently seeking government and military contracts?

  • The answer to that question can be found in the previous section. As the pace of investments slows these companies must find ways to continue the development forward as they advance their technologies and continue to keep their businesses as going concerns.
  • One way to do this is through government contracting. It is known to many that government contracts can be lucrative sources of revenue for companies. Particularly those that are currently struggling to raise private sector capital.
  • As these companies acquire government contracts, they have the ability to not only ensure the survival of their business into the future, but also be in environments where technological advancements — such as militaries — are highly appreciated, and bodes well for these companies’ desire for advancing their technologies.

On Aviation™ Note: The caution here with the aforementioned approach, is that companies can become captive to these contracts, and find it difficult to get back to the private sector development trajectory they were on.


The challenges being faced by the companies developing air taxi technologies are quite normal at this stage. Even more so given the current economic challenges that we are facing and those that are to come. The actions being taken by these companies are the sort of actions that are to be undertaken by leaders of these businesses to ensure that they are protected, given what is to come. Whatever your views on government contractors, the fact is that these companies must survive in order to offer this technology to the world, and they are preparing themselves to do so.

Thank you for reading this week’s On Aviation™ full article. Do you believe that air taxi is a viable technology for the real world, and will stand the test of time? Why or why not? Please share your thoughts in the comments below. Remember to check out our On Aviation™ Podcast and continue the conversation on our Twitter and Instagram.

Orlando — On Aviation™



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