Brazil's Azul Takes a $1 Billion Leap Onto Electric Aircraft Bandwagon

Brazil's Azul is the latest airline to jump on the electric aircraft trend, with deal announced today for up to 220 shorthaul aircraft from Germany's Lilium. The six-person aircraft are expected to go into service in Brazil in 2025.

In a notice to investors, Azul said the deal could be worth up to $1 billion, pending regulatory and commercial approvals for the new technologies. The aircraft would operate a separate domestic Brazilian network and would be co-branded by the two companies. "We know how to create and grow new markets, and once again we see huge market opportunity by bringing the Lilium Jet to Brazil,” David Neeleman, Azul chairman and founder, said in a statement announcing the deal.

Lilium's electric vertical take-off and landing (eVTOL) aircraft are different than the Archer eVTOLs that United and its regional partner Mesa ordered earlier this year and the Vertical Aerospace eVTOLs American and Virgin Atlantic ordered, although the last-mile missions for the two aircraft are similar. Lilium's aircraft is an electric jet that deploys 36 vectored-thrust ducted fans for propulsion. (The engines embedded in the wing function more like conventional jets, with a fan up front, than the more common rotary-wing lift used by drones. The engines can change their thrust direction to enable vertical flight, according to Lilium.)

Archer's prototype, on the other hand, uses a more conventional rotary-wing propulsion system, as do Vertical's and Wisk Aero's prototypes. The 19-seat Heart Aerospace electric regional aircraft that United and Mesa also plan to operate is similar to conventional turboprops.

Lilium's prototype, which it says could enter commercial service as early as 2024, is capable of carrying six passengers, a pilot, and luggage 155 miles at a cruising altitude of 10,000 feet and at speeds of 175 miles per hour. The current demonstrator is the fourth generation of Lilium's technology, and Lilium said it is in the process of securing regulatory approvals for its commercial prototype.

The potential in Brazil is huge. The country, as Gol CEO Paulo Kakinoff recently noted, is vast, with major population centers not served by a commercial airport. Surface transportation and roads are not viable options for long-distance travel. An eVTOL "air taxi" could connect smaller cities to the national air transport system and provide last-mile connections to cities too small to fill one of Azul's mainline jets.

But the crucial hurdle for Lilium — as well as Archer, Wisk, and Heart — is that no aviation regulator has thus far approved electric propulsion for commercial use. Although Canada's Harbour Air is testing battery-powered seaplanes, and U.S. regional carrier Cape Air is said to be considering an electric aircraft, the eVTOLs still are years away from approval, making an entry-into-service date in this decade highly ambitious. And Lilium's aircraft is the first jet-powered eVTOL. By comparison, regulatory approval for the conventionally powered Boeing 787 took more than two years from its first flight. Boeing launched the 787 program in 2004, and regulators didn't certify it until 2011.

Azul, like the other airlines that have ordered eVTOLs, stressed the environmental and sustainability gains from branching into eVTOLs. And while the technologies to offer significant environmental benefits over aircraft powered by jet fuel, the main benefit to airlines in the short term may be in public relations. Each airline that has announced an order for eVTOLs has earned hundreds of news stories about their deals.

Others in the industry are more skeptical. Leasing behemoth AerCap, which will inherit a helicopter-leasing portfolio when its $30 billion acquisition of GECAS closes this year, dismissed adding eVTOLs to its fleet but noted that electric propulsion is the future of aviation. “Electric vehicles are coming,” AerCap CEO Aengus Kelly said last week. “I think that’s a given.”

“At best, at the moment, it’s coffees and prescriptions that are being delivered on local drones,” he added, saying that it will be many years before large electric aircraft are approved for passenger transport.