Hospitality NewsSilicon Valley’s New Arms Race

Silicon Valley’s New Arms Race

“Every other industry has innovated. We’ve just added baggage fees.” 

Archer Aviation CEO and founder Adam Goldstein was complaining to me in the middle of a swanky lounge at Casa Cipriani, with a view of the Downtown Manhattan Heliport just blocks away. 

Goldstein is looking to launch eVTOLs, short for electric vertical takeoff and landing, in the U.S. within the next couple years, with the hopes of turning the company into the Uber of the skies and eventually replacing helicopters. The company recently announced that it is building an air taxi network in the New York area as part of a partnership with United Airlines, a major investor in the company. 

He is also one of the many founders and executives of startups I spoke to who are looking to drastically alter the aviation landscape, one that is notorious for its lack of innovation. “We still are flying a tube and wing that was designed in the Cold War,” Goldstein told me. 

It’s a longtime gripe for those in Silicon Valley. Peter Thiel, the high-profile venture capitalist and founder of PayPal, famously called out the industry in what became the slogan for his venture capital fund Founders Fund. “We wanted flying cars, but instead we got 140 characters,” Thiel wrote. 

But now that might be changing. 

Investors are pouring billions into eVTOLs and customers are placing orders. Supersonic jets, which promise to fly passengers from New York to London in just three hours, are also looking to make a comeback. 

In January, Boom Supersonic experienced a major milestone when its civilian jet, the XB-1, broke the sound barrier during a test flight at the Mojave desert. 

Blake Scholl, the CEO of Boom Supersonic, shared similar concerns as Goldstein. 

“I think it’s the natural progression that technology and air travel should get faster and better,” Scholl said. “And we lost our way. And it’s a great tragedy. It’s almost a murder mystery.” 

But amid this burst of innovation, concerns about the National Airspace System, outdated equipment, and an acute air traffic controller shortage stand out as risks to continued progress. A plane crash near Washington, D.C. in January heightened those concerns.

“We have an air travel traffic system that’s got more and more traffic in it, where we haven’t kept up with technology, we haven’t kept up with controllers,” Scholl said. “I think everyone sees that we have a problem.”

Archer announced plans for an air taxi network in the New York area, through its partnership with United Airlines. Archer Aviation

Billions in Funding

These startups have raised billions of dollars in funding. In 2024, Archer raised $660 million, and its investors include some high-profile companies like United Airlines, Stellantis, Wellington Management, and Abu Dhabi’s investment holding company, 2PointZero, a subsidiary of the UAE’s largest public company, IHC. 

In total, flying taxi companies raised a whopping $1.8 billion in 2024. 

Goldstein said Archer has now raised a total of more than $3 billion in capital from investors, and has orders for eVTOLs from United, Southwest Airlines Japan Airlines, Ethiopian Airlines, and IndiGo. 

Joby Aviation, another major eVTOL company, inked a $500 million deal with Toyota last year, making it the largest funding round for a flying taxi startup in years. In 2022, Delta Air Lines signed an agreement with Joby to order 250 aircraft worth $1 billion. The Atlanta-based carrier also invested $60 million for a 2% equity stake in Joby. 

Boom has raised $700 million in funding and its investors include Saudi Arabia’s NEOM Investment Fund and has a partnership with the U.S. Air Force. United and American Airlines have also placed orders for supersonic jets. 

United chief financial officer Michael Leskinen previously told The Washington Post that the carrier plans to use supersonic jets out of its hub in Newark Liberty International Airport for flights to London by the end of the decade. These flights would cost passengers anywhere from $5,000 to $10,000. 

Deep Skepticism

Despite the billions of dollars these companies have raised, they have also faced deep skepticism from politicians and travelers. 

In Paris, local politicians were heavily opposed to launching eVTOL services for the Olympics, saying that the services were harmful to the environment and only meant for wealthy attendees. Volocopter, the company that was trying to provide these services, failed to obtain certification in time for the Games. 

The Air Line Pilots Association said in its industry magazine in 2023 that it was concerned that flying taxis could eventually become remotely piloted or capable of autonomous flight. 

“Recent advances in automation and other new technologies have led some airline industry groups to consider the possibility of reducing the number of crewmembers on the flight deck, entertaining the idea of single-pilot or even remote-pilot operations,” said ALPA President Captain Jason Ambrosi. “We believe these ideas ignore the important role that pilots physically present on the flight deck serve in the safe operation of their aircraft.”

(Neither executives at Archer and Joby said that they would aim for autonomous flights in the near future.) 

A report for the Royal Aeronautical Society said that investors may be putting too much faith in some of these companies and their ability to pass regulatory hurdles quickly. The report pointed to the startups’ lack of experience in designing and certifying new aircraft, along with the massive infrastructure investments needed to make flying taxis widespread. 

“There is probably a day of reckoning coming,” the report read. 

Dozens of Reddit posts debate the merits of eVTOLs and supersonic flight. Some feel flying taxis will be too expensive for most travelers or that the technology isn’t reliable. Industry blogs have declared that it will take years for flying taxis to become a reality. 

Some of that skepticism might be warranted, especially given the boom-and-bust nature of startups in this field.  Two flying taxi startups in Europe, Lilium and Volocopter, both filed for bankruptcy after facing difficulties with securing more funding. It was the second time Lilium had filed for bankruptcy. 

As for supersonic flight, it has a precedent. British Airways and Air France operated transatlantic flights on the Concorde, a supersonic jet, from 1976 to 2003, until it was phased out due to safety concerns, high operating costs, and low demand. 

The FAA had placed a ban on flying aircraft faster than the speed of sound over the U.S. in 1973. That ban was partially influenced by public opinion surveys that cited concerns that supersonic jets were too noisy and could cause damage to nearby property, according to NASA, which is also working on developing supersonic aircraft. 

But each founder and executive of these startups I spoke to often compared the skepticism to the introduction of new technologies in the past, such as the cell phone or electric cars. 

Eric Allison, Joby’s chief commercial officer, said he believed the best way to prove skeptics wrong was to demonstrate the product.

“That’s why we fly every day, we’ve done 1,000s of 1,000s of test flights, 10s of 1,000s of hours of flying at this point,” he said. “In terms of the learnings that we’re building, we’ve got over 2,000 people at Joby working hard at this, almost everyone working towards certification,” Allison said, referring to the certification process the company is working on with the Federal Aviation Administration. 

Scholl said the technology for supersonic flight had improved significantly since the days of the Concorde. 

“Look at what we’ve accomplished,” Scholl said. “You know, people said a startup couldn’t build a supersonic jet, but we did. People said that it could never be done with a small team and a small budget. Yet it was.”

A Spate of Regulatory Hurdles

Probably the most practical obstacle in the way of a future with flying taxis and supersonic planes are regulations. 

The FAA said in a statement to Hospitality career profile that supersonic jets were still prohibited from operating over land in the U.S. Testing supersonic aircraft requires a special flight authorization. 

“It’s one of the dumbest regulations ever made that literally says ‘Thou shalt not go supersonic over the U.S.’ And what it should have said is ‘Thou shalt not make bad sonic booms,’” Scholl said.

Scholl said his company has developed a “transparent, open, collaborative relationship” with the regulator. 

“We’ve said let’s work directly with our regulator, let’s be super transparent,” he said. “And we expect a lot of scrutiny, we welcome the scrutiny, we think it’s going to make a better airplane.”

Flying taxis are a different story. Despite some of the doubts about the viability of these aircraft, Archer and Joby say they are on their way to achieving certification by the FAA. In a statement to Hospitality career profile, the FAA also shared detailed plans of the certification process for flying taxis, which include multiple rules issued for the aircraft, integration, pilots and operations. 

Both companies are already slated to operate flying taxis in the UAE in 2026. 

Allison said Joby was currently in the process of writing test flight plans for every single component of the plane, waiting for FAA approval for each part.

The Joby executive added that the agency’s attitude toward eVTOLs has changed significantly. 

“I was one of the first people to go talk to the FAA —  from a different company — with a video of one of these eVTOLs and kind of got the nice pat on the head, you know, like, ‘That’s great kids come back when you’re ready to talk for real.’”

However, there are still some concerns about how these technologies will be safely integrated into national airspace. Aging equipment and an acute air traffic controller shortage has received significant media attention following a systemwide outage in 2023 and several safety incidents. 

One aviation trade group executive told Hospitality career profile that flying taxis will operate within lower altitudes than commercial aircraft and not interact with air traffic controllers. The executive added that they expected flying taxis to mostly use the already existing infrastructure and routes in the airspace. 

The FAA says in its integration plan that it seeks to integrate “[advanced air mobility] operations with OEMs and/or operators flying between multiple origins and destinations at one or more locations in the U.S. by 2028.” 

The plan, called “I28” says that flying taxis would operate mostly in “Class B airspace,” which is the airspace that surrounds some of the busiest airports in the country. The guide adds that these aircraft will also fly in “Class C airspace,” referring to airspace of mid-size airports. As a result, some air traffic control clearance is required. 

“I think the one thing we do in the U.S. very well is we’re able to integrate those new entrants in a way where there’s collaboration among all users and we figure out tools and processes to allow for that integration to the point where it does become more seamless,” the trade group executive said. 

Joby also co-authored a report with NASA where they recreated an air traffic control system in the Dallas-Fort Worth metroplex area to test the capacity of the airspace in the area. 

“Over the course of a few days, we did a bunch of these scenario simulations and showed that there’s actually quite a lot of capacity just working within the existing system in a streamlined way for eVTOLs to integrate into class B airspaces and do it entirely safely within the existing system and the existing traffic that exists,” Allison said. 

Another trade group executive pointed to the integration of commercial space operations into U.S. airspace.

“In a matter of just four years, we have scaled this flight restrictions way down,” the official said.  “We have a number of new tools that allow us to see the trajectory of those commercial space launches and recoveries. We have windows of two hours or less where airspace is restricted. So in a really short time, our system has adapted remarkably.”

Is This Realistic?

When hearing founders and executives of these startups speak about the product, it can be hard to tell whether some of the talk is just bluster. Or maybe in the next two years or so, I will be able to book a flying taxi from Manhattan to JFK for the price of an Uber Black. 

But industry officials for the most part have largely supported many of these initiatives. 

“I’d just say there were loud voices that doubted that the Wright brothers could do it,” one of the executives said. “And I think I’m glad that there are innovators who are chasing this engine and dream.”

Every startup I spoke to said that the technology for flying taxis and supersonic jets is there, it’s just a matter of completing the regulatory process and then selling the product to the public. 

At least for flying taxis, a model already exists for the business. Blade, an urban air mobility company, already provides helicopter services to airports in the major metropolitan areas in the U.S. The company also operates short routes, such as New York City to the Hamptons and Nice to Monaco in Europe. 

Rob Wiesenthal, the CEO of Blade, said the company is also hoping to eventually transition to flying taxis because they aren’t noisy and there is already existing infrastructure to support them. 

“For us, it’s just an asset swap,” Wiesenthal said. 

Scholl was hopeful that the FAA would change its stance on supersonic flight, pointing to remarks from recently-confirmed science and policy director Michael Kratsios, who said the Trump administration should review the rules on such aircraft in his first public remarks in April. 

Unlike the Concorde, Scholl added that there has since been innovations in turbofan engines, carbon fiber composites and fly-by-wire flight controls, which could make for an improved supersonic aircraft. 

“The amazing thing is we don’t have to invent anything to do that,” he said. “What we’re doing is putting it together for the first time in a practical, economical supersonic jet.”

Boom Supersonic plans to offer commercial aircraft with all business class seating, which Scholl believes will have strong demand, given the high appetite among travelers from premium seating. 

Allison said the electric batteries needed for flying taxis have improved significantly in the past 20 years, making the technology possible now. 

“Twenty years ago, it was physically impossible. You just couldn’t do it,” Allison said. “It’s now not impossible at this point.”

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