Singapore markets open in 5 hours 3 minutes
  • Straits Times Index

    3,130.24
    +15.16 (+0.49%)
     
  • S&P 500

    3,585.62
    -54.85 (-1.51%)
     
  • Dow

    28,725.51
    -500.09 (-1.71%)
     
  • Nasdaq

    10,575.62
    -161.88 (-1.51%)
     
  • BTC-USD

    19,279.48
    -4.19 (-0.02%)
     
  • CMC Crypto 200

    443.49
    +0.06 (+0.01%)
     
  • FTSE 100

    6,893.81
    +12.22 (+0.18%)
     
  • Gold

    1,668.30
    -3.70 (-0.22%)
     
  • Crude Oil

    79.74
    +0.25 (+0.31%)
     
  • 10-Yr Bond

    3.8040
    +0.0570 (+1.52%)
     
  • Nikkei

    25,937.21
    -484.89 (-1.84%)
     
  • Hang Seng

    17,222.83
    +56.93 (+0.33%)
     
  • FTSE Bursa Malaysia

    1,394.63
    -2.87 (-0.21%)
     
  • Jakarta Composite Index

    7,040.80
    +4.60 (+0.07%)
     
  • PSE Index

    5,741.07
    -193.18 (-3.26%)
     

Urban air mobility ‘is something that we see on the horizon,’ Former United Airlines CEO says

Former United Airlines CEO Oscar Munoz joins Yahoo Finance Live to discuss the outlook for electric vertical takeoff and landing (eVTOL) aircraft and how the industry could revolutionize air travel as startup Archer completes its first hover flight.

Video transcript

[MUSIC PLAYING]

BRIAN SOZZI: Archer appears to be taking flight. The upstart electric helicopter company just successfully completed a key test flight of its aircraft this past weekend. The company will continue to fine-tune its design as it works toward operating a ride-sharing network for air travel.

Archer board member and former United Airlines CEO Oscar Munoz joins us now for a chat on the company and the state of the airline industry. Oscar, always nice to see you. Thank you for taking some time. You are indeed a busy guy in this semi-retirement of yours. So take us through Archer a little bit here. When-- when will this ride-sharing service launch? And how big will it be at launch?

OSCAR MUNOZ: So first and foremost, I think it's an important distinction to recognize that the term eVTOL, you know, Electric Vertical Takeoff and Landing Airplane, it-- it is not a helicopter. And in-- in the world of flight, that is a very, very large and significant distinction. So it is-- it is an airplane. Plain and simple, urban air mobility, to your question, is something that we see on the horizon. Think-- think ride-sharing in the sky. For those of us old enough to remember "The Jetsons" cartoons, sort of that concept. A really revolutionary, disruptive way to democratize air travel is the sort of foundation of what I'm involved with.

With regards to the timing of all of this, obviously we have a very aggressive timeline. We have to build the aircraft, we have to test it. The G-1 certification that we got a few months ago was a-- a design aspect, the test, on the same day, anniversary of the Wright brothers, which is interesting.

Then we got it for hover over the course of the next year and a half or so. The increased level of flight testing expansion, envelope expansion, will continue. And so the actual go-to-market strategies and all of that activity, you will hear much more from the company and its leaders over time. Probably premature for me to discuss the concept. But I think we've publicly said that, by 2024, we should see huge evidence of it in the air. Lots of things to be done beforehand, of course-- infrastructure, building, et cetera, et cetera.

BRIAN SOZZI: Oscar, let the record show, when I called it a helicopter company, I knew-- I knew you were going to call me on it. But you know, as a board member of Archer, what are you pushing the management team to think of?

OSCAR MUNOZ: Interesting, you know, it's-- and it's a significant difference from established legacy companies, in which I've had a lot of history in-- I mean, the concept of a startup is there's this entrepreneurial energy, focus, and commitment on short-term goals like getting this-- this prototype to hover. It's a driven mentality with such incredible resources. Our recruitment, some of the best in the business with regards to all the different technology, batteries, et cetera, that are coming to Archer from all the different other companies. So it's great to see that.

So "pushing" them is probably a term that I don't-- I wouldn't really use and don't really use with startups because they have all the energy, and commitment, and focus. And it's rebuilding, and everything is sort of greenfield. So that's exciting.

I think the area that folks like me bring is the expertise and-- and understanding and awareness of how public companies work. Brian, you used to be a sales-side person. You know how that market works, how those communications have to have, investor relations, all your different investors, transparency, governance, bleh, all that sort of somewhat boring stuff. But as a public company, it's something that you have to do. So we're getting that-- that side sort of worked. And I think that's the role of the board.

But also, again, it's to test the marketing campaigns, the branding, the mechanism, the story behind it. And so I-- I wouldn't call it pushing. Brad and Adam are incredible. They've-- they've done this, things they started before. You had Stan from Vivid. I mean, the energy is-- is just wonderful. So I don't consider my job as a pusher in this regard, as a participator and assist when I can.

JULIE HYMAN: Hey, Oscar, it's Julie here. You know, there are a bunch-- there are a handful of companies who are working on this eVTOL technology, including-- I don't know if I'm saying it right. "Ee-vee-tall," is that how you refer to it?

OSCAR MUNOZ: Yeah, eVTOL. No, no, we're all learning new terms. [LAUGHS]

BRIAN SOZZI: Great. Electric vertical takeoff and landing. So there are a handful of companies doing this, both startups and established aircraft companies. Do you see the future much like the airline industry, where there are a number of different players? Or do you think it is going to be a sort of winner-take-all kind of situation?

OSCAR MUNOZ: You know, if history proves it-- so it's a great question. You know, who knows. I just can't imagine, in today's world, that any one organization or company is going to, you know, sort of, in essence, take over the entire market. I-- I think the freedom of choice, the-- gosh, the creative nature of evolution, of innovation, is something that people always-- I mean, you think of cars, right? How many car brands do we have?

So I think we are supportive of-- of the space, first and foremost, the safe and quality nature of the flight, all of the supporting infrastructure, from FAA, airspace, infrastructure on the ground. All of that has to be built out. I think that generally works better if it fills the needs of many companies, not just one.

But having said that, at least from United's perspective, in making the decision to not only partner, to take the large contract, to make an investment in this company, was founded on the fact that, as we looked around to the various companies, from the leadership team, to its focus, to its mission and plan to actually commercialize and put this product in the market sooner rather than later with tangible-- as you've heard me talk, many times, about this concept of "proof, not a promise," I think what we saw in Archer and I continue to see to this day is that focus. And this hover test that we just had last week was a perfect example. And six months, from concept and design to in the air and moving forward, is the exciting proposition. Plus they share the same viewpoint about customers and consumers. And that's how the brands will co-exist going forward with United and Archer.

BRIAN SOZZI: And Oscar, on-- on Archer, how does Archer and even some of its competitors, how will that change the travel industry and the overall travel experience?

OSCAR MUNOZ: You know, it'll be interesting to see. So the concept, as you know, is-- at least in my old world at United, I always say this. The problem-- one of the problems that we had in that industry is, because of the trials and tribulations and stress of travel writ large, meaning when you leave your home, when you get in your vehicle, or you get on a ride-sharing service or car service, and you drive to the airport in traffic, try to find a park, try to-- by the time you actually meet one of my wonderful United family members on an aircraft, you could be pretty pissed off by that time. So the stress of the day has already gotten up to you.

So the concept, you know-- you know, the journey we've been all on is this constant personalization. Well, this is a perfect addition. So when you talk about how this is going to change and disrupt, I mean, think of the ability to not have to worry-- I mean, the flight times from-- from you know, Manhattan to-- to JFK or one of the local airports is under 10 minutes. I grew up in LA. I live in Chicago now. I mean, it's-- I-- when I go-- when I travel from Chicago to different places, you know, we don't know how long it's going to take to get to the airport. So that adds to the stress.

Having a nice, repeatable, consistent level of service under 10 minutes, for the cost for the cost of a ride-sharing vehicle, that is truly the amazing part. I mean, not only is it efficient, productive, it's democratic in the sense that it allows for different people, it's safe, and it's environmentally-friendly. So that's a nice mixture.

So all of those concepts will, I think, help transform and connect communities, cities, airports, how we travel. Some of our marketing campaigns are about not just getting to the airport, but you know, in large cities, you want to go-- you want to go out, you know, just go to the mountains or go-- well, the concept of-- of leisure travel, having day trips where you can go to a place that you would normally not go, for a day, and back. And so that concept of opening up that whole hospitality, travel, freedom to travel, and in a democratized way that's affordable to everyone, I think those are all the combinations that will serve to either be disruptive-- which sounds negative-- or productive and value-oriented for our lives in general.

JULIE HYMAN: I don't know, Oscar. I'm ready for teleportation. Skip all this other stuff. I guess, in the meantime, this could work. I want to ask you--

OSCAR MUNOZ: I've always said it's like, until we get this beam-me-up thing that we also watch, along with "The Jetsons," we got to do what's best. And this is the next evolution and giant step in that for sure.

JULIE HYMAN: Yeah, you got to take baby steps there on the way to "beam me up, Scotty," I suppose. Oscar, you talked about the stress of travel. Obviously that is something that is very real for everyone. And it's especially real right now amidst the pandemic. I'm sure you're aware of the hearing that was on Capitol Hill where a number of your former peers in the industry were sort of grilled about the measures that they have taken about COVID-19.

Maybe you're glad that you're not having to deal with that at this point. But you know, how do you think the industry has been dealing with it? Obviously there's been a spectrum here. But do you think, for example, your company has been taking some of the right steps? And do you think some of the others have?

OSCAR MUNOZ: I think-- let me start with this is an industry where no good deed goes unpunished. There's just so many different viewpoints, political, philosophical, and otherwise, that it's hard to sort of measure everything. At United, which is all I can speak of, in the conversations that I've been involved in with my successor and all those folks, the concept has always been-- always been about human safety.

And when you-- when you develop a principle that's that paramount, that's what drives the conversations and decisions around that. So everything that we've done at United is about safety. And invariably, you're going to have lots of negativity, lots of people pressing in different ways. But if your mission is true and heartfelt and genuine, I think that makes sense. So it's all been about safety. And we've been leading in that regard.

How the rest of the industry is working, and if it's not, they're dealing with their own issues inside their own companies, inside their own geographies, politically, for instance. But at the end of the day, one of the premises that we've always had in our industry and generally have kept by it is that, of all things we compete on-- and we compete on everything-- the one thing we should never, ever, ever compete on is the concept of safety. You, as a consumer, should not be flying one because you think it's safer than the other. I just think that's ridiculous. And we're all the same aircraft. And so we try to do this in this way. So I am supportive of the industry.

They did get grilled on many issues. They had the little fallout about masks. I think it was sort of an offhand comment that nobody really caught on and such. You know, and in hindsight, and when you're watching, I immediately jump. It's like, no, no. Masks are important. And all those precautions are important in this-- this area of uncertainty. So I am supportive of certainly what we've done at United. And I think that, you know, the industry has-- has been aligned with that as well.

BRIAN SOZZI: Like always, you give us a lot to consider and think about. Archer board member and former United Airlines CEO Oscar Munoz. Good to see you. Happy holidays. And get some rest. You're a busy guy.