Flying Taxis Set to Become Reality: 3 Stocks to Watch Out
Air mobility over short distances is inching closer to reality, thanks to faster advancement in autonomous flight and battery technologies. The development in this space could completely restructure public and private transportation, as major technology and auto giants work toward offering an energy-efficient transportation system that isn’t limited to the roads.
Air Taxis: Prospects and Potential
The concept of flying taxis may have been around for the past few years, but the making them a reality looks highly possible in the near future. A major reason for this initiative is the need for conserving time and energy. After all, high traffic in the road only takes up more time, which can be lessened with air travel. Second, high fuel usage would be diminished as well, since air taxis would run on electricity.
While urban mobility is restricted to land-driven vehicles for now, the promising market of flying taxis holds potential. Electric flying taxis could not only drastically decrease operating and maintenance costs but also cover greater distances at a much shorter time.
Advancement in autonomous flight technology, better battery technologies and significant investment by major players such as Toyota Motor Corporation TM, Uber Technologies, Inc. UBER, Hyundai, Airbus and The Boeing Company BA are instrumental in making air taxis a reality.
It is this potential for air taxis that has investors flocking to the domain. Recently, Baillie Gifford, Tesla’s TSLA top external investor, invested $35 million in Munich-headquartered Lilium, a designer of electric aircraft that is trying to make its mark in the flying taxi space. The company completed the first phase of testing its Lilium Jet prototype in October 2019.
The air taxi market’s growth is speculated to be tremendous based on the above factors. According to a report by Frost & Sullivan, air taxi operations are set to begin in the Middle East in 2022 and witness a compounded annual growth rate of 45.9% to hit 430,000 units in operation worldwide by 2040.
This is why it is prudent for investors interested in the air taxi space to track stocks with rather impressive operations in the same.
These Stocks Are Making Flying Taxis a Reality: Here’s How
Diving deeper into the flying taxi market, we find that Uber Technologies, Boeing and Garmin Ltd. GRMN are some of the key players. All of these stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Uber is set to test its flying vehicles in Dallas, Los Angeles and Melbourne by the end of 2020. The company’s Uber Elevate wants to start demonstration flights this year. The company partnered with South Korean automaker Hyundai earlier this year in a bid to manufacture air taxis. Uber has also signed two Space Act Agreements with NASA to investigate the possibility of managing urban air traffic efficiently.
Uber is already offering helicopter trips between the JFK airport and Manhattan. The trip shortens the hour-long journey by car to a bare eight minutes and costs about $200 per person.
Uber Technologies’ expected earnings growth rate for the next quarter is 7.4%. Shares of the company, which belongs to the Zacks Internet - Services industry, have gained 17.2% over the past one month compared to the industry’s gain of 4.5%.
Boeing tested its autonomous flying taxi last year. This is a prototype that can fly up to 50 miles in an hour. The company’s NeXt division, the aerospace giant’s subsidiary that is developing autonomous air taxis, is testing out urban area air mobility.
Boeing’s expected earnings growth rate for current year is 45.5%. Shares of the company, which belongs to the Zacks Aerospace - Defense industry, have gained 78.8% over the past one month compared to the industry’s gain of 21.4%.
Garmin has been eyeing the air taxi space for quite some time, and is slowly developing technologies to make it there.
In 2018, Garmin collaborated with aerospace manufacturer Bell, a subsidiary of Textron Inc. TXT to design, develop and manufacture avionics hardware and software for an air taxi under development by a Bell and Uber collaboration. Garmin looks into aspects such as navigation, communication, flight guidance and flight management systems for the project.
Garmin is currently working with Bye Aerospace and regulatory officials such as the Federal Aviation Administration and European Union Aviation Safety Agency to see how its G3X Touch avionics displays information to the pilot. Bye Aerospace is working with Garmin to adapt the company’s G3X Touch avionics suite for use with its all-electric aircraft eFlyer 2.
Garmin’s expected earnings growth rate for next year is 31.6%. Shares of the company, which belongs to the Zacks Electronics - Miscellaneous Products industry, have gained 17.7% over the past three months compared to the industry’s gain of 3.5%.
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