MUNICH – Lilium, a pioneering German company in the field of electric air taxis, has recently announced its most significant order to date. Saudi Arabia’s state-owned airline, Saudia Group, has committed to purchasing up to 100 of Lilium’s innovative all-electric flying shuttles.
This deal marks a substantial step forward for both companies, with significant implications for the future of air travel and sustainable transportation.
Summary
- Major Order: Lilium clinches a deal with Saudia Group for up to 100 eVTOL jets.
- Firm Commitment: The order includes 50 firm orders and an option for an additional 50.
- Deal Value: Total deal value, including options, is approximately $700 million.
- Delivery Timeline: First shuttles are expected to join Saudia’s fleet by 2026.
- Strategic Use: Saudia aims to utilize shuttles for transporting pilgrims and tourists.
- Industry Competition: Lilium faces competition in a crowded eVTOL market and relies on advance payments for development.
- Vision 2030: Saudia plans to triple annual passenger numbers to 300 million by 2030 as part of Vision 2030.
The Details of the Deal
The agreement includes a firm order for 50 of Lilium’s electric Vertical Take-Off and Landing (eVTOL) Jets, with an option to purchase an additional 50 units. The value of the entire order, including the options, is estimated at around $700 million, according to Lilium co-founder Daniel Wiegand.
The air shuttles, which can accommodate four to six passengers, are designed to replace traditional road trips and short flights currently handled by aircraft or helicopters. Saudia plans to integrate the first of these shuttles into its fleet by 2026, with the delivery of the initial 50 jets expected to be completed by 2029.
Strategic Significance for Saudia Group
For Saudia, the acquisition of Lilium’s eVTOL jets is part of a broader strategy to enhance its transportation capabilities and support Saudi Arabia’s ambitious Vision 2030 initiative. This program aims to diversify the kingdom’s economy away from oil dependence by investing in various sectors, including tourism.
The air shuttles will be used to transport pilgrims between Mecca and Jeddah and to ferry guests to major sporting events in Riyadh and popular tourist destinations across the country. This aligns with Saudia’s goal of tripling its annual passenger numbers to 300 million by the end of the decade.
Lilium’s Market Position and Challenges
Lilium is navigating a competitive landscape in the eVTOL market, which features numerous players striving to revolutionize urban air mobility. To complete the development of its flying taxi, Lilium requires advance payments from customers like Saudia.
As of now, Lilium has secured 106 firm orders, including the recent Saudia deal, and holds 76 additional options, alongside approximately 600 memorandums of understanding. Despite these promising numbers, the company faces delays in its development timeline.
Lilium recently announced that the first manned flight of its vertical take-off aircraft has been postponed to the beginning of next year due to delays in receiving testing equipment and other parts.
Industry Insights
The eVTOL market is rapidly evolving, driven by advancements in electric propulsion technology and increasing demand for efficient, sustainable transportation solutions. Companies like Lilium are at the forefront of this transformation, aiming to offer convenient, environmentally friendly alternatives to traditional ground and air transportation.
However, the industry faces several challenges, including regulatory hurdles, technological advancements, and the need for substantial investment to bring these innovative aircraft to market. The success of companies like Lilium will depend on their ability to navigate these obstacles and deliver on their promises of revolutionizing urban air mobility.
Significance of the Sales Agreement
The sales agreement between Lilium and Saudia Group, signed at Lilium’s headquarters near Munich, is notable for several reasons. The contract, which includes a schedule of deposit and pre-delivery payments, outlines the timeline for future deliveries and guarantees on aircraft performance.
It also includes provisions for spare parts, maintenance, and repairs, ensuring that Saudia receives comprehensive support for its new fleet.
Notably, this agreement follows a Memorandum of Understanding (MOU) signed in October 2022 and represents the largest firm order of eVTOL aircraft by an airline in the MENA region. This commitment underscores the confidence that Saudia has in Lilium’s technology and the potential of electric aviation.
Saudia’s Vision and Commitment
H.E. Engr. Ibrahim Al-Omar, Director General of Saudia Group, emphasized the significance of this agreement for the airline’s future. “Saudia Group is proud to pioneer the MENA region as the first company to acquire all-electric eVTOL jets, which reflects our commitment to continuously reducing our carbon footprint and becoming an industry leader in regional electric aviation,” he stated.
Al-Omar highlighted the advantages of eVTOL jets, including their vertical take-off and landing capabilities, which open up new routes and reduce travel times significantly. This technology is expected to revolutionize guest transportation, benefiting business travelers, tourists, and attendees of major events.
Enhancing Regional Connectivity
Through this initiative, Saudia aims to enhance connectivity by providing seamless first and last-leg connections into its regional hubs. The eVTOL jets will support Hajj and Umrah pilgrimages, offer faster access to key sports and entertainment events in Riyadh, and unlock new possibilities for exploring hard-to-reach tourist destinations across the Kingdom.
The jets are anticipated to increase flight frequencies and decrease traffic congestion, providing a fast and convenient alternative for reaching various destinations within Saudi Arabia.
Strategic Support for Certification
Before the commercial launch, Saudia Group will provide strategic support in Lilium’s certification process with the General Authority of Civil Aviation (GACA), Saudi Arabia’s aviation regulatory agency. This collaboration aims to ensure that the eVTOL jets meet all regulatory requirements and are ready for safe and efficient operation.
Groundbreaking Deal
Lilium’s groundbreaking deal with Saudia Group underscores the growing interest in electric air taxis and their potential to transform the future of transportation.
As Lilium continues to develop its eVTOL jets and overcome challenges, the partnership with Saudia represents a significant vote of confidence in the company’s vision and capabilities. With the backing of a major airline and the support of Saudi Arabia’s Vision 2030 initiative, Lilium is poised to play a crucial role in the next generation of sustainable air travel.
