The Covid-19 pandemic has been awful. But it hasn’t been all bad. One of the silver linings? Less traffic.
I live in La Jolla, a suburb about 10 miles north of San Diego. It used to take me an hour on Friday afternoons to drive into downtown. Last Friday afternoon, I made the trip in 10 minutes.
Prior to the pandemic, urban traffic was a huge problem everywhere. Employees in cities from Los Angeles to Chicago to New York were spending more than 30 minutes per day in traffic – with that number often pushing north of an hour on “bad days.”
Covid-19 has provided relief to this traffic problem. But such relief is temporary. Some workers won’t return to the office. Most will. Restaurants will re-open, too. As will retail stores and entertainment venues.
Add it all up, and come 2021/22, the world will once again be burdened with an intense and escalating traffic problem.
Look up. Perhaps obviously, there’s a lot of space up there, and not many objects. So, over the past few years, about 200 companies – including the likes of Boeing and Airbus – have spent billions of dollars on creating a new category of transportation called “Urban Air Mobility.”
The idea of Urban Air Mobility is simple. Create a bunch of aviation vehicles that can get people and goods from point A to point B as quickly as flying, but at a much lower cost and with much less hassle.
That idea has yet to morph into a disruptive reality, because the current generation of aviation vehicles – mostly helicopters – are quite expensive, noisy, and fuel-inefficient.
But that’s all about to change.
Multiple breakthrough technological advancements are converging right now to give birth to a new generation of aviation vehicles called electric vertical takeoff and landing (eVOTL) aircraft.
These aircraft look like “flying cars,” and they’re basically electric helicopters without any of the noise and with significantly lower manufacturing costs. Therefore, at scale, eVOTL aircraft can provide cost-effective, quiet, and fuel-efficient air transport to the masses.
Sound like a pipeline dream?
It’s not. Boeing has an eVOTL aircraft. Airbus has one. Startups Lilium, Joby Aviation, Bell, and Volocopter all have their own models, too.
The next generation of aircraft has arrived. It will take years for these new aircraft to become widely adopted. But, over time, they will collectively usher in a new era of Urban Air Mobility, wherein our cities will be filled with eVOTL aircraft ushering people and goods all over the place.
That future starts now…
Today, we will tell you how to invest in the ground-floor of this emerging Urban Air Mobility megatrend. It’s by buying a small aviation technology company that is morphing into the “Uber of the Skies.”
From Flying Rich People to Work, to Flying Everyone Everywhere
Amid the Covid-19 pandemic, there has been an exodus of business executives and their families from their New York apartments to their more spacious homes in the Hamptons.
Such executives have been returning to the office over the past the few months. But they aren’t driving (it’s a two-hour drive). Instead, they’re taking helicopters back and forth through an “air sharing” platform called Blade.
Blade is a $900 million urban air mobility company that is going public through a merger with Experience Investment Corp. (NASDAQ:EXPC).
The company offers helicopter rides to often rich clients in major urban areas like Los Angeles and New York. The company’s business model is very similar to Uber. Blade doesn’t own the choppers or salary the pilots – they pay for both on an hourly usage basis, and simply act as a technology logistics company that pairs private air travel demand with supply through a consumer-facing app.
Also, much like Uber in ride-sharing, Blade is the unparalleled leader in urban air mobility services, with a vast network of private terminals (that management calls “lounges”) which spans across the country and a passenger base that has swelled from about 1,000 passengers in 2014, to over 37,000 last year.
For all intents and purposes, then, Blade is basically the “Uber of the Skies.”
That’s a big deal.
In the near-term, it means Blade will turn into a trendy but niche air mobility service for the rich. The company has spent that last six years building a scalable platform with a vast network of terminals. Over the next few years, Blade will leverage that unmatched infrastructure to increasingly shuttle the rich to and from work, off to vacations, and on leisure chopper trips.
Admittedly, that’s not a huge market. But it’s not small, either. After all, over 5% of Americans are millionaires. Between the Northeast and West Coast alone, Blade sees its serviceable addressable market from these services alone being just under $10 billion.
But that’s just the tip of the iceberg…
Long-term, Blade sees its opportunity as turning into the technology logistics backbone for eVOTL aircraft. In essence, eVOTL aircraft – in making flying clean, cheap, and quiet – should turn urban air mobility from a niche industry today, to a globally ubiquitous transport market tomorrow.
Blade is optimally positioned to turn into the Uber for that market.
No one really knows how big that market can or will be – but many industry analysts see Urban Air Mobility turning into a $500+ BILLION market.
If Blade does indeed turn into the Uber for that $500+ billion industry, then this is a $10+ billion company in the making.
So… with a market cap of just $900 million today… Blade stock deserves your attention right now as an interesting “moonshot” play on the Urban Air Mobility megatrend.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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