With rising population levels and accelerated activities crowding major metropolitan areas, the concept of air transportation services ranks as a popular topic among well-heeled commuters, thus boding well for Blade Air Mobility (NASDAQ:BLDE). Specializing in electric vertical take-off and landing (eVTOL) aircraft, Blade completed a historic test flight with Beta Technologies, an electric aerospace company. In response, BLDE stock popped double digits, up 14% in late-afternoon trading.
Specifically, Blade’s press release revealed that it completed a test flight of Beta’s ALIA-250 electric vertical aircraft (EVA) at the Westchester County Airport in White Plains, New York. Per the report, “The flight marks the first test of a piloted EVA in the greater New York City area.” As well, the flight represents a milestone for the partnership to deliver safe, quiet and sustainable air transportation to customers.
“This is a historic moment for Blade, New York and the urban air mobility industry,” said Blade CEO Rob Wiesenthal. “This demonstration is a big milestone in our transition from helicopters to electric vertical aircraft, and we are pleased that our partners at BETA have designed the right aircraft with the requisite range, capacity, and noise profile, for use in our key markets, including our homebase of New York City.”
Kyle Clark, Beta’s Founder and CEO added “Blade is flying passengers in key urban markets all over the world, and this flight is another step toward delivering our electric aircraft to support those operations.” In addition to its aerospace specialty, Beta supports charging infrastructures for eVTOL aircraft.
Positive Implications for BLDE Stock
Fundamentally, the eVTOL underlining the Blade-Beta partnership addresses myriad concerns, thus bolstering enthusiasm for BLDE stock. While electric-powered aircraft don’t represent a radical departure from the basic principles of air transportation, the platform offers significant benefits. Most notably, it carries the advantage of social convenience.
According to the coalition Noise Free America, “Excessive noise from helicopters is a growing national issue. Police departments, news stations, and tourism companies all utilize low-flying, roaring helicopters—to the great detriment of citizens living below. Unfortunately, the Federal Aviation Administration (FAA) has taken no meaningful action against helicopter noise.”
In fact, critics point out helicopter rides in national parks ruin the outdoor experience. However, the ALIA-250 features a noise profile of only one-tenth of traditional helicopters. Therefore, the eVTOL might not just be a staple for air transportation in major metropolitan areas. Its palatable profile could attract myriad applications, thus potentially lifting BLDE stock.
However, it’s the core business – cutting through heavy metropolitan traffic – that bodes exceptionally well for BLDE stock. According to the World Economic Forum, traffic congestion cost the U.S. economy nearly $87 billion in 2018. To be sure, the immediate aftermath of the coronavirus pandemic brought relief to the streets. However, with activity picking back up again, congestion may become a much more serious issue.
Indeed, with Resume Builder stating that 90% of companies will require their employees to return to the office, the logical deduction is that more people will hit the roadways. In turn, demand for (quietly) occupying the vertical plane of transportation may rise, thus boosting BLDE stock.
Why It Matters
While eVTOL-based air taxis may be expensive now, the combination of economies of scale and the burgeoning gig economy may swing the narrative favorably for BLDE stock. That’s because while corporate employees trade time for compensation, gig workers instead trade their acumen. Since contracts typically involve tasks, independent professionals may value time much more so than employees. This too could surprisingly benefit Blade Air Mobility.
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On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
