Key Points
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Archer claims to be the first eVTOL company to complete Phase 3 of the FAA type-certification process, advancing to the final stage.
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The company held roughly $1.6 billion in cash and short-term investments by the end of June, against a guided quarterly adjusted EBITDA loss of up to $200 million.
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Operations for the Midnight aircraft are slated to commence under a White House pilot program later this year in Texas.
Archer Aviation (NYSE:ACHR) currently trades roughly 61% below its 52-week high, presenting an intriguing opportunity. Notably, its second-quarter revenue reached $5 million, entirely derived from fueling, ground handling, and leasing at Hawthorne Airport in Los Angeles—not from passenger transport. A year prior, revenue was nonexistent. Consequently, a $4.4 billion market capitalization currently hinges on an air taxi service that has yet to launch.
My forecast suggests that the Midnight eVTOL aircraft will transport its first paying passenger in the United States before 2028.
Image source: Archer Aviation.
Certification Reaches Its Final Stage
Archer outlines the FAA type certificate process across four phases, stating it has entered the final one. The company announced in May that it became the first eVTOL manufacturer to complete Phase 3. Phase 4 involves demonstrating compliance with FAA airworthiness requirements through formal testing, culminating in the issuance of a type certificate.
Furthermore, in July, a piloted Midnight completed a round trip between Salinas Municipal Airport and Monterey Regional Airport, with each leg taking approximately nine minutes—marking the company’s inaugural intercity flights in California.
Archer was also selected as an air taxi partner in three winning applications covering eight states under the White House’s eVTOL Integration Pilot Program (eIPP).
CEO Adam Goldstein stated in the company’s second-quarter shareholder letter: “We plan to begin flying in the Los Angeles area based out of Hawthorne Airport, and subsequently commence operations under the White House’s eIPP later this year in Texas.”
Additionally, Archer serves as the Official Air Taxi Provider for the LA28 Olympic Games in the summer of 2028, a commitment that necessitates passenger service well before the deadline.
Can the Finances Sustain the Timeline?
The primary threat to this timeline is capital. Archer reported a net loss of $263.2 million in the second quarter, a roughly 28% year-over-year increase and an escalation from the $217.7 million loss in the first quarter. Management projects a third-quarter adjusted EBITDA loss between $170 million and $200 million, following a $177.1 million loss on that basis in the second quarter. (Adjusted EBITDA, the metric Archer guides on, excludes items like stock-based compensation.) These losses are expanding as flight testing, certification efforts, and production expenditures accelerate.
However, the balance sheet can temporarily absorb these costs. Archer ended June with approximately $1.6 billion in cash and short-term investments, a decrease of about $215 million for the quarter. At this rate of cash burn, the reserves cover roughly seven more quarters, extending into 2028.
Furthermore, Archer agreed in August to acquire three subsidiaries from Boeing, paying with stock and warrants, with closing expected by year-end. Integration is rarely cost-free and further stock sales seem probable, but I do not believe the timeline depends on raising additional capital; the cash on hand is sufficient to carry Archer to its first paid flight.
The UAE May Precede the U.S.
It is worth noting that the first fare may not be American. In May, the United Arab Emirates’ aviation regulator advanced Midnight into a Restricted Type Certificate program, a streamlined pathway permitting limited commercial operations. Service is planned in Abu Dhabi, meaning Archer’s first paying passenger globally could board overseas before the FAA finalizes its process.
This is why the prediction is specifically scoped to the United States. While a fare in Abu Dhabi would validate the aircraft, the U.S. pathway relies on the FAA, and the domestic market underpins the investment thesis.
The honest risk remains the schedule. Archer targeted its first passenger-carrying flights in 2026 with its fourth-quarter report, but a target is not a guaranteed schedule—Archer must still complete flight tests and secure FAA approval. However, the prediction does not require 2026 to hold. The year between management’s late-2026 plans and the end of 2027 provides a buffer.
Therefore, will a paying passenger board a Midnight in the U.S. before 2028? I believe so. Archer claims to have closed Phase 3 of the FAA process ahead of any other eVTOL company, the pilot program provides a venue to fly this year, and the balance sheet reaches the date unaided.
The prediction and the stock represent distinct bets, though. At approximately $4.4 billion, Archer remains valued on its future potential, while losses widen and shareholders wait.
I would prefer to observe what a paying route earns before investing.
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Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing. The Motley Fool has a disclosure policy.