Delta Air Lines (DAL) said on Tuesday it had invested $60 million in air taxi startup Joby Aviation, while acquiring a 2% equity stake.
The tie-up will initially offer passengers air taxi transport to and from airports in New York and Los Angeles, the airline said.
According to Delta Air’s Chief Executive Officer Ed Bastian, the air carrier will also have a board seat, while the total investment could reach $200 million.
A Joby-operated service will be integrated into Delta Air’s customer-facing channels to provide short-range airport transport, which would save passengers time and distraction.
Joby had said that it expected to roll out air taxi service in 2024.
In May, the company obtained its Part 135 Air Carrier Certification from the Federal Aviation Administration. But prior to launching the service, Joby will have to receive additional regulatory approvals for its electric vertical take-off and landing aircraft and for establishing airport infrastructure.
The two companies did not specify what the cost of the service would be or how they would split revenue.
Delta Air shares closed lower for the fifth time in the past ten trading sessions in New York on Tuesday. The stock went down 1.97% ($0.58) to $28.84, after touching an intraday low at $28.38. The latter has been a price level not seen since October 3rd ($27.20).
The shares of Delta Air Lines Inc have retreated 26.20% so far in 2022 compared with a 24.70% loss for the benchmark index, S&P 500 (SPX).
In 2021, Delta Air’s stock went down 2.81%, thus, it again underperformed the S&P 500, which registered a 26.89% gain.
Analyst stock price forecast and recommendation
According to TipRanks, at least 10 out of 11 surveyed investment analysts had rated Delta Air Lines Inc’s stock as “Buy”, while 1 – as “Hold”. The median price target on the stock stands at $44.85.