The COVID 19 Pandemic Is Creating A Startup Boom In The Airline Industry

The COVID-19 pandemic hit airlines hard. Airline revenue collapsed last year, and more than 40 airlines have paused operations or shut down since the beginning of 2020, The Wall Street Journal reported, citing data from Cirium.

Many airlines have responded by laying off workers and cutting flights, but as The Journal reported on Friday, some carriers have sensed an opportunity in the downsizing and cost-cutting of their competitors.

Citing data from Avolon Holdings, which leases aircraft, The Journal reported that over 90 new airlines are set to debut before the end of 2021. Those startups will take off from six continents.

Gallery: UPS reveals plan to buy hundreds of helicopter-like electric aircraft to buzz around cities delivering packages - take a look (Business Insider)

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UPS reveals plan to buy hundreds of helicopter-like electric aircraft to buzz around cities delivering packages - take a look

  • UPS is planning to buy electric takeoff and land aircraft, or eVTOLs, to transport packages.
  • Beta Technologies' Alia-250C is the shipping giant's eVTOL of choice, with options for 150 aircraft.
  • The electric aircraft can carry 1,400 pounds of payload and travel up to 250 miles emission-free.
  • See more stories on Insider's business page.
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UPS is going electric — in the air.


The shipping giant plans to add electric vertical take-off and land aircraft, or eVTOLs, to its fleet of delivery vehicles and has selected Beta Technologies' Alia-250c as the launch aircraft.

Read More: UPS is splashing out for 10 futuristic electric aircraft that could revolutionize package delivery. Here's how the investment could give the company a competitive leg up.


The eVTOLs will help UPS reach smaller and medium-sized markets by air but avoid airports altogether. Much like helicopters, the aircraft don't require a runway and can land directly at UPS facilities to minimize transit times and get packages to their destinations sooner.

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"These new aircraft will create operational efficiencies in our business, open possibilities for new services, and serve as a foundation for future solutions to reduce the emissions profile of our air and ground operation," Juan Perez, UPS' chief information and engineering officer, said in a statement.

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The Alia-250c boasts a 250-mile range, enough to fly between New York and Washington or Los Angeles and Las Vegas, and a top speed of 170 miles per hour all while carrying loads of up to 1,400 pounds.

Source: Beta Technologies

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Four fixed propellers provide vertical lift while one propeller pushes the aircraft forward.


One sector that UPS says would benefit from the reduced delivery times is healthcare providers. Some medicines, like vaccines, have a short shelf-life and need to get to their destinations quicker than other merchandise.

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The eVTOLs can be recharged in under an hour, allowing for quick turnaround times in between flights while cargo is loaded and unload.

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Once the first life cycle of the aircraft's batteries is used up, they can be fitted to charging stations to charge aircraft and UPS' fleet of electric vehicles.

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Electric aircraft also have the benefit of being quiet and emission-free while in flight.

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UPS already achieved the required certification to fly the eVTOLs when the Federal Aviation Administration gave UPS Flight Forward "certification to operate a drone airline."

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The FAA allows UPS to fly payloads of up to 7,500 pounds, well beyond the ALIA-250c's carrying capability of 1,400 pounds.

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The Alia-250c aircraft will be piloted but may be operated autonomously in the future. UPS also has authorization for autonomous flights.

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UPS' eVTOL fleet also won't look like its all-brown delivery trucks.

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Renderings show the aircraft painted in the same colors as UPS Airlines, a mostly white exterior with the company's signature brown towards the rear fuselage with a yellow stripe.

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Here it is on a UPS Airlines Boeing 747-8F.

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UPS' commitment to eVTOLs follows a $1 billion order from United Airlines of similar aircraft from Archer.

Read More: United just ordered $1 billion worth of eVTOLs from a startup that aims to launch intra-city passenger flights in 2024

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United plans to use the aircraft to shuttle passengers to and from major airports in congested cities like Los Angeles.

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EVTOL and urban air mobility companies are currently riding a wave of new funding from special-purpose acquisition companies, or SPACs.

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Joby Aviation is going public through a merger with a SPAC backed by Reid Hoffman in a deal valuing the company at $6.6 billion.

Read More: EVTOL startup Joby Aviation is going public with a $6.6 billion valuation and plans to start passenger flights in 2024 — here's what we know about the company

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Archer similarly announced plans to go public through a SPAC merger with Atlas Crest Investment Corp. in a $1.1 billion deal.

23/25 SLIDES © Thomas Pallini/Business Insider

Blade, the helicopter company, is also going public via a SPAC with a KSL Capital Partners-backed company. The deal values blade at $825 million.

Read More: Helicopter taxi company Blade to go public via SPAC at near $1 billion valuation

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And Beta Technologies might just be next, especially with a new heavy-hitting partner like UPS.

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UPS says the first 10 aircraft are slated to arrive as early as 2024.

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Some of those companies are using higher rates of availability at airports to fill gaps in the offerings of established airlines. Others have been able to purchase assets at a discount.


Load Error

Andrew Levy, the founder of Avelo Airlines, told The Journal he was able to buy seats at reduced prices because the seats had originally been ordered by another airline that decided not to buy them in 2020. Levy also told The Journal he believed the reduced demand for travel during the pandemic made it easier for his airline to find availability at its hub, Hollywood Burbank Airport. Avelo, which has several destinations in the western US, is selling customers on low fares and service from smaller airports, a combination the airline says will make air travel more convenient and enjoyable.

Bjorn Tore Larsen, CEO of the new Norwegian airline Norse Atlantic Airways, told The Journal he was able to buy aircraft once used by Norwegian Air Shuttle, which went bankrupt in 2020, for "historically low" prices. Norse is focusing on inexpensive international flights and plans to debut in December.

"We will focus only on low cost, long-haul business. And to my knowledge we will be the only company of size that will do so," Larsen told The Journal.

The COVID-19 pandemic has also created opportunities for established airlines. Rex Airlines CEO John Sharp told The Journal that his airline has found new opportunities to add routes in large cities. The company also received a steep discount, over 50%, on Boeing 747s previously used by Virgin Australia and found it easier to secure openings at airports than it would have if the demand for air-travel was at pre-pandemic levels, Sharp said.

Source :

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The COVID-19 pandemic is creating a startup boom in the airline industry