Lilium in Talks for $1 Billion Order with Brazilian Airline

Lilium and Azul Airlines Negotiate $1 Billion Aircraft Order

Lilium, a German developer of electric aircraft, is currently in discussions to finalize an agreement with Azul, a major Brazilian airline. The potential deal involves the purchase of 220 aircraft, valued at $1 billion.

Details of the Proposed Agreement

A preliminary term sheet has already been signed, paving the way for a definitive agreement in the near future, as confirmed by a Lilium representative to TechCrunch.

This prospective order represents Lilium’s largest to date and signifies its initial expansion into the South American aviation market.

Operational Framework

The envisioned plan involves the creation of a new airline network, branded jointly by both companies, operating within Brazil.

Azul would be responsible for the operation and upkeep of the Lilium fleet, which consists of the company’s seven-seater aircraft.

Lilium, in turn, will supply specialized spare parts, including battery replacements, and a comprehensive aircraft health monitoring system.

Delivery Timeline and Regulatory Hurdles

Aircraft deliveries are projected to begin in 2025. This timeline aligns with Lilium’s planned commencement of commercial operations in both Europe and the United States.

However, these schedules are contingent upon receiving the necessary certification approvals from the relevant aerospace authorities in each region.

Azul has committed to assisting Lilium in navigating the Brazilian regulatory approval processes as part of this agreement.

Significance and Conditions

Even with a finalized agreement, the order is likely to be conditional upon Lilium achieving specific performance targets and benchmarks. This mirrors the structure of a similar $1 billion order placed by United Airlines with Archer Aviation.

Nevertheless, orders of this magnitude are viewed favorably by the market and investors, reinforcing the viability of electric vertical take-off and landing (eVTOL) technology.

Going Public via SPAC

Similar to Archer, Lilium is pursuing a public listing through a Special Purpose Acquisition Company (SPAC).

In March, the company announced its intention to merge with Qell Acquisition Corp. and become publicly traded on the Nasdaq exchange under the ticker symbol “LILM.”

SPACs have gained popularity as a means of going public, particularly within the transportation sector, and are especially attractive to capital-intensive eVTOL startups.

Financial Considerations

The completion of the SPAC merger is crucial for Lilium’s continued operations.

According to a report by the German news outlet Welt, Lilium included a risk warning in its 2019 financial statements, indicating a potential cash shortfall by December 2022 if the merger is not successfully finalized.