According to media reports, German electric aircraft startup Lilium said it intends to enter into a $1 billion commercial agreement and strategic alliance with Brazil's largest airline, Azul, which includes an order for 220 aircraft.
If the agreement with Azul materializes, it would be the largest order ever for Lilium and would mark its entry into the South American market.
Lilium and Azul said they plan to establish a network of electric vertical takeoff and landing (eVTOL) vehicles in Brazil by 2025. If implemented as planned, this could change the way Brazil travels domestically. The country currently has nearly 100 million domestic air passengers per year and is one of the world's leading markets for civil helicopters and business aviation.
Lilium said the strategic alliance with Azul and the aircraft order would depend on the two parties' finalized commercial terms and related documents. According to sources familiar with the matter, the term sheet has been signed, and a final agreement will be reached within the next few months.
Lilium noted that Azul will help it obtain flight clearance approval in Brazil. Alex Asseily, Lilium's chief strategy officer, said the company's planned aircraft will fly at 175 miles per hour and have a range of 155 miles.
Currently, Lilium's latest aircraft is a five-seat model. Lilium will offer Azul a seven-seat model for about $4.5 million if the aircraft can be mass-produced. The production line is currently 50 percent complete, Aseli added.
The companies also said that the 220 aircraft Azul plans to purchase will operate in Brazil as a new brand. If the two companies reach an agreement, Azul Airlines will operate and maintain the fleet of the flagship seven-seat aircraft, and Lilium will provide custom spare parts, including an aircraft health monitoring platform and replacement batteries.
Azul CEO John Rodgerson said, "Azul's brand, route network, and customer loyalty program will help build the market and demand for Lilium aircraft in Brazil."
Previously, Lilium had announced plans to merge with Qell Acquisition Corp. and list on the Nasdaq under the ticker symbol "LILM. That merger plan is still moving forward.
