An executive order lifted Joby and Archer Aviation stocks to double-digit percentage gains.
Two air taxi stocks, Joby Aviation (NYSE:) and Archer Aviation Inc (NYSE:) were taking off on Monday, spurred by an executive order that should be favorable for these stocks, and others in the industry.
Joby stock jumped some 13.5% on Monday to about $9.25 per share while Archer stock rose roughly 12.8% to about $11.50 per share.
Both of these companies build what are called electric vertical takeoff and landing (eVTOL) aircraft. They are the future of transportation, as both are rolling out air taxi services with these aircraft. Their air taxis are expected to launch commercial services within the next year in select markets and going from there.
Further, both of these companies also develop aircraft for defense and other uses.
The catalyst on Monday was an executive order from U.S. President Donald Trump that could accelerate their development.
Trump’s order, introduced last Friday, seeks to reestablish the United States as the leader in high-speed aviation and empower engineers, entrepreneurs, and visionaries to develop the next generation of air travel.
“The United States stands at the threshold of a bold new chapter in aerospace innovation. For more than 50 years, outdated and overly restrictive regulations have grounded the promise of supersonic flight over land, stifling American ingenuity, weakening our global competitiveness, and ceding leadership to foreign adversaries. Advances in aerospace engineering, materials science, and noise reduction now make supersonic flight not just possible, but safe, sustainable, and commercially viable,” the order states.
Repeals Ban on Supersonic Flight
The order seeks to accomplish several things, including the repeal of a 1973 prohibition on overland supersonic flight. In addition, it would remove regulatory barriers that hinder the advancement of supersonic aviation technology.
It also calls for the Federal Aviation Administration to establish a rule for supersonic aircraft noise, defining acceptable noise thresholds for takeoff, landing, and operation.
In addition, the executive order calls on the director of the Office of Science and Technology Policy (OSTP) to coordinate supersonic research and development through the National Science and Technology Council.
The goal of this effort would be to identify research, development, testing, and evaluation (RDT&E) needs for commercial viability, foster testing of supersonic technologies at federal sites, and share results of the RDT&E efforts.
Finally, it would require the Secretary of Transportation to engage with foreign partners to seek alignment on regulatory approaches and secure safety agreements with foreign aviation authorities.
As major players in the next generation of transportation, investors saw this as a positive development for both Archer and Joby. The rules that stem from this could spur more research and development funding and lower regulatory barriers, among other benefits.
Neither Archer nor Joby are profitable yet, but they bear watching as they get closer to launching commercial operations.