Investors intervene to rescue struggling German air taxi business
In a significant development, Saudi Arabia's flag carrier, Saudia, has signed a deal to buy 50 of Lilium's aircraft, offering a glimmer of hope for the embattled German flying taxi startup [1]. Lilium's CEO, Klaus Roewe, stated that this deal will allow the company to restart its business, which has been struggling since it filed for bankruptcy in October 2021 [2].
Lilium, based in Munich, is developing small electric-powered jets that can take off and land vertically. The company has attracted 100 firm orders for its jets, with hundreds more pre-orders, reflecting a significant market interest [4]. However, earlier capital constraints and a failed NASDAQ listing strategy significantly undermined progress, leading to the insolvency situation [3].
The deal with Saudia is expected to be finalized at the start of January, but it remains unclear whether this investment will be enough to pull Lilium out of its financial troubles [1]. Another German flying taxi startup, Volocopter, is also facing financial issues, raising concerns about the support for startups in Germany [5].
The Startup Association warned of potential reputational damage to Germany as a tech location if Berlin failed to support Lilium [6]. Critics have pointed out a lack of funding for young, innovative companies in Germany compared to other countries [5]. However, some cautioned that backing the startup with public money is a gamble.
The situation has sparked a debate about the support for startups in Germany. The Sueddeutsche Zeitung daily suggested that Lilium failed not because the state did not want to invest, but because the company could not produce results [2].
Lilium's flying taxis should be able to carry four to six passengers up to 175 kilometers (110 miles) at a speed of 250 kilometers an hour. The first manned test flight is expected next year, followed by the first deliveries to customers in 2026 [4].
However, the current status of Lilium’s electric jet development after bankruptcy remains uncertain, pending resolution of insolvency and without confirmation of acquisition or operational revival by Mobile Uplift Corporation, the consortium of European and North American investors that has signed a deal to buy Lilium's assets [3].
| Aspect | Status as of 2022-12 | |-----------------------------------|-----------------------------------------------| | Lilium’s financial status | German subsidiaries insolvent; buyout in progress, expected by Jan 2023[1] | | Jet development | Technologically advanced but stalled by financial issues[3] | | Mobile Uplift Corporation takeover| No public evidence or reporting found of acquisition or involvement in Lilium’s jet program[3] |
Further updates would be needed to ascertain any progress post-bankruptcy or corporate changes.
References:
- BBC News
- The Verge
- TechCrunch
- Lilium
- Reuters
- Deutsche Welle
The significant deal between Saudi Arabia's flag carrier, Saudia, and Lilium, a German flying taxi startup, showcases the potential role of technology in revitalizing struggling companies. Despite the deal, Lilium's financial status remains uncertain, with insolvency issues still unresolved as of 2022.
