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​Video: ​Will Air Taxis Take Flight?

Alan Kirby's Photo

Alan C. Kirby, CAIA;

Senior Vice President
Client Portfolio Manager

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​​In this video, Alger Client Portfolio Manager, Alan Kirby, explains this brave new world of commuter travel.

​ALAN KIRBY: You’re standing downtown in a major metropolitan city and need to get to the airport fast. But traffic is at a standstill and a bus or subway could take you more than an hour to reach your destination. 

So, what about an air taxi? Well, today, for everyday use – that’s not so practical. A helicopter flight from downtown Manhattan to JFK International might make the trip in under 10 minutes, but the fare price could run to the hundreds, if not thousands, of dollars. 

But we think, in the not-too-distant future, that could all eventually change. Because now, a new generation of companies is seeking to create quieter, less expensive, environmentally friendly aircraft for the urban air mobility market. They’re called eVTOLs or electric vertical take-off and landing aircraft. And they’re designed to use carbon-fiber construction and aviation-grade battery power. Rather than one large (and loud) rotor, eVTOLs might use as many as eight small, electric engines with scaled-down (and quieter) rotors which offer adequate lift and speed. And most importantly, industry research organizations suggest the trip cost per passenger by eVTOL could be less than that of a city taxicab.
 
But before you book your ticket – investors should know that the development runway for some of these new concepts is likely to be a bit longer than projected. 

While some of these new eVTOLs have achieved powered flight, most have done so only in benign weather conditions and remotely controlled without an onboard pilot. And none are as yet approved by the Federal Aviation Administration. And there are other obstacles.

•         Building an energy efficient aircraft with tiltrotors/wing and an all-electric propulsion system, meeting safety standards and keeping costs low – may take a while – even decades. And

•         The proliferation of usable helipads for convenient access to eVTOLs may be met with resistance from local governments and communities.

So, while Alger believes that one or more eVTOL companies may eventually meet these challenges, for the near term Air Taxis may just have to stay grounded.​
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​A new generation of companies is seeking to create less expensive, environmentally friendly aircraft for the urban air mobility market. But before you book your ticket, investors should consider some gating factors. 

​​In this video, Alger Client Portfolio Manager, Alan Kirby, explains this brave new world of commuter travel.

​ALAN KIRBY: You’re standing downtown in a major metropolitan city and need to get to the airport fast. But traffic is at a standstill and a bus or subway could take you more than an hour to reach your destination. 

So, what about an air taxi? Well, today, for everyday use – that’s not so practical. A helicopter flight from downtown Manhattan to JFK International might make the trip in under 10 minutes, but the fare price could run to the hundreds, if not thousands, of dollars. 

But we think, in the not-too-distant future, that could all eventually change. Because now, a new generation of companies is seeking to create quieter, less expensive, environmentally friendly aircraft for the urban air mobility market. They’re called eVTOLs or electric vertical take-off and landing aircraft. And they’re designed to use carbon-fiber construction and aviation-grade battery power. Rather than one large (and loud) rotor, eVTOLs might use as many as eight small, electric engines with scaled-down (and quieter) rotors which offer adequate lift and speed. And most importantly, industry research organizations suggest the trip cost per passenger by eVTOL could be less than that of a city taxicab.
 
But before you book your ticket – investors should know that the development runway for some of these new concepts is likely to be a bit longer than projected. 

While some of these new eVTOLs have achieved powered flight, most have done so only in benign weather conditions and remotely controlled without an onboard pilot. And none are as yet approved by the Federal Aviation Administration. And there are other obstacles.

•         Building an energy efficient aircraft with tiltrotors/wing and an all-electric propulsion system, meeting safety standards and keeping costs low – may take a while – even decades. And

•         The proliferation of usable helipads for convenient access to eVTOLs may be met with resistance from local governments and communities.

So, while Alger believes that one or more eVTOL companies may eventually meet these challenges, for the near term Air Taxis may just have to stay grounded​.​
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A new generation of companies is seeking to create environmentally friendly aircraft for the urban air mobility market. But before you book your ticket, investors should consider some gating factors.

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The views expressed are the views of Fred Alger Management, LLC (FAM) and its affiliates as of June 2022. These views are subject to change at any time and may not represent the views of all portfolio management teams. These views should not be interpreted as a guarantee of the future performance of the markets, any security or any funds managed by FAM. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities. Holdings and sector allocations are subject to change. 

Risk Disclosures: Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings Iand may be more sensitive to market, political, and economic developments. Technology companies may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness such as COVID-19 or other public health issues, recessions, or other events could have a significant impact on investments. Past performance is not indicative of future performance.  Investors whose reference currency differs from that in which the underlying assets are invested may be subject to exchange rate movements that alter the value of their investments.

Important Information for US Investors: This material must be accompanied by the most recent fund fact sheet(s) if used in connection with the sale of mutual fund and ETF shares. Fred Alger & Company, LLC serves as distributor of the Alger mutual funds.

Important Information for UK and EU Investors: This material is directed at investment professionals and qualified investors (as defined by MiFID/FCA regulations). It is for information purposes only and has been prepared and is made available for the benefit investors. This material does not constitute an offer or solicitation to any person in any jurisdiction in which it is not authorised or permitted, or to anyone who would be an unlawful recipient, and is only intended for use by original recipients and addressees. 

The original recipient is solely responsible for any actions in further distributing this material and should be satisfied in doing so that there is no breach of local legislation or regulation. 

Certain products may be subject to restrictions with regard to certain persons or in certain countries under national regulations applicable to such persons or countries. 

Alger Management, Ltd. (company house number 8634056, domiciled at 78 Brook Street, London W1K 5EF, UK) is authorised and regulated by the Financial Conduct Authority, for the distribution of regulated financial products and services. FAM and/or Weatherbie Capital, LLC, U.S. registered investment advisors, serve as subp-ortfolio manager to financial products distributed by Alger Management, Ltd. 

Alger Group Holdings, LLC (parent company of FAM and Alger Management, Ltd.), FAM, and Fred Alger & Company, LLC are not an authorized person for the purposes of the Financial Services and Markets Act 2000 of the United Kingdom (“FSMA”) and this material has not been approved by an authorized person for the purposes of Section 21(2)(b) of the FSMA. 

Important information for Investors in Israel: This material is provided in Israel only to investors of the type listed in the first schedule of the Securities Law, 1968 (the "Securities Law") and the Regulation of Investment Advice, Investment Marketing and Investment Portfolio Management Law, 1995. The Fund units will not be sold to investors who are not of the type listed in the first schedule of the Securities Law.

Fred Alger & Company, LLC 100 Pearl Street, New York, NY 10004 / 800.305.8547 / www.alger.com
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