Taking its package delivery services to new heights, United Parcel Service Inc. (UPS, Financial) announced on Wednesday it is buying 10 electric vertical takeoff and landing aircraft from Beta Technologies.
While the price of the transaction was not disclosed, the Atlanta-based courier company said it is testing the eVTOLs for use in its Express Air network under the Flight Forward division. The aircraft, which has a 1,400-pound cargo capacity, looks like a cross between a plane and a helicopter and is able to land on a helipad as opposed to an airport runway. It can travel up to 250 miles at 170 miles per hour on a single charge.
In a statement, Beta founder and CEO Kyle Clark discussed the aircraft's design.
"We're combining simple, elegant design and advanced technology to create a reliable aircraft with zero operational emissions that will revolutionize how cargo moves," he said. "By utilizing vertical takeoffs and landings, we can turn relatively small spaces at existing UPS facilities into a micro air feeder network without the noise or operating emissions of traditional aircraft."
UPS initially plans to use them in smaller markets and create either a series of short routes or one long route to meet customer needs, benefiting health care providers as well as thousands of small and medium-sized businesses.
Following certification from the Federal Aviation Administration, Beta will design and build the eVTOLs, with delivery scheduled for 2024. The Vermont-based company will also provide landing pads and rechargeable batteries. UPS has the option to purchase up to 150 more of the aircraft as well.
UPS Chief Information and Engineering Officer Juan Perez emphasized the eVTOLs are "all about innovation" as the company looks to generate returns for the business, its customers as well as the environment.
"These new aircraft will create operational efficiencies in our business, open possibilities for new services, and serve as a foundation for future solutions to reduce the emissions profile of our air and ground operation," he said.
This is not the only way in which UPS is being more green. In January 2020, the company entered a commitment agreement with Arrival Group (ARVL, Financial) to purchase up to 10,000 electric vehicles for its fleet of delivery trucks.
With a $150.1 billion market cap, shares of UPS were down 0.27% at $172.51 on Wednesday. GuruFocus estimates the stock has climbed more than 80% over the past year.
With a 0.52% stake, Bill Gates (Trades, Portfolio)' foundation trust is UPS's largest guru shareholder. Other top investors who also see value in the stock include PRIMECAP Management (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), the T Rowe Price Equity Income Fund (Trades, Portfolio), Baillie Gifford (Trades, Portfolio) & Co., Mairs and Power (Trades, Portfolio), Ray Dalio (Trades, Portfolio)'s Bridgewater Associates, Ken Fisher (Trades, Portfolio) and Warren Buffett (Trades, Portfolio).
Disclosure: No positions.
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