Air cabs: Lilium to receive 100 million euro guarantee from the state

The state of Bavaria wants to support the air cab manufacturer Lilium with a guarantee of 50 million euros, while the federal government is to cover the same amount. The state plans to secure a 100 million loan from the state-owned KfW Bank (Kreditanstalt für Wiederaufbau). The FDP-led Federal Ministry of Transport welcomed the plan, but the Bundestag Budget Committee will have to decide.

Lilium wants to be at the forefront of passenger transportation by air cab and has been developing the "Lilium Jet" since 2015. From 2025, the five-seater, which takes off vertically, is to chauffeur its occupants up to 300 kilometers with an electric drive – and at some point even without a pilot.

To achieve this, the start-up needs a lot of money, which it is raising from venture capitalists. In the first half of 2024, the aircraft manufacturer is expected to spend between 185 and 195 million euros on research, development and production, 15 million more than originally planned. This is due to inflation-related cost increases and successful recruitment campaigns for technical employees, according to Lilium managers in the results presentation for the first quarter of 2024. The cover page of the presentation features Chancellor Scholz in front of a prototype of the electric jet.

Controversial Bavarian showcase project

The Lilium jet is also a showcase project for the Bavarian government – the factory of the eVTOL (electric vertical take-off and landing) manufacturer is located in Wessling near Munich. The aim of the guarantee is to prevent the company from moving out of Germany. In addition to the KfW loan of 100 million euros secured by the state and federal governments, which has been pending since May, Lilium's management is also negotiating a guarantee with the French government. This would be linked to an investment of up to 400 million euros for the development of production capacities in the Grande Nation.

After opinions on state involvement in Lilium were divided in the Munich cabinet – Minister of Economic Affairs Aiwanger in particular was considered to be an outspoken opponent –, Minister-President Söder has now apparently hit the proverbial nail on the head. As the Bavarian radio station Bayerischer Rundfunk quotes State Chancellery Leader Herrmann, Söder has made a "forward-looking industrial policy decision" and the cabinet has united behind the Franconian.

The manufacturer's order books now contain more than one hundred binding orders and around 700 memorandums of understanding (MoU), and a Saudi airline has also ordered fifty aircrafts. The Bavarians are in a tough race with the competition. Lilium's competitor Volocopter originally wanted to offer manned flights as a feeder service for the Olympic Games in July this year, but failed due to a lack of approval from EASA, the European Aviation Safety Agency.

(cku)