Hanwha Aerospace signs $165 million deal with Vertical Aerospace

Hanwha Aerospace signed a $165 million deal with Bristol, Britain-based Vertical Aerospace to supply electric components being used in Vertical's passenger aerial vehicles.

Hanwha Aerospace CEO Shin Hyun-woo, left, and Vertical Aerospace CEO Michael Cervenka pose after signing a memorandum of understanding on July 20 during the Farnborough International Airshow in UK. [HANWHA AEROSPACE]

Hanwha Aerospace signed a $165 million deal with Bristol, Britain-based Vertical Aerospace to supply electric components being used in Vertical's passenger aerial vehicles.

The Korean manufacturer will provide three types of actuators for the VX4 4-passenger electric vertical take-off and landing (eVTOL) aircraft between 2025 and 2035.

The actuators will be integrated into the aircraft's surfaces that generate aerodynamic force and tilt and into blade pitch control systems.

The contract came after the heads of the two companies signed a memorandum of understanding last month.

Hanwha Aerospace expects the deal to help it develop the actuator products that are aligned with the standards set by the Civil Aviation Authority and European Aviation Safety Agency. The company could later extend its client base in Europe.

Vertical's VX4 is currently under development with an aim of being marketed by 2025.

More than 1,400 VX4s have been ordered by airliners, including American Airlines, Virgin Atlantic, Avolon, Bristow, Japan Airlines, Gol, Air Greenland, Gozen Holding and AirAsia, according to Vertical Aerospace.

The head of Hanwha Aerospace hailed the deal as a stepping stone to enter the nascent eVTOL market given its mainstay business involves the manufacturing of engines for conventional aircraft and jets.

"We are really pleased with this strategic partnership, and look forward to entering the eVTOL market as a tier one partner to Vertical," said Hanwha Aerospace CEO Shin Hyun-woo in a statement. "With Hanwha Aerospace's high-end technology and utmost reliability in the UAM eVTOL industry, we believe we will deliver a critical component that is best-in-class in support of Vertical's mission."

"This partnership will help ensure that the VX4 achieves the highest safety, reliability, and performance standards and that we can scale the program to meet the demand of our market-leading pre-order book by value," said Michael Cervenka, President of Vertical, echoed the expectation.

Shares of Hanwha Aerospace jumped 2.99 percent to close at 72,400 won ($54) on Tuesday, following the announcement.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]