(Reuters) -Archer Aviation ( ACHR ) said on Wednesday it has signed a deal with The Helicopter Company and luxury developer Red Sea Global, both owned by Saudi Arabia's Public Investment Fund, to develop, test and potentially deploy electric aircraft in the Kingdom.

Western air taxi makers have been stepping up efforts to expand beyond their home markets, with the Middle East emerging as a key target thanks to its fast-growing tourism sector, supportive regulators and willingness to invest early in next-generation transport technologies.

THC, Archer and Red Sea Global, a developer fully owned by Saudi Arabia's sovereign wealth fund PIF, plan to set up a structured "sandbox" environment where Archer's Midnight eVTOL aircraft can conduct test flights under real-world conditions.

The tests would assess performance, operational viability, regulatory alignment and passenger acceptance, as well as broader ecosystem readiness.

Red Sea Global will take the lead on the sandbox testing, using Archer's aircraft to study how it could fit into the tourism developer's future transport network.

The deal follows a string of international partnerships for Archer, including agreements in South Korea and Japan to deploy its Midnight aircraft in urban air mobility programs.