July 12 (Reuters) -

Southwest Airlines ( LUV ) and Archer Aviation ( ACHR ) said

on Friday they have agreed to develop operational plans for

electric air taxi networks built by Archer at California

airports where Texas-based Southwest ( LUV ) operates.

The companies said they have signed a memorandum of

understanding to collaborate on a concept of operations that

lays the foundation for integrated electric air taxi networks

connecting California airports and surrounding communities.

Southwest ( LUV ) shares rose 2% while Archer was up 10.5%.

Electric vertical takeoff and landing aircraft (eVTOL) have

been touted as the future of urban air mobility. Archer is

developing its Midnight eVTOL aircraft.

Airlines are looking at developing transport services

using battery-powered aircraft that can take off and land

vertically to ferry travelers to airports or on short trips

between cities, allowing them to beat traffic.

"Southwest ( LUV ) is eager to explore the convenience Archer's

air taxis could provide customers flying Southwest ( LUV ) at airports

in busy urban areas," said Paul Cullen, vice president real

estate at Southwest ( LUV ), which operates at 14 California airports.

In May, the U.S. Congress approved legislation

aimed at helping speed

approval and deployment of eVTOL aircraft.

Archer thinks the partnership could help shave

significant time off trips in California, replacing

60-to-90-minute automobile commutes with estimated

10-to-20-minute air taxi flights through a "safe, low-noise,

cost-competitive transportation option with no direct

emissions."

Archer Chief Commercial Officer Nikhil Goel said the

partnership hopes to offer door-to-door trips anywhere in

California in three hours or less, like Santa Monica to Napa

using air taxis on both ends.

Goel said "really meaningful time savings" were

possible, with passengers avoiding rush-hour traffic to

airports. Archer hopes customers will eventually be able to book

an Archer air taxi ticket at the time they buy a Southwest ( LUV ) plane

ticket.

United Airlines is also an investor in Archer

Aviation ( ACHR ).

In 2022, Delta Air Lines ( DAL )

said it had invested $60 million in air taxi startup

Joby Aviation ( JOBY ) for a 2% equity stake, aiming to

initially offer passengers air taxi transport to and from

airports in New York and Los Angeles.

The companies plan to integrate a Joby-operated service

into Delta's customer-facing channels to provide short-range

airport transport.