The U.S. federal government provided quite a strong tailwind for Joby Aviation(NYSE: JOBY) on Tuesday, and thanks to that, the company's shares gained quite a bit of altitude that day. They climbed nearly 13% higher in price on the news, and in doing so, they trounced the essentially flat-lining S&P 500 index.
A monster lift from the FAA
That day, the Federal Aviation Administration (FAA) introduced an official new category of air transport under its jurisdiction that it's calling powered lift. That includes services such as cargo delivery and passenger air taxi, the segment in which Joby specializes with its purpose-designed electric vertical take off and landing (eVTOL) aircraft.
In making the move, the FAA -- best known as the federal regulator of the airline industry -- has finalized the qualifications and trainings that both instructors and pilots are expected to obtain. It also stipulates numerous requirements for the operations of such machines.
The regulator said that powered lift is its first new category of aircraft in almost 80 years.
Understandably, Joby was enthusiastic about this major development in its specialty. It quoted its founder and CEO JoeBen Bevirt as saying, "The regulation published today will ensure the U.S. continues to play a global leadership role in the development and adoption of clean flight."
An uncertain future
While the FAA's move is a giant step forward for both next-generation air transport services generally and Joby specifically, bear in mind that it's still very early days for the powered lift industry (to use the FAA's new terminology). As a business, Joby still has to prove that it can be a viable and, eventually, profitable operator in this still-wide open space.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
