United Airlines Holdings (UAL 17.45%) is hopping on board Archer, an electric plane start-up that on Wednesday announced plans to go public in a deal that will raise more than $1 billion for the company.

Archer will go public via a merger with Atlas Crest Investment (ACIC), a special purpose acquisition company (SPAC). The deal includes an equity investment from United, as well as money from automaker Stellantis (STLA -0.04%) and a number of private entities.

An Archer aircraft lands and awaits passengers in this artist rendering.

Rendering of an Archer aircraft picking up customers. Image source: Archer.

Archer is developing an electric plane capable of vertical takeoffs and landings. The company expects its plane to be able to carry as many as four passengers up to 60 miles. In addition to United's investment, the airline has placed a $1 billion order for 200 aircraft, with options for an additional 100.

United sees the planes as a way to give customers quick, easy access to its hub airports, feeding additional traffic from small markets that might not be able to sustain air service today.

"By working with Archer, United is showing the aviation industry that now is the time to embrace cleaner, more efficient modes of transportation," United CEO Scott Kirby said in a statement. "With the right technology, we can curb the impact aircraft have on the planet, but we have to identify the next generation of companies who will make this a reality early and find ways to help them get off the ground."

United has been at the forefront of the climate change discussion. In December, the airline announced an investment in 1PointFive, a company attempting to capture carbon in the atmosphere and bury it underground.

Climate change is expected to be a growing topic of discussion among airlines. Globally, the aviation industry accounts for about 2% of all human carbon dioxide emissions, and much of that comes from shorter flights. Airbus (EADSY 0.97%) is trying to address the issue by developing a zero-emission plane, but there are opportunities for start-ups like Archer to capture some of the market for shorter flights.