What are the key regulatory milestones and any regulatory challenges that could affect the timeline?

Key regulatory milestones

• FAA “Special Condition” and “Airworthiness” approvals for the Tri‑Fan 600 – XTI has said the aircraft is now in the “final design‑freeze” stage and is moving toward the FAA’s Milestone 1 – Completion of the Preliminary Design Review (PDR) and Milestone 2 – Critical Design Review (CDR). Both are required before the company can file a Type Certificate and begin the Series 2 flight‑test envelope that the FAA has earmarked for the second half of 2025.
  
• Part 135/141 operational certification – After the Type Certificate, XTI must secure a Part 135 (commercial) or Part 141 (training) operating authority to launch revenue‑producing services. The FAA typically grants a “Limited Operations” waiver first, followed by a full Part 135 certificate once a minimum of 150 flight‑hours in the “critical” flight‑test regime are logged. XTI’s timeline assumes the waiver will be issued by Q1 2026, with full Part 135 approval by Q3 2026.
  
• European Union Aviation Safety Agency (EASA) “Conformity” assessment – Because XTI is targeting trans‑Atlantic markets, the company must also file an EASA “Type Acceptance” dossier. The agency’s “One‑Stop‑Shop” process usually runs in parallel with the FAA, but any divergence in safety standards can add 3‑6 months to the certification schedule.

Regulatory challenges that could delay the timeline

• FAA “Special Condition” backlog – The FAA has recently announced a surge in x‑VTOL applications, leading to a 12‑month average review window for special‑condition requests. If the Tri‑Fan 600’s novel propulsion system (hydrogen‑fuel‑cell hybrid) triggers additional environmental‑impact studies, the PDR/CDR approvals could be pushed out, compressing the flight‑test window.
  
• Supply‑chain‑driven documentation gaps – XTI’s expanded strategic partnerships (e.g., with battery‑cell manufacturers) require cross‑vendor safety data that the FAA must review. Incomplete or late submissions can trigger “non‑conformance” letters, forcing redesigns that add 3‑4 months per iteration.
  
• EASA “Conformity” divergence – If EASA demands stricter noise‑abatement or emissions testing for the hydrogen system, XTI may need to redesign the inlet architecture, a change that would have to be re‑filed with the FAA under a “Design Change” request, further extending the certification timeline.

Trading implication

The market is pricing in a relatively aggressive 12‑month runway to commercial service (≈ +15 % upside from the current price). However, the regulatory headwinds outlined above introduce a 15‑20 % probability of a 6‑9 month delay. Traders should consider a partial‑position—e.g., buying on dips if the stock falls > 5 % on any “delay” news, while keeping a modest stop‑loss around 3 % to protect against the upside‑risk of a successful, on‑time certification.