Global Trend

For over 30 years, the Trends editors have been tracking and analyzing the technologies and business models needed to deliver Future Air Mobility also known as Advanced Air Mobility, Urban Air Mobility, Personal Aviation Vehicles, Air Taxis and Flying Cars. Until 2015, Future Air Mobility was taken seriously only by a few futurists and obscure technologists.

Then, the convergence of ride-hailing applications, electric propulsion technology and a new generation of avionics suddenly awakened commercial interest from companies as diverse as Boeing, Air Bus, Embraer and Uber.

Six years later, in 2021, this budding industry finally achieved the critical mass we’d been dreaming about since the 1990s.

Consider a just five major milestones from last year:

1. The industry attracted $7 billion in new investment - more than doubling the total investments made over the previous decade. Overall, investment in Future Air Mobility since 2010 has reached $12.8 billion. About 75 percent of this was targeted for manned Advanced Air Mobility (or AAM) players, with the rest going to unmanned drone ventures. 

 

2. Five Advanced Air Mobility companies went public in 2021 - Blade Air Mobility, Joby Aviation, Lilium, Archer Aviation, and Vertical Aerospace - all through mergers with SPACs. Their combined market cap was $10.7 billion. Another company, EVE Air Mobility, recently announced its intention to go through a SPAC merger in 2022. Having these companies publicly traded will increase the attention, transparency and scrutiny associated with this industry.

3. The Future Air Mobility industry received firm orders, options, and letters of intent in 2021 for approximately 6,850 aircraft worth $26.1 billion - outpacing the order volume for conventional aircraft that year by a factor of ten. Of that total, 80 percent were for manned AAM aircraft. Many of those orders are conditional and non-binding, but the spike in order volume is a clear signal of demand, showing real engagement from a range of players, including important incumbents.

4. Further, 2021 was the year in which incumbent aviation players - including OEMs, suppliers, and operators - took public steps, bringing their experience (and checkbooks) to the industry to help scale and develop it. By the end of 2021, five of the ten largest aerospace OEMs had publicly launched AAM programs or made investments in other players. Seven of the ten largest aerospace suppliers are now active in the AAM space. And four of the ten largest airlines have also entered the AAM space. And,

5. 2021 was the year the general public first heard about this new industry in large numbers. In a survey of approximately 4,800 consumers in key markets around the world, McKinsey found that approximately one-fourth of respondents would definitely switch to AAM aircraft for applications such as commuting, errands, business, leisure travel, or trips to the airport.

As in the early days of PCs and automobiles, a sudden stampede has developed with over 300 companies involved in the manned aircraft segment called Advanced Air Mobility (or AAM) as well as others involved in the unmanned drone segment called UAV. And already, a few leaders in the AAM segment seem to be pulling away from the pack in terms of commercial viability.

One leading company is Wisk, which is backed by billionaire Larry Page’s Kitty Hawk Corporation. Furthermore, in 2021, Wisk was able to secure $450 million in funding from Boeing; this makes it one of the best-funded AAM companies in the world. That investment will go toward supporting scaling-up Wisk’s manufacturing efforts as well as development of its sixth generation eVTOL aircraft. (eVTOL stands for Electric Vertical Take-Off and Landing.)

At this point, Wisk’s aircraft is the first-ever candidate for certification as an autonomous passenger-carrying aircraft in the U.S. This certification is expected in 2028. Like most of its competitors, Wisk’s air taxi is fully electric. That means fewer moving parts, which helps the company minimize costs, eventually meeting the price demanded by the average commuter.

Wisk plans to take advantage of lower maintenance, lower operating costs, and not having to pay a pilot to keep the cost per passenger-mile low. Their goal is to make this an affordable everyday mode of transportation for someone just entering the workforce. Operationally, Wisk plans to leverage existing helipads and airports, just adding electric charging stations and the ability to on-load and offload passengers. Wisk’s CEO touts a 20-city rollout plan which has yet to be formally announced.

Another industry pioneer is Lilium, a German company, previously profiled in Trends. Unlike Wisk, Lilium plans to offer its first commercial flights to consumers in 2024, using a human pilot. Because of the way regulation evolves, Lilium expects that even with advanced autonomous systems, its initial pilot cohort will stick around.

They’ll just be on the ground, supervising flights of five, ten, 20, or even 30 autonomous aircraft per pilot. Under that model, Lilium is envisioning a gradual shift from a “fully piloted service” to a more or less “autonomous service”; and as they shift to greater autonomy, the number of aircraft that one pilot can operate will simply increase.

Lilium’s initial service areas will include Florida as well as parts of Germany and Brazil. Unlike many AAM players, which are focusing mostly on flying passengers and cargo to and from various areas within a city, Lilium is gearing up to offer a regional intercity service. Its website describes a world in which a future trip from San Francisco to Lake Tahoe takes under an hour by eVTOL aircraft, compared with almost four hours by car. Similarly, traveling from Zurich to St. Moritz, a two-and-a-half-hour drive, would take just 29 minutes by air.

Low noise operation is one of the key enablers for the entire eVTOL concept. Low noise is crucial to community acceptance and to accessing the spots in urban environments where people want to take off and land.

Helicopters have been able to do vertical takeoff and landing for a very long time, but they are very noisy and costly. The eVTOL industry won’t be truly successful unless it resolves the noise and cost issues. Therefore, both have been critical to Lilium’s strategy from the start.

To make the economics of vertiports and aircraft work, Lilium and its competitors need each facility to handle hundreds (or even thousands) of passengers per hour. Fortunately, the infrastructure is quite simple in concept; each “vertiport” has at least one helicopter pad and typically six to ten gates, where passengers can board while the aircraft is charging. All these gates and helipads are connected via a central taxiway.

There will also be some kind of lounge where passengers can check in to their flight on their phones and get some food and beverages. However, Lilium envisions people flowing through this infrastructure quickly. One of the big advantages of the eVTOL industry will be making the airport experience very different from what we know today. These distributed, efficient vertiports will make it possible to get from a car into an airplane in two or three minutes, not an hour or more.

What’s the bottom line?

Suddenly, Flying Cars are finally being transformed from science fiction into everyday reality. It’s probably still a while before they become consumer products, but the business case for aerial ride-sharing is clear. The challenge now is to get real aircraft, delivering real services, to real customers, as soon as possible. Assuming they can operate safely, the big question is when and to what degree consumers will embrace this technology.

If the current cost and elasticity assumptions are correct, the sky’s the limit.

Given this trend, we offer the following forecasts for your consideration.

As a result, experts now estimate that revenues for just the AAM segment could reach $4 trillion by 2035, revolutionizing the way people commute. There will be many applications of this new technology. On the ground today, there’s everything from sports cars to trucks to buses. We will see something similar in the air: there will be eVTOL aircraft used on intercity shuttle routes, sightseeing applications, taxi applications, cargo applications, and so on. Expect to see many different AAM & UAV products and business models.

The mission of the pioneering companies is to create a high-speed transportation system that is affordable for everyone. The early adopters will most likely be businesspeople, partly because price points will be higher in the early phases. But longer term, eVTOL aircraft will become a standard means of transportation for our whole society, when and where automobile commutes are inconvenient.

This infrastructure will include the tops of private garages and small vertiports in small villages as well as hotel rooftops and large downtown vertiports in big cities. And beyond 2030, companies like Lilium may find it useful to shift from providing shuttle services only for larger groups of people to also providing on-demand services for individuals, who might take a two-seater from a vertiport next to their house to another location somewhere. Ideally, autonomous aircraft and low-cost infrastructure can enable price points and throughput levels where such an on-demand air-taxi business model will make sense.

As players move toward locking in designs and prepare for manufacturing, a reliable supply chain is needed. Existing aerospace suppliers will need to devote some attention to these new markets, and new suppliers will need to develop the capabilities to meet the unique requirements for aerospace manufacturing, including relatively low volumes, quality assurance, tracking, and certification.

As it moves closer to commercial service, the industry will have to expand its focus beyond the development and manufacturing of aircraft to the domains of customer experience and flight operations, in areas such as pilot training, ground infrastructure, and maintenance, among others. And,

Both big companies and independent companies may find profitable niches. Because the long-term demand is going to be so great, no one company would ever be able to satisfy it. As the market develops, an ecosystem will be created; at that point investors will be more comfortable with investing because they know that if one company fails, another can take its place.

This will also mean that more infrastructure is being built, more supply-chain developments are happening, and more politicians are pushing for state-supported infrastructure funding. If there was only one company in the entire sector, most of these things would be slow to happen, and it would be very hard to make progress.