Urban Air Mobility is dead (for now)

???I’m Kolin, based in the lovely city of Hamburg, with a passion about the disruptive forces shaking up aviation and aerospace. With the AeroTechPulse, I share a?curation?of the????hottest????news trends and developments in aviation and aerospace. The AeroTechPulse is distributed biweekly.

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Urban air mobility is either dead (for the time being) or never really intended to take off. Another eVTOL use case surfaced on my news channel this week. The current focus is on using eVTOLs for private boats. As UAM's primary plan was for intra-city transportation, we have expanded to include airport and commuter shuttles, EMS, cargo, sightseeing, intra-firm shuttles, intercity... and now yachts. This, in my opinion, indicates that businesses are desperately looking for any possible commercial application for these intra-city eVTOLs. By that, I mean these eVTOLs, which mimic conventional helicopters but have a very short range and a small passenger capacity. Since their planned introduction is for the middle or end of the 2020s, I must admit that I have never found the idea of employing air taxis for intra-city travel to be entirely plausible. This is supported by the following six justifications:

1. Social Desirability: Many people fail to consider the public's acceptability or, more accurately, desire for using air taxis for intra-city transportation. We are discussing a high end, premium product that does not cater to the vast majority of people. There won't be any social desirability as a result. We can also learn a few things from the 2019 eScooter launch and how that affected consumer adoption.
2. Regulation: The government won't merely let these passenger drones to fly over populous areas in low airspace.
3. Time: The time advantage over other forms of transportation is minimal. There are just two cities in Europe where it would make sense: London and Paris. There is no doubt that the USA and Asia are different due to America's extremely poor public transportation system and the greater number of megacities in Asia.
4. Demand: There is only a tiny number of people who can afford, and would be willing to pay for an air taxi service. As a result, there won't be enough demand, certainly not a steady stream of demand throughout the day. From the perspective of the operator, though, this is significant. Air taxis may only be used on a few, specific routes, so we shouldn't have the false impression that 1,000x of them will soon begin to fly around major cities. Which raises the question of the raison d'être of the many 100+ projects focusing on UAM.
5. Infrastructure: A tight housing market already puts strain on metropolises and megacities. My hypothesis is, if a mayor must choose between investing in building vertiports (which, incidentally, requires a lot of land) and building hundreds or thousands of apartments, the major will always choose the latter option. As a result, the vertiports would have to be build in more remote areas, where a passenger would first have to make the trip from downtown. This takes us back to the "time advantage" problem. And with that, the time advantage is lost especially on short, intra-city routes.
6. Sustainability: Particularly when addressed in the same phrase as the replacement of short-haul planes, trains or vehicles, the claim that air taxis are sustainable is a myth and little more than a marketing stunt. And I know: zero operational emissions, but that's not all of the equation. Yes, eVTOLs are superior to ICEVs, but not when compared to BEVs because of their high energy needs (e.g., double the energy of existing BEVs, and up to 10x of trains). I believe that if governments are serious about addressing climate change (Europe has just decided to ban ICEVs from 2035), a broader roll-out of air taxis, particularly for intra-city use cases, won't take place since renewable energy will continue to be in short supply and become even more so when used to produce synthetic aviation fuels. And then there's the question of who gets the green energy? My guess is that the most efficient transport mode will be preferred or mandated.

What are your thoughts? Do you agree or disagree with UAM (not AAM as a whole) being dead (for now) and the use case of ferrying people with an eVTOL through Munich or any other city? By the way, there are other great use cases for players in AAM, just not the intra-city one.

?? Driving the Conversation. The Top Reads.

Top 1:?Alaska Airlines and United outline AAM business models.

United Airlines believes ferrying premium travelers to gateway hubs is a compelling value proposition to avoid stress-inducing, time-consuming commutes to the airport. Alaska Airlines plans to bundle the service into an existing customer experience and offer other use cases, such as a hotel shuttle and a product or ticket package that includes Wall Street to Canary Wharf in London. Initial operations with Dash 8-400s powered by ZeroAvia's liquid-hydrogen-fueled engine could be run at a loss, but the overall impact would be a carbon-neutral flight that feeds downline business. Profitability will improve as fleets of hydrogen-fueled aircraft begin to proliferate.

Top 2: Major factors to monitor in AAM in 2023.

Players in the eVTOL space must finalize and freeze their designs to meet certification timelines for the middle of this decade. To meet timelines for entry into service, manufacturers and suppliers will have to focus on building out their production systems in 2023. Drone operations may see more visible activity in 2023, and mergers and business closures may result in fewer players. Additional funding will be needed for players to continue on this journey, such as direct investment in OEMs or partnerships in which parties such as suppliers, investors, or customers take on investment.

Top 3: The surprising market for regional air mobility in the US.

Regional airports are underutilized across the country due to deregulation and the retirement of turboprop aircraft. However, advances in aviation electric propulsion systems could create a new market for regional air mobility, offering additional traveling options for U.S. travelers. A NASA-funded Georgia Tech study identified over 4,200 Origin-destination markets connecting 980 airports nationwide with a minimum frequency of two flights per day. This could bring profitable air services at over 140 airports, connecting many more communities to the rest of the world. NASA's Aeronautics Research Mission Directorate (ARMD) and the National Renewable Energy Laboratory are collaborating with Georgia Tech to find ways to power these airports using solar-powered electricity. The first electric or hybrid-electric aircraft are expected to begin operating in the second half of this decade, with most industry experts predicting that the market won't scale up before 2030. We'll see if regional air mobility materializes. Richard Aboulafia discusses Mitsubishis decision to cancel the SpaceJet aircraft program and what the move says about the regional aircraft market.

Top 4: Vertical Aerospace receives payment for VX4 eVTOL deliveries.

Vertical Aerospace has secured a pre-delivery payment from Japanese trading and investment conglomerate Marubeni Corporation for 25 VX4 eVTOL aircraft, making it the first customer in Asia to back its orders with a down payment. Vertical plans to have the VX4 operating in Japan in time for the Osaka-Kansai World Expo in 2025, providing air taxi services for attendees. Marubeni and Vertical Aerospace have signed a joint agreement to build an ecosystem for zero-emissions travel in Japan. Other VX4 customers include American Airlines, Virgin Atlantic, FlyingGroup, and Avalon.

Top 5: Electro.Aero calling for global aviation charging standard.

Electric aviation charger manufacturer Electro.Aero is calling on the industry to agree to a global standard for charging couplers. Electro initially supplied charging components to the NASA X-57 project, and in 2018 became the world's first owner and operator of a production electric aircraft (Pipistrel Electro Alpha). In 2020, Portlock and the team built and flew their own electric microlight technology demonstrator. Electro's SmartHangar energy storage is a solution to the power limits of airports, allowing them to fast charge aircraft as and when required. The US National Renewable Energy Laboratory is exploring the AIR7357 standard for trucks and other ground vehicles, and Electro is facilitating one of their lead researchers to write the standard for aviation. Electro's customers have largely been airframers and OEMs designing their own aircraft, but Electro has begun to see a shift towards airports. Electro is currently asking all electric aviation industry stakeholders to take part in a survey to assist in the process of coupler adoption.

Top 6: NASA moves forward in electric aviation.

NASA's experimental electric airplane has taken a "major step" toward its maiden flight after successfully completing thermal testing of its cruise motor controllers. The controllers were recently put through their paces inside a test chamber at NASA's Glenn Research Center in Cleveland, Ohio. NASA's X-57 team is now moving toward combining all of the plane's systems to ensure they're able to function as one. The aircraft is being built by modifying a baseline Italian Tecnam P2006T aircraft, adding an electric propulsion system that features lithium-ion batteries and 14 electric motors and propellers.

Top 7: Airlines face competition dilemma on sustainable fuel.

Sustainable Airline Fuel (SAF) has become a buzzword in the aviation industry, with airlines willing to get on board with sustainable alternatives. However, meeting potential regulations over SAF could be a challenge due to current cost and capacity constraints. Scott Kirby, CEO of United Airlines, compared the cost issue to the early days of wind and solar energy, which drove massive investment in R&D, drove economies of scale, and today it's cheaper to produce a megawatt of electricity from wind and solar than it is from fossil fuels. Airlines are receptive to implementing SAF, but federal dollars have to be a part of the picture. The industry target in the U.S. is 10 percent by 2030.?The U.S. Department of Transportation's Bureau of Transportation Statistics show that scheduled service airlines used nearly 1.5 billion gallons of jet fuel in December alone, making it difficult for airlines to acquire SAF. This is due to competition between other sectors for the fuel, as the same plants used to make SAF are also used for ethanol, other forms of biodiesel and food for livestock. The government and commercial firms alike have thrown billions at the problem, and there is promising research in the potential for other types of biomass to be used to power jets. The qualification process for new fuel pathways can take up to seven years, and not all companies survive the process. However, Andre Boehman, professor of fuel science and materials science and engineering at the University of Michigan, argues that it is important to act now to reduce CO2 emissions, as it can displace petroleum immediately.

Top 8: Decarbonization: The long view, trends and transience, net zero.

Nat Bullard's annual effort to capture the state of climate and decarbonization: how we got to now, where we are going, what's new, and how to think about what's next. Amazing slide deck; simply eye-opening!

Top 9: Passengers should pay an emission levy based on the airfare instead of travel class, new study finds.

Allocating passenger aircraft emissions using airfares rather than travel class would give a more accurate idea of individual contributions. This would benefit efforts to address climate change by encouraging people on all budgets to find alternative modes of transport, and increase estimates of corporate emissions. Additionally, a tax that is proportionate to the price of the ticket could make the total costs of flying fairer, encouraging people to seek alternatives. The authors used a dataset from the USA to test their fare-based allocation approach to reduce airline emissions. They used the Airline Origin Survey database to calculate the distribution of ticket prices across all passengers on a typical flight, and compared the results with estimates from widely used emissions calculators. They estimated how a carbon tax on emissions would affect travellers, and found that a tax on emissions calculated from airfares had a more equitable effect because it reduced flying more evenly across income groups. They hope to effect policy change in calculating and taxing passenger emissions to ensure travellers on all budgets are encouraged to seek other forms of transport.

Top 10: UPS Partner Ameriflight Blows $134 Million on Uncrewed Aircraft That Don't Yet Exist.

Natilus is a company that believes it has everything figured out for uncrewed, autonomous air vehicles, and has already made commitments worth $6.8 billion for 460 autonomous cargo aircraft. The lineup comprises four variants, called Natilus 130T, 100T Nordes, 60T Alisio, and 3.8T Kona, and should be capable of flying themselves with cargo weighing between 4.3 and 143 metric tons. Ameriflight, America's largest Part 135 carrier, has placed an order for 20 Natilus aircraft valued at $134 million. The order is for the smallest remotely piloted drone called Kona, which can carry 4.3 metric tons of cargo to distances of up to 1,035 miles and at speeds of 253 mph (407 mph). Ameriflight made no mention of when the Konas will become available for duty.

Top 11: Joby prepare for mass production of its eVTOL

Joby Aviation has begun final assembly on its "company-conforming" eVTOL, which is expected to begin flight testing in the first half of this year. The technological milestone comes a week after Joby completed the second stage of a process with the Federal Aviation Administration to achieve type certification for its aircraft for commercial passenger use. To achieve production certification, Joby had to put in place an intense quality management system and regular FAA reviews. The aircraft will be the first one produced at Joby's pilot manufacturing facility in Marina, California. Joby is currently in the market for a location for its Phase 1 production facility and is actively reviewing proposals from a number of states keen to boost manufacturing and create jobs.

Top 12: Joby achieves important certification milestone

Joby has completed the second of five stages required by the Federal Aviation Administration (FAA) to certify its eVTOL aircraft for commercial passenger use. The company is the first eVTOL company to reach this milestone, having also been the first to complete stage one and have its Certification Basis published in the Federal Register. Joby has also made substantial progress in the third stage of the certification process, with four area-specific certification plans (ASCPs) submitted to the FAA and the company's first equipment-level qualification test plan submitted. Joby considers the second stage essentially complete, and is one step closer to its target of launching commercial passenger service by 2025.

?? [VC] Transactions, Partnerships, and Other Deals & Figures.

FUNDING

Moya Aero raised $2 million for development of its eVTOL

Regent Seaglider raised undisclosed amount from Japan Airlines

TCab raised $15 million to develop its eVTOL prototype

SkyFly eVTOL raised undisclosed amount from Oriens Aviation

Dovetail receives grant to develop electric propulsion unit

Ionblox increases funding to $32M led by Lilium > more on this round here

ORDERS

3Points signs LoI for 25 of Doroni eVTOLs

Ampaire signs LoI to upgrade 27 of Azul's regional fleet

Ameriflight signs LoI for 35 cargo drones from Sabrewing

Ameriflight signs LoI for 20 Natilus autonomous feeder cargo

PARTNERSHIPS

Airbus enters into strategic partnership with Eaton and Crouzet

Lilium enters into strategic partnership with Aeronamic

Skyway enters into strategic partnership with Moonware

Aura Aero enters into strategic partnership with Thales

Air enters into strategic partnership with SeaKeepers

ZeroAvia enters into strategic partnership with Shell

Embraer enters into strategic partnership with Air New Zealand

?? End Note.

I hope you enjoyed Kolin’s AeroTechPulse. The next edition will be published soon-so stay tuned and hungry ??.

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Cheers,

K

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