The Future of Advanced Air Mobility

Roland Berger Sees UAM Investment Slowing but Long-term Progress Assured

Roland Berger’s Center for Smart Mobility projects a $90 billion market for urban air mobility (UAM) aircraft over the next 30 years, as global populations continue to gravitate toward cities. Addressing a conference on October 22 organized by the German state of Bavaria’s U.S. Offices for Economic Development, the European transportation consultancy’s principal Stephan Baur said that while the fallout from the Covid crisis has led some companies to withdraw or scale back investment in the new sector, it will continue to advance.

“One of the key questions that's on the table right now is what does Covid-19 do to all of this?" asked Baur. He predicted the crisis would not result in a “fundamental slowdown” of governments’ certification and regulatory work or any weakening of demand for the mode of travel by the public.

“We are seeing the devastating effect that Covid is having on the traditional aerospace industry. So, what about UAM? The short answer in our opinion is, it does not really matter. It does not really affect the development of UAM,” Baur said while acknowledging that the pace and scope of the nascent industry’s explosive launch could now be somewhat tempered.

“Of course, it is a means of transportation that allows more social distancing than other public transportation. So that could be a trigger for the market. [However], there is a risk that some of the investment required may be reduced,” added Baur. “We are seeing some signs of this happening at Boeing, we are seeing some signs of this happening at Airbus if we look at the classic legacy OEMs. It can also happen with the startups but if you look at some of the larger promising startups, they all have secured financing even during Covid.”

Nonetheless, barriers to market entry can prove difficult to clear, and Baur presented “building blocks” that aspiring UAM players will need to participate. First, he said, use cases, partnerships, and a convincing business concept all contribute to commercial feasibility. Second, market entrants need to convince people to want to use UAM and accept their operation over their homes and into nearby landing ports, for example. Achieving certification represents the next challenge, followed by industrial feasibility, or an ability to maintain a sustainable business model.

Meanwhile, infrastructure development presents a particularly high hurdle in the development of a UAM ecosystem.

“It’s really a system of systems that needs to be put into place,” said Baur. “And this system of systems, of course, in its center consists of the eVTOL vehicle, but it also consists of the MRO services needed in order to safely operate these vehicles. It consists of the physical infrastructure like, for example, vertiports, then also digital infrastructure, meaning everything which is needed for navigation but also for ticket booking and [organizing] flight operations.”   

While with enough investment, development to a UAM system appears able to overcome virtually any physical challenge, its success will ultimately hinge on public acceptance, said Roland Berger senior partner Manfred Hader.

“What really emerges is that the topic of public acceptance is the one that will drive or slow down or actually stop development of urban air mobility,” he explained. “It’s going to be the biggest hurdle that needs to be overcome, which basically means the general public needs to want to hop on an eVTOL and fly around with it.”

Baur listed safety, noise, utility, and ability to integrate into the traditional transportation system as the basic elements of public acceptance the fledgling industry must consider.

“And the whole thing needs to be, of course, user-centric, which means, in the end, it needs to be open to the larger public” noted Hader. “One of the keywords we're hearing is UAM needs to be democratized. [That] means that beyond the development of technology, companies now are working together and they have to work together in this to actually create awareness for the product and ensure that public acceptance will be there when the product will be there.”

The southern German state of Bavaria has emerged as a hub of UAM development. It is home to eVTOL aircraft developers Lilium and Volocopter and several other technology startups in the field.