At face value, 2021 was a hugely impactful year for the nascent advanced air mobility (AAM) sector, which once again seemed impervious to the monumental challenges posed by Covid to the mainstream air transportation industry. The pandemic has now cast its long shadow over our lives for some 22 months since March 2020, and yet in roughly the same timeframe from now, the first eVTOL air taxi services could begin operations in 2024.
The past year yielded yet more hype, garnished by loudly heralded “orders” for eVTOL and eSTOL aircraft in a flurry of announcements that did little to conceal the reality that the vast majority were provisional, with no money changing hands. Nonetheless, the 4,000-plus reported sales apparently passed the smell test of some deep-pocketed investors as evidence of prospective rewards for their risk; and the presence of major blue-chip airlines, such as United and American, among the customer base bolstered credibility.
The past year was also a time of "haves" and "have nots," as a handful of eVTOL front runners achieved Wall Street listing after hitching their wagons to special purpose acquisition companies (SPACs), while many more start-ups sniffed out fresh capital like dogs looking for truffles. According to consultants Roland Berger, the SPAC-backed share flotations accounted for more than half of the roughly $6 billion in fresh investment raised by the AAM sector.
To get a fresh perspective on the industry at the turn of the year, FutureFlight picked the brains of several expert observers. These included Sergio Cecutta, founder of SMG Consulting, which produces the AAM Reality Index; Manfred Hader, senior partner with Roland Berger; Mike Hirschberg, executive director of the Vertical Flight Society; Clem Newton-Brown, CEO of AAM infrastructure group Skyportz; and Darrell Swanson, founder of Swanson Aviation Consulting.
We asked our experts what they feel must happen in 2022 to keep the AAM sector on track to fulfill its potential to transform transportation over the next few years.
Sergio Cecutta called for more tangible progress on the engineering side of new aircraft programs:
"The first thing we would like to see in 2022 is progress towards certification with more OEMs completing their preliminary and critical design reviews, rolling out their conformal certification aircraft, and starting to fly for certification credit with the regulatory agencies.
"On the investment side, I think most of the large players have been very well funded in 2021, so we see fewer deals happening in 2022, with one or two large ones and smaller players receiving additional financial support. On the public-acceptance side, we would like to see more interactions with the public, showing them the aircraft, not a model but the real deal, flying at large public airshows and introducing them to the entire experience (including the vertiport and what it means to go through it) and how it will fit into their transportation choices, life, and cities.
"Finally, I would like to see a more uniform communication across OEMs, similar to what happens in the rest of aerospace, agreeing to specific milestones to take the 'it depends' out of the industry."
Manfred Hader emphasized the need for more diversified investments, the development of an interconnected ecosystem, and more realism and focus on specific use cases:
"Much has been invested into companies that develop the actual aircraft. However, there is still a lot of work to be done in other areas of the ecosystem (e.g., ground infrastructure, like vertiports, charging pads, etc.). We need to encourage investors to place their bets on these building blocks as well, as the industry won't take off if the surrounding infrastructure does not exist.
"We need to further expand the AAM ecosystem and include companies that are currently focused on ground- and air-based mobility. For example, public transportation, ride-hailers, etc., to develop an intermodal and -connected transportation system, which provides a real (time) benefit for the customer. Realistic adjustment of the overall timeline to give the market more credibility. More focus on specific use cases (like the Paris Olympic Games in 2024) to gain learnings. Lastly, get 'the internal house' in order and focus on things that require the acquisition or development of new capabilities, such as rapid manufacturing or supply chain, and operations capabilities."
Mike Hirschberg hailed 2021 as a pivotal year for the AAM sector, bolstered by high levels of new investments, impressive new conditional orders for aircraft, and breakthroughs in flight testing for several new models. In his view, there are plenty more positive steps to come over the next 12 months, notwithstanding the significant challenges that still need to be overcome:
"[The year ahead] will continue this trend, with the best companies attracting the necessary capital to develop, certify, and commercialize their aircraft. Several companies have already gained the initial approvals from the FAA, EASA, and the CAAC [in China] toward certification of their aircraft. There are a lot of other approvals and standards that are necessary before commercial operations can begin, but these are generally on track. According to statements by the companies, these will likely be EHang (2022 by CAAC), Volocopter (2023 by EASA), and Joby (2024 by FAA).
"VFS has nearly 600 eVTOL designs—everything from the silly to the serious—cataloged on our World eVTOL Aircraft Directory, but many of these are either no longer being pursued or never had the financial backing to begin with. A good rule of thumb is the need for $1 billion, 1,000 engineers, and 10 years for an aircraft to reach certification. Many companies are on track for these kinds of numbers, but a vast majority will never be built.
"It is fantastic to see so much excitement and innovation in aircraft design, but enthusiasm is no substitute for hardcore engineering and methodical aircraft development. Anyone who is thinking of an eVTOL aircraft as a scaled-up drone is unlikely to be successful. A more appropriate approach is to consider the requirements for airliners and scale down for size.
"There are a thousand reasons why eVTOL won't be successful but the eVTOL industry is working to overcome every single one of them. VFS has been bringing the community together for the past 18 months to discuss the potential for hydrogen-electric vertical takeoff and landing (H2eVTOL) propulsion. [The year ahead] will see more activity in this area and could be a turning point in solving some of the key technical challenges."
Clem Newton-Brown reflected on what he sees as a blind spot in the industry’s planning around ground infrastructure:
"In 2022, the industry players need to do more work with regulators and governments in every jurisdiction to push them to move more quickly on rules, regulations, standards, and guidelines on new landing infrastructure. There is so much investment and focus on the aircraft yet they will never fulfill their potential if they are simply flying from and to existing airports and helipads. It will take years before the industry can move forward with confidence in building a new network of landing sites.
"I think most people in the aviation industry underestimate the time required to get to the point of being able to build new skyports [or vertiports]. Even with strong political support, it will be a long process to get regulatory changes approved, and there are construction lead times on top of that. It will be way too late to get to the point of type certification of aircraft and then start pursuing skyport infrastructure. It must happen in parallel."
Darrell Swanson shared the concern over infrastructure needs, while also questioning whether the industry has done enough to engage with key stakeholders:
"Public acceptance is the one area that the industry really needs to focus on, as without it we may as well go home. When Ferrovial announced plans to develop 30 vertiports across the UK, Gary Cutts [from UK Research and Innovation’s Future Flight Challenge initiative] suggested that we need to instill social desirability of AAM as opposed to acceptance. Acceptance is likened to ‘well, here it is, you need to accept it.' This is what the aviation industry has traditionally done, and I agree with Gary that we need to promote the desirable traits of AAM while we look to mitigate the undesirable ones.
"If we are able to demonstrate significant time savings, the potential for lower costs through commoditization, and the social and regional connectivity [benefits], we will go a long way toward securing social acceptance.
"On regulation, I think there is a reasonable pathway forward for aircraft but we need better legislation that will allow local authorities to assess future vertiport planning applications. When it comes to investment in OEMs, the industry is cracking on with this with Archer, Joby, Vertical, and soon Eve, so well done. The question is, will SPACs be the way forward for other OEMs that are reasonably mature? We have seen the likes of Ferrovial, ADP, and Urban Blue make announcements on the development of infrastructure, and I know of a few others out there, so I am encouraged by this.
"The question is, will they be able to raise enough capital to fund the investment and what will the spend profile look like. We still need to get certified vehicles with certified production processes, so even an optimistic person would see a slow rollout of vehicles. Couple this with a global market where cities/countries are competing to get the first vehicles and it may take a while before we see significant volumes of vehicles unless the automotive industry is able to wade in and produce aircraft at aerospace levels of safety. I would also call on OEMs to release information about the noise footprint of their vehicles to enable us to help identify suitable sites for vertiport facilities. Noise is one of the most emotive aspects of aviation and the one that is likely to slow the development of infrastructure."
Looking ahead, Hader, Swanson, and Newton-Brown all shared the view that fixed-wing hybrid-electric and electric eSTOL aircraft are set to fulfill as much of their potential as the seemingly dominant vertical lift-and-cruise eVTOL designs, with the prospect of connecting mainland and island communities. Cecutta predicted that cargo and military applications could prove to be among the first deployments of the new aircraft.
While the experts largely took a glass-half-full perspective in seeing 2022 as another year of opportunity for the AAM new wave, there also seemed to be a sense that some bubbles could burst. For instance, Hader pointed to Volocopter’s rumored decision in late 2021 not to proceed with a planned public listing as a precursor to a cooling of the SPAC investment furnace. Both he and Cecutta appear to believe that the next 12 months could see a significant thinning out of this crowded new aviation sector with multiple start-ups withering on the vine for a lack of investment.