GENERAL AVIATION Urban Air Mobility
Making money out of air
Fleets of electric flying taxis are predicted to revolutionise the future of city transport but will they make money? In Part 2 of a report on the urban air mobility market, BILL READ FRAeS examines the economics of passenger-carrying eVTOLs.
Within the next decade, it is predicted that the introduction of eVTOL electric taxis as an alternative to existing ground-based transport systems will revolutionise urban air mobility (UAM).
According to some sources, the first operational flights are only a few years away. NASA envisions initial UAM operational testing in 2021, followed by the first commercial operations in 2024 and operations in urban peripheries by 2026. Consultancy Oliver Wyman predicts that the first UAM commercial flights could start by 2023, followed by initial public routes in 2025 and large scale operations by 2030.
After that, according to some forecasts, the sky will be the limit. A study from consultancy Roland Berger (Urban Air Mobility – The Rise of a New Mode of Transportation) estimates that, by 2050, 98,000 passenger drones will be operating in around 100 cities.
Reality check
Just how realistic are these predictions? Will the city skies soon be filled with flying taxis or will they go the same way as the very light jet (VLJ) which was predicted to revolutionise the air taxi market earlier this century? How many of these hundreds of eVTOL designs are likely to actually make it into public service and how long will it be before they are seen carrying farepaying passengers over cityscapes? Even more importantly, will they make money for their air taxi operators?
Survival of the fittest
The first issue is the practicality of the multiple eVTOL designs under development. Before being introduced into commercial passenger-carrying service, UAM developers face a number of challenges. “Many of these designs are only sketches and dreams – only around ten are serious players,” declares Guillaume Thibault from consultancy Oliver Wyman.
Safety and control
The next challenge is that of safety. While UAM designers may be able to conduct successful test flights in sunny, calm and unrestricted airspace, how will they cope with operating in unsettled weather, between tall buildings and sharing airspace with multiple other users?
“Safety is a vital factor,” states Anthony di Nota from Oliver Wyman. “Competent authorities will not certificate an aircraft that they do not consider to be safe carrying passengers. It would only take one accident to ground an entire city UAM service”.
Because of the need to convince regulators that eVTOLS are safe for passenger transport, it is expected that the initial aircraft will be fitted with hybrid-electric rather than all-electric engines. Some OEMs are also planning to fit all-vehicle parachutes, as are already fitted to some GA light aircraft. Seats in UAM vehicles may also have to be fitted with helicopter-style impact-resistant seats.
Safety regulators are also expected to require that the first UAMs will have pilots but the longer-term aim of UAM designers is that air taxis will be flown autonomously without the need for a human controller – operating effectively as large passenger-carrying UAVs. “As confidence builds up over time, then autonomous vehicles can start to be introduced which will increase safety and enable larger number of vehicles to fly,” says Guillaume Thibault.
Scalability
The second issue is that of scalability. While the advent of new design software and composite and 3D printing manufacturing and design techniques has made it much it much easier for small companies to develop new prototype designs, such techniques may not be so suitable for producing hundreds or such vehicles for a mass market.
Environment
One of the most important factors about air taxis is that, if they are to operate as part of a public transport service, they will need the creation of a completely new infrastructure to operate in, as well as new regulations, air traffic control systems and public acceptance. An overview of these challenges was presented in Part 1 of this article ‘Creating a new world’ in the November issue of AEROSPACE.
Development costs
The fourth problem is that development timescales and costs for eVTOLS may be far higher than manufacturers realise. “If UAM developers experience similar development and certification costs as those faced by OEM helicopter manufacturers, then development will take around six years and cost £2bn,” cautions Anthony di Nota. “UAM manufacturers will need to be well funded by backers who are willing to take a long-term view before realising their investment. They will have to rely on more than just optimism but also be able to understand all the other factors that will be needed to achieve flight certification.”
UAM monopoly?
Once it is up and running, how would a UAM service be owned and operated? Present predictions suggest that the eVTOL air taxi fleet will most likely be controlled by a single operator using a single type from one manufacturer while vertiports may be owned and operated by state or commercial organisations.
Economics
Another crucial issue will be that of economics. Like any business, UAM operators will need their air taxi service to make money. So also will skyport operators, ATM providers, vehicle support and maintenance staff and all the other stakeholders in the UAM service. “The introduction of UAM is not just about generating business for the platform manufacturer but is also a large economic generator for many other sectors, such as infrastructure and service providers,” comments Guillaume Thibault.
Better than helicopters?
Because the UAM concept is so new, business models are still being worked out. The closest equivalent to air taxi services currently available is the experience of helicopter operators flying from inner cities to airports. Uber is using helicopters to test its Elevate Cloud Services (ECS) systems platform which it plans to use future for UAM services. The Uber Copter helicopter taxi service, which links downtown Manhattan in New York city with JFK airport, is currently testing UAM systems in ‘shadow mode’ operating in the background on an existing approved route. Uber is also using the helicopter service to test a number of apps which will also be used for urban air mobility systems.
Premium or mass transport?
Where will the demand for UAM services come from? Will customers use UAMs as an alternative to land transport or will there be a completely new induced demand for using a service that didn’t exist before – as has already occurred with UAVs and mobile phones?
Another question is how large will the eventual demand be for using air taxis? Futuristic concept art from UAM manufacturers and skyport operators hint at swarms of flying vehicles transporting thousands of aerial passengers. Some speakers at the recent GUAS 2019 conference predicted that the introduction of large scale UAM systems could have the power to transform the way cities look and operate in the same way that they were transformed by railways and roads. Uber Air envisions a future involving large-scale fleets of UAMs operating between skyports which could handle up to 1,000 landings per hour.
However, not all experts think that UAM will become a mass transportation service. “It’s like an eyedropper in an ocean,” says Anthony di Nota. “UAMs are unlikely to replace ground transport as long as they can only carry four people. The only way that UAMs could make a real impact on urban transport is if there were many more of them or they could carry many more people. However, larger vehicles would be like helicopters which are expensive to own and operate.”
Time is money
As every eVTOL promotional video will tell you, the two key elements of using an air taxi is that it will be quicker to fly across a city in an autonomous eVTOL than using a land-based taxi or public transport.
However, while the actual flights will be faster, there are questions to be asked as to how much time will be taken up at the beginning and end of a journey. Having pre-booked their eVTOL flights, passengers will need to get to their departure skyport. Ideally, these should be located close to airports or city centres but security, safety, town planning, air traffic management, noise and environmental regulations may dictate otherwise.
Once at the skyport location, passengers will need to get to the departure area, which may involve ascending in a lift to the top of a tall building. Once there, it is likely that they have to go through some form of security procedure. “Security is likely to be an issue,” cautioned Anthony di Nota. “Security agencies are likely to want to know the background who is flying in a UAM.”
Weight will also be a factor. Passengers will need to be weighed before they fly – as will their luggage. This could be done discreetly – passengers for helicopter flights are already weighed before they fly. Those passengers with luggage may find that there is no room for it on a small eVTOL which means that it will need to be sent separately. “Luggage will be a big issue,” remarked Guillaume Thibault. “To carry large amounts of luggage will mean giving up a payload seat.” For the actual eVTOL flight, as with long-distance air travel, there may be departure delays due to bad weather, congestion, security issues or unforeseen emergencies.
Once at the destination skyport, passengers may have to board another lift to take them down to ground level, after which they may still have an additional land journey to reach their final destination (and be reunited with their luggage).
However, even if the time savings using UAMs are marginal, some experts do not believe that this is a vital factor. “Speed is only one competitive element, the others being more passenger choice, convenience and reliability,” says Simon Whalley from Skyports. “Not all transport users base their decision on the theoretical speed of their planned journey but whether they can reach their journey destination at the stated arrival time, even if that’s slightly later.”
Utilising your assets
As any low-cost airline operator will tell you, the way to make money is to make the best use of your assets to earn revenue – which is why LCCs use their aircraft on as many flights as possible with minimum turnaround times. However, this approach is not so practical for an eVTOL operator, as current battery technology means that the vehicles will have to spend some time between flights not earning money while they have their batteries recharged or replaced. Demand for air taxi flights may vary during the day both in quantity and routes which means that an eVTOL may sit out of use waiting for a request or have to fly an ‘empty leg’ journey to another skyport where it will need to be recharged all over again.
Another issue is that of payload. Current eVTOL designs are looking at two to four-seat designs. Obviously, the more passengers that are carried on a journey, the more money the operator will make. Uber Air, in particular, is keen on the idea of shared flights, so the ideal passenger load would be four people all wanting to go in the same direction who don’t mind sharing a vehicle. However, in practice, on less busy routes, the air taxis may have to operate with fewer passengers onboard.
There is also the problem of additional weight. UAM operators may be required to install additional equipment into their eVTOLs, such as all vehicle parachutes, heater or air conditioning for passenger comfort or additional batteries or motors – all of which reduces revenue-generating payload.
How much to use that eVTOL?
Given the huge investment costs in both vehicles and infrastructure needed to create a UAM service, plus the daily operating costs, logic would suggest that the cost of flying in an air taxi will not be cheap. At its third Uber Elevate conference in June, Eric Allison from Uber Air said that prices for using an air taxi would initially cost $5.73 per passenger mile (which is less than using a helicopter) but would reduce over time to, first, $1.68 per mile and then eventually down to $0.44 per mile, at which point it would be cheaper to fly in an eVTOL than using a car.
Given these initial high entry prices, this could lead to problems not just recouping money invested but also of public acceptance. City dwellers are less likely to approve of a system which (like helicopter travel) only caters for the well off. However, Bob Pearce from NASA thinks that this situation may change over time: “All forms of UAM will start with the rich but, when it gets scaleable, it will be for all.”
Flying into the future
In conclusion, there are many challenges – technical, regulatory, financial and social – which still need to be overcome before the vision of mass urban air mobility becomes a reality. However, although some of the initial timescales may be somewhat optimistic, flying taxi services seem likely to evolve over a longer period. Current forecasts predict that the first flying taxi services will start in Asia and the Far East and then, if they are seen to be popular and successful, will spread to other parts of the world. “The market potential for UAM is huge but we don’t yet know when it’s coming and we don’t know the scale,” says Clive Lewis from the ADS UAM Group Achieving the Difference.
“We will get there eventually but the companies which succeed will be the ones with deep pockets and a long-term vision,” adds Anthony di Nota. “Within ten years, UAMs are unlikely to transform cities. Within 30 years, then yes, they will.”
A longer version of this article is available at: aerosociety.com. eVTOL Conference – RAeS UAM Conference 2020 24-25 March 2020 – RAeS HQ, London