The technology that will allow an air taxi to operate safely with paying passengers on board is becoming increasingly old news. Now that the engineering challenges of designing, building and flying eVTOLs have been conquered, the discussion has shifted toward certification processes, production decisions, infrastructure development, and investment structure to accelerate innovation within the industry.

Archer is one of the eVTOL companies targeted in recent SPAC deals. Image // Archer Aircraft

Over the past week, the industry has vaulted from an exciting demonstration of the commercial air travel technology of 2030 and onward to an industry on the verge of an acceleration of expansion. Proposed or actual aerial mobility investments and instruments committed to advancing the industry have totaled almost $2 billion USD. While commercial aviation continues to feel the squeeze from reduced air travel, with many opting for private or semi-private alternatives, the concept of democratization of aviation that eVTOLs and aerial mobility aircraft would provide is of such interest that investors are becoming creative in acquiring the necessary capital to move the industry forward. 

While each of four landmark recent deals have varying flavors, they share a key theme: innovative fundraising and a mix of public and private capital to achieve massive valuations with lessened risks than conventional fundraising. We examine these key deals made over the past two weeks that support the massive commitments these institutions are undertaking to drive aerial mobility forward at an even faster pace. 

February brought with it multiple novel applications of the increasingly common SPAC business structure used as an instrument for aerial mobility investment. SPACs are unique in that they exist as an entity to take over another company through merger and acquisition deals – and fundraise using an IPO – hence the colloquial term “blank check company”.

The first example of this type of acquisition was revealed in December of 2020 when BLADE UAM and a blank check company backed by KSL Capital (Experience Investments Corp, EXPC) confirmed a BLADE valuation of $825 million. According to SEC filings, the $400 million USD deal maintains a $125 million cash infusion along with the cash in the SPAC.

Next, Atlas Crest Investment Corporation, among other commitments from firms Stellantis and Putnam, focused their fundraise towards Bay Area eVTOL maker Archer. The IPO was joined in part by an announcement from United Airlines to purchase up to $1 billion USD in aircraft from Archer, which is the largest publicly disclosed eVTOL order to date. While this is the first order announcement from a major airline, other airlines work within the space as well: jetBlue Innovation ventures is no stranger to the aerial mobility investment sector, though they have not publicly joined or invested in any of these companies at time of writing.

Second, Reinvent Technology Partners, headlined by respective LinkedIn and Zynga founders Reid Hoffman and Mark Pincus, took aim at eVTOL magnate Joby Aviation, with a $690 million USD IPO providing the necessary funds to begin the merger process with Joby. The resultant company will maintain approximately $800 million USD in disclosed funding to date.

Third, and finally, ex-Boeing CEO Dennis Muilenberg’s New Vista Acquisition Corporation’s SEC filing indicates a $200 million USD raise from their proposed IPO. It’s not readily clear which company New Vista Acquisition Corporation will target, but trends would indicate that a company such as Volocopter, Lilium, or EmbraerX would be of interest to the Chicago based, recently established blank check firm. 

While none of these investment numbers single handedly reach unicorn status, their magnitude is indicative of the trust that many of these institutions place within emerging eVTOL companies. Further, they represent a nimble implementation of fundraising approaches to accomplish an end goal that may have not been possible with conventional methods in a cash-strapped industry emerging from a pandemic. Both SPACs feature leadership teams that have either previously been involved within the technology industry or that have substantial experience leading aerospace companies.

It’s important to point out that the mechanics of these fundraising techniques substantially offload risk for blank check companies, since their disclosures to potential investors include multiple notices that they have no profits and no current operations. However, the ability for such companies to successfully raise the necessary funds is telling in its own right.

Why it’s important: Aerospace companies require huge capital investments to complete certification and initial production and delivery requirements. The expenses incurred with these types of business activities thereby require sizable investments from outside entities for financing, while the current economic status of commercial aviation is cash sparse. Those with sizeable enough reserves are investing at a low, while others who understand the unique opportunities of this timing are seeking alternative fundraising means to accomplish the same goal. While the ink is not dry for all of the SPAC deals outlined, they foreshadow the trend of future progress toward certification and initial commercial operations. However, without a large enough sample size for comparison, it’ll be at least a year before the manifestation of these mergers can adequately be compared and contrasted with a more conservative approach toward development.

EHang announced on February 8th via press release that it was joining the European Union’s “GOF 2.0 Integrated Urban Airspace Validation” project, a continuation of the SESAR JU GOF U-space project. GOF 2.0 is focused on developing the safe, secure, and sustainable integration of unmanned aerial vehicle (UAV) operations in urban airspace. EHang is one of 13 consortium members, and is reported to have expectations of “ensuring safe flight operations in all degrees of airspace in order to provide fair and efficient access to shared airspace.”

SESAR JU GOF 2.0 was initiated in January 2021 to demonstrate the compatibility of existing Air Traffic Management (ATM) and U-space systems and services. The project intends to show safe integration of Unmanned Aerial Systems (UAS), eVTOLs, and manned operations in a unified, dense urban airspace. The project intends to showcase a number of demonstrations over the next two years that will provide validation of integration between existing ATM technology and UASs and eVTOLs, a recreation of the airspace of the future.

EHang matches with the intent of the project as they aim to establish a comprehensive UAM ecosystem including infrastructure, software and supporting service systems. the steady state goal for the company will be to have its EH216 passenger-grade AAVs gradually accepted for autonomous air taxi services by Air Navigation Service Providers (ANSPs), airspace users, regulatory authorities, and finally the flying public.

Why it’s important: While the challenges of designing and testing flight technology for eVTOL aircraft are disappearing by the day, efforts such as SESAR JU GOF 2.0 showcase the need to continue to flush out the ecosystem of eVTOL integration with existing commercial air traffic. EHang’s participation in the GOF effort allows for a real-world on demand commercial air taxi operator to take part in the exercises of validating the current frameworks for airspace integration of larger scale eVTOL aircraft. Additionally, given the partnership is global in nature, secondary benefits of the undertaking include a more equivalent set of international standards for other eVTOL manufacturers to reference in their own developmental projects.

Source // EHang Press Release

Students at the University of Texas – Austin have been awarded an over $3.5 million dollar grant from NASA to research the future of aerial mobility, specifically with focus toward logistical applications of aerial mobility technology. The award is part of a larger grant of $8 million from NASA that includes involvement from UT Austin, Purdue, MIT, Morgan State University, and industry partner Cavan Solutions.

One of the primary focuses for the award is to develop and test a model that simulates the cost and scalability of autonomous aerial mobility operations, to further supplant assumptions and market surveys which indicate the the economic proposal for using air cargo drones as a stepping stone on the path toward on-demand commercial operations is a wise idea. In addition, the intermediary technological development step (logistical applications) maintains massive market potential as well.

The Oden Institute for Computational Engineering and Sciences at UT Austin was awarded a grant for hypersonic research in December of 2020 prior to NASA’s grant for Aerial Mobility research. Image // UT Austin

“Public concerns such as noise pollution, privacy or perceived risks of autonomous operations are usually addressed in a post-hoc analysis,” said lead investigator Ufuk Topcu, professor of aerospace engineering and engineering mechanics and director of the Autonomous Systems Group in the Oden Institute. “This approach is not only costly but tends to have limited impact. We are using mathematical models to represent public concerns that characterize their relative importance with other factors in the overall process.”

It wouldn’t be obvious, but there are unique aspects of aerial mobility modeling that have been further emphasized in a society living amongst the COVID-19 pandemic. For instance, package deliveries have increased drastically, and options for contactless drop off and pick up of goods have skyrocketed. What’s more, in many cases staffing levels can barely maintain the deluge of required deliveries, and an option such as on-demand aerial mobility aircraft to take over some of the burden is quite attractive. However, with the increased number of delivery aircraft flying in any given city, faculty and students at UT Austin have stated that they intend on adding flight path routing constraints which regard certain paths with varying levels of desirability, those being less impactful from noise and footprint standpoints besting other options that may fly lower over a hill or directly over areas of higher population density.

Why it’s important: NASA’s funding will allow for increased efforts to effectively and accurately model the impacts of aerial mobility. These research projects should aid in closing economic trade studies on the path to on-demand commercialized aerial mobility, with logistical applications of similar aircraft representing the intermediate step toward achieving passenger carrying flights.

Source // UT Austin Press Release

Airbus Helicopters announced in a press release on January 22nd that it has started in-flight tests on board its Flightlab, which Airbus describes as a “platform-agnostic flying laboratory exclusively dedicated to maturing new technologies”

A priority of the FlightLab is reportedly the dual application of the technologies being tested onboard: both for today’s helicopters to become more advance and in the long run for aerial mobility aircraft to leverage.

Testing subjects include hybrid and electric propulsion technologies, autonomous systems, and other technologies that are aimed at reducing helicopter sound levels or improving maintenance and flight safety.

Airbus’ CityAirbus eVTOL Design

Bruno Even, Airbus Helicopters CEO characterized the motivation for this project: “Investing in the future remains essential, even in times of crisis, especially when those innovations bring added value to our customers by targeting increased safety, reduced pilot workload, and reduced sound levels. Having a dedicated platform to test these new technologies brings the future of flight a step closer and is a clear reflection of our priorities at Airbus Helicopters.”

Airbus shared that flight tests commenced in April of 2020, when the demonstrator was used to measure helicopter sound levels in urban areas and to particularly study how buildings may affect people’s perception. First results show that buildings play an important role in masking or amplifying sound levels and these studies will be instrumental when the time comes for sound modeling and regulation setting, especially for Urban Air Mobility (UAM) initiatives. Testing was pursued in December to evaluate the Rotor Strike Alerting System (RSAS) aimed at alerting crews about the imminent risk of collision with the main and tail rotors.

The Airbus Flight lab seen in flight

Tests this year will include an image-detection solution with cameras to enable low altitude navigation, the viability of a dedicated Health and Usage Monitoring System (HUMS) for light helicopters, and an Engine Back-up System, which will provide emergency electric power in the event of a turbine failure. Testing on the Flightlab will continue in 2022 in order to evaluate a new ergonomic design of intuitive pilot flight controls intended to further reduce pilot workload, which could be applicable to traditional helicopters as well as other VTOL formulas such as UAM.

Why it’s important: Airbus is electing to advance the development of their enabling eVTOL and UAM technologies using the FlightLab testbed, arguably an approach that will allow for more rapid maturation of the onboard equipment than would be possible on a concept air taxi, given that the H130 is already a certified aircraft and will allow for flight path control and airspace integration variables to be isolated while testing can focus on specific operational functionalities of Airbus’ proposed onboard suite of eVTOL equipment.

Volocopter announced on January 15th that the Federal Aviation Administration (FAA) has accepted their application for concurrent Type Certificate validation which they submitted earlier in December. This sets the basis for Volocopter to bring their electric air taxi services to the American market.

Volocopter is the first and only electric vertical take-off and landing (eVTOL) company in the world with Design Organization Approval (DOA), which gives them license to develop and build certified aircraft from the European Union Aviation Safety Agency (EASA). The company is currently in the process of receiving EASA Type Certification for their multi passenger VoloCity aircraft, and is now concurrently seeking FAA approval to enter the U.S. market with its EASA type certificate in order to accelerate its worldwide expansion.

Volocopter stated in a press release that they’re focused on promoting seamless, 100% electric mobility within congested cities, and have engaged in partnerships with Singapore, Paris, and Dubai as global pioneer cities for the aerial mobility industry.

Volocopter’s Initial 2X Prototype (depicted) was replaced with the next design iteration, the VoloCity, the company’s prime aircraft for future air taxi use. Image // Volocopter

“By focusing on a collaborative approach to success, we are bringing excellence, expertise, and experience to the table together with our partners, and with that, we are leading the way to bring urban air mobility to life in cities around the globe,” said Florian Reuter, CEO of Volocopter. He added that certification was a primary consideration for Volocopter while creating their aircraft, and that design considerations took into account requirements of certification. Ideally, this will allow a quicker timeline to certification once flight testing and data collection efforts become required.

The VoloCity, Volocopter’s electric air taxi, is designed to meet the highest aircraft safety standards and features the lowest noise development in the industry. Volocopter developed the VoloCity specifically to meet growing demand for better intra-city mobility in large cities like Los Angeles, New York City, San Francisco, and Washington D.C. among others. Volocopter added that these types of aircraft would promote job creation in deployment cities and that the ultimate target is on-demand air taxi services that are of comparable costs to a traditional taxi.

The Volocopter VoloCity, which will be Volocopter’s featured aircraft for air taxi use.

Volocopter is currently working with EASA on certification for commercial launch planned in the next 2-3 years. When Volocopter receives type certification approval from EASA, immediately followed by the FAA validation in this timeframe, they will be positioned to enter the electric air taxi market and pave the way for the UAM industry to expand services globally.

Another component of this certification announcement from the FAA is the availability of concurrent type certificate validation. Concurrent type certification validation allows Volocopter to show compliance to their regulatory governing board, EASA, whereby the FAA would then claim concurrent credit for these activities. What’s not known is how the FAA will either honor or create additional requirements to the Special Conditions for eVTOL certification that EASA has created, given VoloCity will be an aircraft of novel configuration without an similar comparator that has previously been certified.

Why it’s important: The FAA’s agreement to allow for concurrent type certificate validation reduces a huge amount of certification workload for Volocopter and will pave the way towards an FAA certified aircraft in the coming years. The industry should now expect many European eVTOL makers to follow a similar path, though EASA concurrent type certification of FAA natively certified aircraft has not yet come to fruition.

Aircraft such as Airbus’ Zephyr serve as great examples of how avionics technology for experimental aircraft can be applied to aerial mobility.

The Zephyr is a solar-electric, stratospheric UAS, meaning that it can fly high enough to avoid most weather, but while staying in enough atmosphere to remain aloft from lift only. The aircraft relies on solar energy, and has a wingspan of 25m. Batteries charge during the day from solar panels integrated into the wings of the aircraft, which allow the aircraft to remain in flight for a staggering 25 days, 23 hours, and 57 minutes. Such an airplane requires extremely light and efficient components to enable such long endurance figures, and the Zephyr team needed to include a certifiable transponder, ADS-B, and GPS package that met global airspace requirements all while having a having minimal size, weight, and power consumption.

Paul Beard, Founder and CEO of uAvionix, characterized the integrated ADS-B and GPS system: “every gram and milliwatt has to earn its way onto the platform for customers like Zephyr. The combined weight of the ping200X transponder and truFYX GPS is only around 70 grams and consumes less than 2 Watts of power while providing high power (54dBm), high integrity transmissions of ADS-B and transponder mode data to Air Traffic Control (ATC) and nearby, suitably equipped aircraft.”

Visualization from uAvionix of their lightweight ADS-B receiver. 

UASweekly.com shared a summary of the contextual integration of this sort of avionics technology on their website recently: “Earlier this year, the FAA published its Upper Class E Traffic Management (ETM) Concept of Operations (CONOPS).  Operations in upper Class E airspace have historically been limited due to the challenges faced by conventional fixed-wing aircraft in reduced atmospheric density.  However, recent advances in power and propulsion technology, aircraft structures, flight automation, and aerodynamics have increased the number of vehicles like Zephyr that can operate in this environment.  The utilization of traditional aviation technologies such as ADS-B and Mode S transponders are a key component of this CONOPS to allow for interoperability with existing Air Traffic Control (ATC) infrastructure and Traffic Collision Avoidance System (TCAS) avionics.’

Why it’s important: Companies like uAvionix, which are producing incredibly lightweight, capable ADS-B and GPS technology, are poised to fare well for plug-and-play avionics applications to a portion of aerial mobility aircraft that are currently in development. Of special consideration in this instance are these devices’ relatively high level of functionality for just a few grams of weight. While some aerial mobility companies are vertically integrating their avionics tech, precedent shows that a portion of companies approaching majority will elect to utilize already certified and flightworthy avionics packages, such as those being developed by uAvionix.

While aerial mobility identifies as an environmentally responsible solution to the intracity and short to medium range intercity transportation for the future, those most familiar with the industry will also commonly cite tertiary applications (such as emergency medical response and logistical applications) which are already in use. These secondary applications may not be as immediately evident as passenger air transport – but the uniqueness of their operational requirements has actually allowed for their prevalence to outpace that of commercial on demand air travel.

Six Ways Drones Are Revolutionizing Agriculture – MIT Technology Review

Consider the agriculture industry of today and 50 years ago – similar to the jet revolution following WWII, today’s modern farms employ GPS guided equipment throughout fields for harvesting, grating, and planting. Additionally, crop dusting aircraft effectively cover huge swaths of land in short periods of time thanks to the advent of commercial grade fertilizer application methods. Additionally, farming equipment, seed, and other items must be transported between adjacent fields, farms, or counties, with many trips (less that of a final harvest) being shorter than 50 miles.

Accordingly, aerial mobility is well poised to address the mixed use case of today’s commercial farming requirements, with transportation of lighter cargo loads and individual passengers as a unique operational case that could reduce total time required for such trips since they could be accomplished in conjunction. It’s likely that aerial mobility aircraft won’t completely address the heavy agriculture portion of the farming industry as the weight of goods transported is too high – but similar to the advent of the crop dusting aircraft years ago, accomplishing similar local to medium range (less than 100 mile) trips would be feasible.

Flight testing of the Astro Aerospace Elroy, which could have future use in agricultural applications.

Other considerations for agro-tech applications for aerial mobility include maintenance and operation hubs for such aircraft, as well as ownership schema. It’s likely that large commercial farming companies would purchase and operate aerial mobility aircraft on their own, but for smaller farming operations a collective ownership agreement may be the more likely route towards ownership. In such an arrangement, a commonly equipped aerial mobility aircraft could be leveraged by multiple farms to allow for on-demand uses, whether they be for passenger, cargo, or mixed transport. These ‘air taxis’ might also feature interchangeable interior configurations (similar to swappable batteries in aerial mobility aircraft that reduce charging time) to quickly and easily alter configuration from passenger carrying to mixed to cargo use.

Why it’s important: While drones and small unmanned aerial systems are becoming increasingly prevalent in commercial and larger scale agricultural operations, aerial mobility aircraft may emerge as a larger and even more environmentally friendly option within 10 years, especially if mixed configuration aircraft are available and smaller agricultural operations can leverage the benefits of fractional ownership. While current agricultural applications of eVTOLs are sparse just as GPS guided fertilization and harvesting machinery were 20 years ago, continuing improvements to their design will likely close the gap to make aerial mobility operations successful and valuable within commercial agriculture.

This article, written by Dean Donovan, was originally published on Forbes. Shared on TransportUP with permission.

It’s official: Joby Aviation is buying Uber Elevate. The electric air taxi developer will integrate the Uber Elevate team into its core operation; Uber and Joby will expand their partnership to provide a seamless multi-modal experience and share data on how to provide the right services to customers; and Uber will invest $75 million into Joby, which is on top of its previously undisclosed $50 million investment in Joby’s Series C financing round in January 2020.

This move should support Joby’s strategy of both building a new type of electric aircraft almost entirely in-house as well as operating an airline. Elevate should also give Joby unparalleled competitive and ecosystem intelligence into some of its competitors given that Elevate had engaged Hyundai, Pipistrel, Jaunt Air Mobility, Bell, Signature Flight Support and Chargepoint, among others, as partners in the aerial ride-sharing network that Uber had planned on building. Most industry observers believe that Uber Elevate has built a high-quality group that provides access to arguably the most well-thought through network planning effort in the industry. This could provide benefits in market selection, scale-up and asset utilization of an airline.

Joby is taking a different approach than exists today in most mobility related industries. Over the last few decades, truck and airplane manufacturers have tended to decrease their level of vertical integration to improve capital efficiency and utilize specialized skills developed in the supply chain. Joby is not alone in this break with the recent past. Lilium has also announced plans to forward integrate into air taxi service. Volocopter, the German autonomous aviation company, has launched an air taxi service called Volocity and is aiming to begin operations in Singapore. At the same time, other players in the air mobility space like Jaunt Air Mobility and Bye Aerospace have opted for a leaner, less vertically integrated approach. Will one approach trump the other?

This isn’t going to be cheap

New aircraft programs cost a lot of money to move through certification. On the commercial side of the market, a new narrow-body aircraft could cost $10 billion to $15 billion and can take 10 years or more to bring to market. At the Revolution Aero conference earlier this month, Lee Human of Aerotec, a leading consultancy in this space, suggested that vertically integrated eVTOL (electric vertical takeoff and landing) programs would likely require $3 billion to move through certification alone.

Technological innovation creates certification timing and cost risk. eVTOL aircraft will have systems that look fundamentally different than most of today’s small aircraft including, eventually, the provision for autonomous operation. The Eclipse 500, a program that pushed the edge of the technological envelope to pioneer the very light jet (VLJ) category, has become emblematic of the risks of a technology forward approach. The program started in 1998 and only received certification in mid-2006 partially due to a requirement to re-engine the aircraft mid-stream. The first deliveries came in 2007, almost 9 years after the start of the program. The company ultimately ran out of capital due to cost overruns associated with the delays and the 2008 recession.

Setting up a scale commercial carrier will add another layer of capital needs on top of the certification costs of the aircraft. JetBlue raised $128 million to finance its start-up with two planes, and Volaris, now the largest low-cost carrier in Mexico, raised a similar amount to start with four aircraft. However, new commercial operators have the advantage of a well-developed leasing market that allows them to finance new aircraft at attractive prices. They can also slot right into the existing commercial aviation airport infrastructure with limited initial capital investment.

Starting an eVTOL-based air taxi service at a similar scale could cost much more. Given the relatively small capacity of these new eVTOL aircraft (typically four seats or less), to have the same seat capacity as JetBlue or Volaris on start-up one of these new operations might need 70 to 140 aircraft. At $1 million per aircraft that would be $70 million to $140 million in acquisition costs. Given the unknown lifecycle of these new aircraft, financing that via an affordable leasing program seems unlikely. Aircraft acquisition only represents a part of the total expense, which will include start-up expenses, inventory, route development and other overhead costs. In addition, these air taxi services will need to find new investment for charging infrastructure, terminal infrastructure, maintenance facilities etc. Growing the model would require even more capital for aircraft and for developing new routes, which can take 9-12 months to ramp to profitability in commercial aviation.

Put this all together and it may take $4 billion or more to fully develop a vertically integrated business in the UAM space. That business case will come with potentially high variability in terms of timing and cost that investors will need to plan around. Of course, the rewards of pioneering what Morgan Stanley predicts could become a $1.5 trillion market could make those risks more than worthwhile.

Historical Precedents: “We are the Uber of Aviation…”

Elevate ensured that the UAM space lives in a giant shadow cast by the analogy of Uber’s auto ride-sharing model. Uber took a cottage industry, the taxi business, professionalized and modernized it. Ride-sharing models utilized a contract workforce that knows how to drive and brings its own assets. It took the suboptimal taxi user experience and improved it dramatically, while simultaneously reducing the cost of service significantly through smart network management. Not surprisingly, these factors led to the rapid growth of demand and an asset-light business model. It was expensive to build out, but the operating leverage is less than a model that has to buy or finance the assets it took to operate.

Uber tried to build a similar on-demand model for the world of aviation, where it quickly became clear that regulation, labor relations and asset ownership conditions will create a different, less favorable business model.  Some companies have attempted ride-sharing style models in aviation and have run afoul of the FAA. Aviation requires a highly skilled workforce that tends to unionize and scales slowly. The low passenger to pilot ratio will create a pilot shortage if the UAM markets scale in a significant way.  These potential bottlenecks have led most competitors to set autonomous operation goals to enable scalability and manage costs. Carriers must buy their own assets or lease them, if financing is available, and take responsibility for their operations. As a result, vertically integrated UAM carriers will have asset intensive operations.

While it may seem a departure today, aviation and aerospace were vertically integrated in the era where airmail contracts guaranteed significant volume at set pricing. Boeing purchased aircraft engine maker Pratt & Whitney in 1929 and had started United Airlines before subsequently growing it via merger. The guaranteed volumes and pricing from airmail contracts limited Boeing’s exposure to the high levels of operating leverage this strategy created. In fact, those guarantees were so lucrative they led to scandal and eventually the Airmail Act of 1934. That law prohibited aircraft manufacturers from owning airlines and forced Boeing to divest United Airlines and to the spin-out of what eventually became United Technologies (including Pratt and Whitney). Although regional aviation receives some Federal money via the Essential Air Service program, these tend to serve poorer rural areas, not the premium services wealthy urban areas the UAM companies plan to target initially. Unlike Boeing in the 1930s, today’s vertical integrators will need to create their own stable, attractively priced demand to cover their operating leverage.

In contrast, Delta started as a company to solve a specific use case — the boll weevil infestation of the early 1920s. The company built aircraft for crop dusting and then built a crop-dusting aviation service to solve the problem. Designing a solution for a completely new use case feels analogous to the challenge that Lilium, Volocopter and Joby face today. Trying to solve the use case end-to-end via a tightly coordinated team could simplify the challenge. In addition, it is not clear that Lilium could find an air taxi airline customer for its UAM aircraft even if it wanted to do so. The carrier models that could buy and operate these aircraft simply don’t exist today, nor would most airlines feel comfortable operating this type of equipment on their own. To quote David Merrill, CEO of Elroy Air, who has considered building his own freight carrier in addition to the development of the company’s Chaparral autonomous cargo aircraft, “our commercial logistics customers understand the enormous value of our autonomous aircraft in expanding express middle-mile capacity, but many don’t want the added complexity of operating it in the early years.” (My firm DiamondStream Partners is an investor in Elroy Air.)

The Benefits And Risks Of Making An All-In Bet

Ultimately, aviation models usually depend on two things for success: directness of routing to save time, and cost to produce the service (of which the biggest driver is asset utilization). The Elevate team combined with the Uber Partnership, can help Joby significantly in both respects. Via its modeling efforts around UAM network optimization Elevate’s insights can help reduce costs by improving asset utilization of the carrier model. Its practical experience with Uber Copter into how to integrate ride-sharing networks into UAM services to create seamless multi-modal experiences should cut time off customer trips. Based on what we know about stimulation of aviation demand, those two value-adds should help grow the market significantly.

Set against those benefits, stand a few substantial risks. Unlike Boeing’s vertical integration strategy of the 1920s and 1930s, new UAM carriers will find it hard to predict volume early on. Cars represent a formidable competitor. They cost about 37 cents a passenger mile at average occupancy — probably a tenth or less of what UAM services will initially cost. Commuters are highly sensitive to transportation costs and a 22-mile commute each way might cost $130/week via car including parking. At $2/mile, which is the cost for an Uber ride-share today, the same commute would cost about $440/week. At $4/mile, a more realistic initial price for UAM services, it would cost closer to $880/week, although it could be lower in the case of someone who works remotely most days. In an environment where increasing numbers of people work from home and congestion eases, the time advantage of a multi-modal trip based on flights may also decline.

In addition, competition from new forms of fixed-wing aircraft could limit UAM volume, particularly in the early years before urban vertiport infrastructure build outs. Fixed-wing airplanes retrofitted with hybrid-electric propulsion systems should become available about the same time as eVTOL aircraft. These fixed-wing planes could transport passengers at lower cost than the initial eVTOL vehicles due to the greater efficiency of fixed-wing flight, the ability to use existing fueling infrastructure, and their larger number of seats.  These types of operations could also scale more easily due to the higher passenger to pilot ratio.  In commercial aviation, operators that fly smaller, less efficient aircraft often find themselves in the role of developing routes for operators with lower cost, higher capacity planes.

A third concern involves unionization. Given the scale of operations that UAM businesses plan to develop, this industry will most likely have unions that look more like the unions in the regional aviation or the commercial aviation industry than the less unionized charter industry. Pilots unions tend to negotiate contracts that increase the operating leverage of today’s commercial airlines, although some low-cost carriers have variable pay union contracts. As the demand for pilots from electric aviation growth increases, pilot shortages could give unions increased leverage over these businesses. More importantly for the vertical integrators, the unions will probably express reservations about the pace and safety of the transition to autonomous flight technology that the UAM companies will depend on to push costs down and stimulate demand.

Finally, this strategy could create some channel conflict between the vertical integration plays and pure play carriers. Uber Elevate comes complete with a valuable network of partners. Many of these, like the relationship with Signature Flight Support, should translate seamlessly into Joby’s vertically integrated model. However, why should the airframe partners want to support the network of one of their largest and best financed competitors? Even with a carrier strategy, none of the airframe companies with vertical integration plans will have the capital to roll-out these networks globally right away. It will just cost too much. If it is demand and not vehicles in short supply, non-affiliated airlines may choose to use vehicles from manufacturers that don’t compete in their core business.

Partnership strategies can help mitigate some of the risks from operating leverage and labor relations that vertical integration will create. Today, the major commercial carriers purchase capacity from the regional carriers instead of owning and operating those fleets. WheelsUp had a similar kind of operating arrangement with Gama in private charter. While these arrangements certainly have their advantages, the operating leverage will live somewhere in the vertically integrated system and the partners will probably not want to accept the operating leverage without some type of guaranteed volume contract.

Playing To Win

In the end, UAM represents an entirely new transportation model that requires new technology, infrastructure, systems and regulatory frameworks to deliver a cost-effective transport solution with direct connections and a good customer experience. Vertical integration strategies give Joby, Lilium, and Volocopter more control over the levers required to launch in the industry, which could give them, and by extension the entire industry, a better chance of large-scale customer adoptions. However, this strategy also comes with far greater capital requirements, the daunting task of becoming the best at multiple steps of the value chain, and the prospect of channel conflict that slows scaling in their non-priority markets.

The Lilium, Joby, and Volocopter carrier strategies suggest they believe proprietary volume will ramp up quickly. These companies face a chicken and egg problem: To stimulate demand they need the scale, but to pay for the capital required to grow demand also requires scale. When demand is uncertain, playing to win by increasing operating leverage takes vision, courage and deep pockets.

In many cases, the degree of quality for battery performance in aviation equates to endurance: how long a given energy source can power an aircraft. In the aerial mobility industry, a large amount of focus is being directed towards increasing endurance times for energy sources, often by maximizing the efficiency of energy use per unit of time.

Often, endurance and performance are highly related. Australian Flying Car Racing development company Alauda is designing a battery system that identifies performance as the primary design constraint, in lieu of endurance, to allow for their prototype F1 style flying car racing aircraft to perform at the highest levels during the company’s self-created racing series. The result has been solutions that will improve both performance and endurance: Alauda’s design will enable its Airspeeder flying race cars to identify and optimize their battery systems for both performance output (power) and recharge times, and features a modifiable battery system that can be altered per mission requirements.

While the inner workings of the Airspeeder’s battery composition remain proprietary, the battery packs are modular, employing a sliding rail system that locks cells together and to the aircraft’s frame when installed. (Such a design allows for virtually instant “recharge” times, as depleted batteries are replaced by fully charged cells in lieu of being constantly recharged.) The modular system also allows for customization based upon flight leg – when a race or aerial mobility flight doesn’t span hundreds of miles, a smaller sized battery array (i.e. installation of less cells) could allow for a substantial weight reduction, resulting in performance or useful load increases. This option emphasizes the benefits of a flexible design architecture. For example, this same technology could be applied to cargo eVTOLs to increase payload capacity, range, or speed capabilities depending on the mission.

Alauda has underscored that their goal is to advance flight technology in the same way Formula 1 racing technology advanced the automotive industry – by applying cutting edge innovation to racing and allowing for that technology to mature and make its way to commercial applications.

Mock-up an the Aluada Airspeeder in flight

Why it’s important: Optimization of the propulsion system of eVTOLs and aerial mobility aircraft will be one of the most likely contenders for sustained performance improvements following initial certification of eVTOL aircraft for commercial use. Designs like Alauda’s Airspeeder give insight into what propulsion characteristics will be most important when developing and advancing new air vehicles.

Boston based Cleo Robotics was founded by Omar Eleryan to solve the problem of safely conducting inspections in tight confines within harsh environments such as the oil and gas industry, defense surveys, industrial applications, and first responder scenarios. The benefits of the solution to this problem may have much farther reaching benefits than the market that is now served.

As a Mechanical Engineer who worked in the oil and gas industry, Eleryan realized that his passion for flying drones and being involved in aviation might apply directly to the problem that he faced conducting work on a daily basis. This was the genesis of Cleo Robotics, and what is now called the Dronut. The Dronut is a 6″ diameter spherical electric ducted fan drone, scaled up from the original 3″ diameter model. What’s even more impressive than the small scale of Dronut is the amount of technology that Eleryan and his team have packed into such a small vehicle.

The Dronut uses a combination of accelerometers, gyroscopes, and cameras to deflect thrust vectoring surfaces below the ducted fan that guide the Dronut through tight areas to capture imagery of the inside of chemical tanks, or a hostile building. After the imagery is obtained the Dronut returns back to the pre-programmed home base. Dronut features intelligent flight path guidance, meaning that operators can program a pre-defined imaging path which Dronut will follow, in addition to detecting and avoiding obstacles that may conflict with the proposed flight plan. This full technology suite contained within the small drone contains three kew features that could be applied to aerial mobility applications:

1. Flight path importation and route creation – aerial mobility providers could import or upload routes to aerial mobility aircraft via airspace management platforms that an aircraft would then follow to the destination.
2. Collision avoidance – while the flight plan is the recommended guidance for the aircraft, potential traffic conflicts could be avoided using detect and avoid (DAA) technology.
3. Thrust vectoring – possibly the most impressive feature of Dronut is the solution to the decades old problem of thrust vectoring of electric ducted fans. While many previous designs required multiple EDF’s to stabilize the vehicle, resulting in a tripod configuration, Dronut only needs one thrust vector that is smartly redirected by the vectoring surfaces mounted to the outboard perimeter of the ducted fan.

The Cleo Robotics Dronut’s charging station and controller

Additionally, Dronut’s cameras that provide the imagery capabilities required for conducting inspections could be used for tertiary purposes as well, including concurrent aerial imagery during commercial aerial mobility flights, or traffic monitoring and data sharing with other aircraft operating in nearby airspace. These capabilities have been recognized already, as the company received the AUVSI XCELLENCE Award and the New England Innovation Award for Robotics, both in 2020.

Why it’s important: Cleo Robotics has developed an integrated software and hardware package, one that’s particularly powerful since the required volume is small and the weight is low. These are key factors for effective aerial mobility aircraft that will require larger useful loads in order to carry fare paying passengers, medical transports, or other goods. While the company is currently focused on commercial applications of the Dronut, the intellectual property of the integrated autonomy package that Cleo has developed might possibly have an even larger value to future customers than the current hardware solution. In the meantime, however, there will likely be no shortage of demand for the current Dronut system, with strong interest from a number of commercial customers.

The General Office of the State Council of the PRC has recently issued a circular proposing to accelerate the strategic development of Urban Air Mobility (UAM) in China. The circular urges to bring the development of UAM into China’s National Strategies and to formulate relevant policies and standards to promote the healthy development of the industry, with the intent being the accelerate the progress of China towards large scale, commercially deployed on demand aerial mobility operations.

The circular also included urges to speed up the legislative process and promulgation of the official Interim Measures for Flights Administration of Unmanned Aerial Vehicles (UAV). These measures intend to to establish a comprehensive regulatory mechanism for UAVs.

The circular also highlights the potential application of firefighting UAVs. It calls for establishing industrial standards and regulations to facilitate technological innovations that will promote industrial and practical applications of UAVs in aerial firefighting use cases – which indicates that companies such as EHang rightly have a seat at the table for these policymaking measures and are lobbying to attain provisions that benefit specific future use cases of the technology.

EHang’s Founder, Chairman and CEO, Huazhi Hu commented on the circular: “This circular issued by the State Council reflects the Chinese government’s great emphasis and strategic support for the new UAM industry. This will undoubtedly fuel the rapid development of UAM in China.”

Why it’s important: Integration of physical hardware on aircraft early on in the design process is crucial, and similarly, integration of policymaking is equally important to generate regulations that actually apply to the industry, are relevant, effective, and efficient in their guidance for deployment of larger scale operations. Where many regulations for fixed wing aircraft were established decades ago, the opportunity with aerial mobility to define again key regulations is a unique chance to create a dynamic but appropriate framework for the future. Authorities such as those in China are working away diligently, as are those in Europe and the United States. In a utopian sense, common regulation across national and continental boundaries would be the most relevant standardization of requirements, but it’s more than likely that differing political requirements and priorities would prevent such a scheme from ever coming to fruition.

Source // PR Newswire

The concept of detect-and-avoid technology is not new or novel – but startup Iris Automation is drilling down to truly focus on what works and what doesn’t in efforts to develop an out-of-box system that’s readily applicable to commercial Part 107 drone operators, fixed wing aircraft, and aerial mobility operations of the future. The company’s mission, to “Make flying safer by avoiding collisions” doesn’t include any specificity as to the means of accomplishing that goal, says CEO Jon Damush. Rather, the company is focusing their efforts on achieving their mission statement with the technology that is most adaptable for commercial drones, today.

CASIA camera and processor system. Image // Iris Automation

At the core of Iris’ IP is their optical motion algorithm that can capture (using computer vision) the relative motion of objects that may be on interference paths with the subject drone/air taxi/etc. This algorithm is unique in that it can determine range using a single focal point. Traditionally, the triangulation of a focal point at a certain distance allows for range determination, similar to how the human eye works. In Iris’ case, though, this process is achieved through their proprietary algorithms that obtain useful values for range after capturing 1-2 seconds of data using a sample rate of around 10 frame/sec. After a trend is established, the Newtonian laws of motion do the rest – and can inform and alert the aircraft which the system is installed on of a collision risk. Such alerts could prevent aerial mobility aircraft to potential hazards and allow for their flight controllers to select an alternative flight path after coordination with airspace management and integration platforms.

Currently, Iris Automation’s Casia Detect and avoid (DAA) system has been implemented largely on commercial Part 107 drone operations for aerial survey and emergency medical response. In the future, this same technology could easily be installed on fixed wing aircraft (after obtaining TSO approval) or could even be used in a reverse configuration, with the camera system installed on a fixed point that then scan known targets to assess any potential interferences by unknown flying objects in a confined area. Iris CEO Damush also emphasized in an interview with TransportUP that another benefit of Iris’ technology is the ability to allow a single operator to effectively manage multiple aircraft concurrently, as attention may be divided while not sacrificing the situational awareness of a potential collision.

An example DAA scenario. Image // Iris Automation

Iris is putting some bounds on their problem statement, as at this time the company is focused on the detection portion of DAA, and not on the interface between the sensed conflict aircraft and the flight control system; largely due to the complexity and variation in flight controller logic, stated Damush. For now, the company is delivering and improving on their Casia system in order to reach a larger range of aircraft, and also hosting conversations with manufacturers early on in the design process to develop integrated solutions where detect and avoid technology enters on the ground floor of clean sheet designs.

Certification of Casia on larger scale aircraft that already maintain type certificates from the FAA or other regulatory agencies would be via TSO authorizations (and eventual STC’s if applicable), but it’s unclear based on the currently available data how likely obtaining these approvals would be – of the total amount of drones registered in 2019 for commercial operations, the number of those then seeking additional BVLOS approval under Part 107 (flight beyond visual line of sight) was a mere 1.8%. BVLOS operations don’t necessary imply long range, rather, any operation condition where the operator cannot directly view the drone they’re operating. Such trends from regulating agencies on the rate of approval and related industry technological preparedness to support such operations are both reflective of technological maturity and operator organization.

Why it’s important: Iris Automation’s Casia detect and avoid system is poised for wider scale applications within the Part 107 drone industry, which boasted over 1.75 million new drone registrations in the year 2019 alone, around 25,000 of which were for commercial application. Aerial mobility stands to benefit from this technology, both from onboard integrated detection systems, and even potential ground-based systems that operate at vertiports to ensure airspace “safety nets” for a given location.

Reportedly, special emphasis is also being placed on National Campaign safety scenarios: autonomous flight, contingency management, including collision avoidance, and flight path management.

Robert Pearce, Associate Administrator for NASA’s Aeronautics Research Mission Directorate, said, “Wisk brings a tremendous amount of experience in eVTOL vehicle development, automation technologies, and flight test, and combines it with a safety-first mindset towards advancing autonomous flight. NASA believes our partnership with Wisk will help accelerate the realization of exciting new Advanced Air Mobility missions.”

NASA’s Advanced Aerial Mobility Initiative aims to accelerate aerial mobility progress. Image Credit // NASA

NASA and Wisk will collaborate to define future means of advancing the aerial mobility industry – while new certification standards might not be defined until they’re officially confirmed by regulating bodies such as the FAA or EASA, the joint venture will allow creation of common engineering design and development standards in order to establish common minimum operable products within the industry, and hopefully propel those that already meet or exceed standards even further. Some of these standards definition areas include flight path management, airspace integration, minimum performance requirements, and general flight procedures.

“Our partnership with NASA will bring together our market-leading expertise in autonomy with the unmatched technical capabilities of NASA,” said Gary Gysin, CEO of Wisk. “The frameworks and recommendations developed through this collaboration will not only advance autonomous passenger flight but also increase the overall safety of aviation.”

Why it’s important: Wisk’s partnership with NASA is unique in that it represents a high-visibility public private partnership to advance aerial mobility between a government organization and a private company. This partnership affords both participants the opportunity to leverage the other’s resources while also mutually benefiting the entire aerial mobility industry. Such partnerships in large scale commercial aerospace are very uncommon at present since the amount of shared intellectual property would lead to eradication of most competitive advantages. While it remains to be seen the level of data disclosure that will accompany this collaboration, hopefully the benefits of NASA and Wisk’s work are able to cast a broad reach among other advanced autonomous aerial mobility development efforts.

Source // PR News Wire

The city of Orlando is making additional investments for the aerial mobility framework of the future. The Orlando Business Journal reported that the Orlando City Commission is preparing to offer a total of $831,250 USD in tax benefits to Lilium over a period of 9 years to engage and attract aerial mobility companies to create an estimated 140+ jobs in the Lake Nona development.

Lilium reportedly was quoted stating that the investment is earmarked towards construction of a 56,000 square foot transportation hub, which would substantiate the job increase figures quoted. This transportation hub would serve as the primary means for aerial mobility operations for Lilium within Florida, and would likely serve other cities and locales with smaller scale “sub-hub” vertiports or individual helipads.

The agreement also underscores another often overlooked component of aerial mobility implementation – the personnel required to run the business. While a key facet of future mobility is ongoing automation of previously manned tasks, the bridge solution between current technological readiness and that of the 22nd century will include humans in the loop for the forseeable next decade, or two. Accounting for and planning the infrastructure for human interaction and operations that interface with the aerial mobility industry (across design and operations phases) is crucial to short-term success that will ultimately allow for mid to long term success.

Not unlike current fulfillment centers, aerial mobility transportation hubs will require personnel to perform quick turn actions to replenish battery packs, conduct maintenance and troubleshooting on aircraft needing repairs, and manage the physical implications of safety stocks of parts and other supply chain considerations. Increasingly, the infrastructure to support these applications is very similar to that of current factories and fulfillment centers, which also represent economic advantages to commercial land owners and developers within local economies.

Why it’s important: Orlando’s agreement with Lilium will provide an economic boost to the area, in addition to more jobs, and emphasizes the importance of human touch-labor for aerial mobility processes today. Bridge solutions will involve human interaction with eVTOL technology for at least another decade, which mean that there is additional opportunity for local economic development and stimulus from the aerial mobility industry prior to any commercial air taxi operations taking place.

Source // Orlando Business Journal