The use of Advanced Air Vehicles (AAVs) in the commercial sector might just be in the start-up stages compared to the defense sector, but in the past year alone it has seen vast amounts of investments with $7 billion in new investments being made in 2021. This more than doubles the investments across the previous ten years, and in the U.S. alone, the industry is expected to be worth $115 billion by 2035 and employing over 280,000 people. We definitely have lift off.
With this sort of development and investment it is no surprise that 63% of organizations attending a recent IFS Advanced Air Mobility (AAM) webinar felt that new revenue opportunities were the greatest potential benefit of AAM for their organization. The market opportunity is clearly compelling!
But despite movements being made by new manufacturers and major OEMs alike to develop and manufacture the next generation of air transport, there are still many regulatory hurdles to overcome to take the next step to full commercialization.
Across the globe, progress in regulatory approvals giving the green light for AAM
Around the world steps are being taken by aviation regulatory organizations and airworthiness certificates are now within reach. In Europe a 2021 assessment from the European Union Aviation Safety Agency (EASA) expects air mobility to become a reality in the next 3-5 years, all being made possible thanks to the ground-breaking developments produced by early leaders in the AAM industry.
In Asia multiple start-up businesses have taken an interest in AAVs and especially Electric Vertical Take-off and Landing aircraft (eVTOL), with some organizations already applying for certifications from the Civil Aviation Administration of China (CAAC). North America having previously seen the FFA focusing on the infrastructure to support AAMs, has released information regarding the design and operation of facilities needed to support eVTOL aircraft initially.
A few major leaps in the right regulatory direction have been spearheaded by Joby Aviation. The organization recently received its Part 135 Air Carrier Certificate from the FAA ahead of schedule, allowing for commercial air taxi operations, which is one of three FAA approvals required to operate AAVs. Furthermore, at the beginning of November 2022, the FAA proposed its criteria for the Joby Aviation Model JAS4-1 eVTOL air taxi aircraft to be certified—providing an example of how eVTOL certification would work in practice.
AAM boosted by sustainability benefits and governments backing societal benefits
Short-haul flights are estimated to account for 17% of total airline CO2 emissions by McKinsey, AAM has the potential to help alleviate these problems with electrification and hybrid propulsion of standard airframes for short haul and regional distances below 800 Nm. There are also positive environmental benefits to be had with AAM replacing other forms of transportation—think unconventional aircraft replacing ground transportation emissions with Urban Air mobility eVTOLs. This emissions-focused view was the number one answer of respondents from the IFS webinar, with attendees feeling the biggest impact of AAM is the potential to reduce greenhouse gases.
Societal benefits are also clear to see. A recent report on transport connectivity by the UK Government revealed that two in three people thought that improved transport links would have a positive impact on people’s ability to access job opportunities. The regional and short-haul advantages of AAM could apply here to positively impact commuting opportunities, but from a cargo perspective it could provide better linkage to rural communities by delivering vital supplies and services to under-served areas.
In the U.S., AAM-specific legislations gained house approval and funding which provided a $25 million grant to support AAM development. Furthermore the Advanced Aviation Infrastructure Modernization Act now allows for planning and building to start using existing airports to establish “vertiports” and associated charging infrastructure but crucially, the legislation aims to include communities in the process bringing new technology and new green jobs to diverse communities.
This all of course comes at a cost. A recent assessment in Sydney estimated AAM ground infrastructure will cost $136 million and another $100 million in low-altitude air traffic control—but the estimated revenue outcome for AAM in Sydney alone is estimated at $4 billon.
Get ahead of the market by starting today
AAM is currently a very disruptive landscape full of start-ups or spin-offs and joint ventures, all racing to be first to market. But AAM organizations will face the same challenges when going from that inflection point of moving from design, proof-of-concept, and prototyping, to commercialization, widescale operations, and ongoing maintenance/support. The lion’s share of the market will actually be grabbed by the companies that can get to mass production the fastest.
As AAMs begin to mature within the commercial aviation industry McKinsey sees adoption on the horizon, firstly, seeing an establishment of an aerospace-grade supply chain and secondly, it predicts an emergence of organizations focusing on operations and ongoing maintenance and support. In order to capture as much market share as possible, it’s likely that many AAM organizations will look to be a “one-stop” shop throughout an AAVs lifecycle.
Software must match the evolution of AAVs throughout their lifecycle to be long-lasting
For organizations and AAVs to be able to move in partnership along their journey it is crucial for software to be the central focus for growth to establish dominance in a maturing market.
A once in a lifetime opportunity has arisen in the AAM industry for businesses to gain a market share with AAM organizations requiring software capable of matching where the organization is along the different points of production or use of AAV assets. As the industry moves beyond “start-up mode” to becoming airborne, challenges evolve around manufacturing, operations and ongoing AAV asset support. It’s also crucial for end-to-end systems to link all the data sources together with stakeholders in the AAM ecosystem. It’s all about uncrewed system design, manufacturing, supply chain, and aftermarket services that need a digital backbone capable of supporting sustainment now and into the future. AAM manufacturers must position themselves with the right strategy and software now or miss out on a rapidly growing market.
Learn more about the software required to capitalize on Advanced Air Mobility market opportunity in this white paper: https://www.ifs.com/assets/enterprise-resource-planning/advanced-air-mobility
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