Urban air mobility is more than air taxis. Many other elements are needed to make this new form of transportation a reality.

This is why established aircraft manufacturers such as Bell are not rushing to compete with the startups in developing vehicles. Instead they are focused on understanding the entire urban air mobility (UAM) eco-system and where they might play a role—or roles.

It is also why those startups now leading the UAM market such as Joby and Volocopter are planning to be the operators as well as the manufacturers of their electric vertical-takeoff-and-landing (eVTOL) air taxis. At the same time, there are many other companies eyeing pieces of the ecosystem, from the booking apps to the physical and digital infrastructure.

• $90 billion, 160,000-vehicle market forecast by 2050
• System-provider business model dominates for now

A new report by European consultants Roland Berger estimates the passenger UAM industry will generate revenues of almost $90 billion a year by 2050, with 160,000 commercial eVTOLs plying the skies. “Yet among the many disparate market players, no dominant passenger UAM player or business model has emerged yet,” says Stephan Baur, UAM lead at Roland Berger.

Instead, companies are tending to-ward four business--model arche-types: system providers involved across the value chain, and service providers, hardware producers and ticket brokers focused on distinct areas. “Most players are currently positioning themselves as system providers to gain as much industry knowledge as possible, and we believe this trend will continue,” Baur says.

Although Uber and eVTOL developers kick-started UAM, communities are increasingly getting involved. Roland Berger is tracking the progress of more than 110 UAM projects in cities around the world. These range from trials underway in China to Uber Elevate’s plans for limited commercial operations in Dallas in 2023 and Paris’ plans for UAM trials at the 2024 Olympic Games.

“We predict the first commercial UAM passenger routes will be operational by 2025,” says Baur. “While the coronavirus crisis has hit the aerospace industry hard, we do not expect it will severely impact the expected post-2025 growth in the UAM market. The major drivers such as congestion, urbanization and the desire to save time are not going to be dissipated by the pandemic.”

Roland Berger expects the 160,000 eVTOLs in service by 2050 to be split almost equally among three use cases: city taxis (36%), airport shuttles (35%) and intercity services (29%). But the revenue shares will be dominated by premium shuttle (50%) and longer-range intercity services (40%). Lilium, for example, plans a regional eVTOL network to compete with high-speed rail.

The consultancy is also tracking 230 electric aircraft projects around the world, 95 of which involve UAM—and 77% of those are startups. A small but growing number of projects involve automakers such as Geely and Toyota. “Through COVID-19, we have seen automotive take over from the legacy aerospace players. They seem to be more determined at this stage,” says Manfred Hader, global head of aerospace and defense at Roland Berger.

While 160,000 vehicles and $90 billion in revenues by 2050 sounds like a big market, the report notes that the global taxi market is expected to be worth $300 billion in 2030. “Our passenger [eVTOL] projections can be related to upscaled helicopter production,” Baur says.

OEMs need to stabilize their core business in the aftermath of COVID-19 so they can continue to invest in UAM, but startups with funding need to focus on demonstration flights to gain operational knowledge and build public acceptance, says Roland Berger. The report recommends startups first develop less complex use cases, such as cargo operations, to prove the concept and start the revenue stream.

Roland Berger stresses the need for partnerships. “Going it alone is simply not an option for any player, as strong collaboration between manufacturers, operators and infrastructure providers is proving a key success factor,” says Baur. “To secure a slice of the $90 billion prize, choosing the right business model and forming collaborations will be crucial.”