Podcast: Will AAM Make A Dent In BizAv?

Jeremy Kariuki:

Hello and welcome to the BCA Podcast by Aviation Week. I'm your host, Jeremy Kariuki, associate editor for Business Aviation. This week we're shifting our focus to advanced air mobility or AAM to assess what sort of impact the fledgling industry may have on business aviation. And joining me today to answer that question are Aviation Week's own Graham Warwick, our executive editor of technology, and Ben Goldstein, managing editor of the Advanced Air Mobility Report. Welcome to the show, gentlemen.

Graham Warwick:

Welcome.

Ben Goldstein:

Thank you.

Jeremy Kariuki:

I would love to get both of your perspectives on what the state of the AAM industry is right now. I know that there's a lot of aircraft that are currently in development doing first flights and testing and whatnot, but there really hasn't been any official full-fledged delivery or launch of any of these products. So where is the AAM industry at?

Graham Warwick:

There is a lot of activity. By and large, the industry has moved into the type certification phase, which is doing the hard work to get their airplane FAA or European certification so they can then either deliver to customers in some cases or put the aircraft into service on their own air taxi operation. So that's kind of where we are. We're deep into that. We have not begun any real certification testing yet with one exception, which is Volocopter in Germany. But Joby, Archer, BETA, and relatively soon Lilium will all be flying airplanes and building certification hours.

So looking at certification, you're looking at some time, maybe by the end of 2025 you will see certified aircraft. Then sometime in 2026, maybe the first half of 2026, you will see aircraft enter service. That would be my guess. But it's down to, at the moment, it's a small number... There's a lot of people playing, but there's a small number that are making what we'd call real progress and that's Joby and Archer with electric VTOL aircraft.

BETA is starting off with an electric conventional takeoff and landing aircraft with a plan to follow a year later with a vertical takeoff version of essentially the same aircraft. And then after that, you have Lilium and Vertical and others like that, and Volocopter. Volocopter is almost there. I mean, they had hoped to have a certified airplane at the Paris Olympics. It didn't work out. But they still should be certified by the end of the year. So they may actually be flying commercial air taxi services somewhere, sometime next year, but it'll be a very slow start. But it will be a start.

Ben Goldstein:

Yeah, yeah. I would just echo what Graham is saying. We're kind of in the closing stretch right now. We have a few startups on either side of the Atlantic that are making very fast progress. Volocopter, foremost among them in Europe, in the United States, Joby, Archer, and BETA. And we're at the point where companies are building what we call type-conforming aircraft, meaning that they are essentially the same aircraft that they will be certifying for production.

What we've seen now is most companies are still doing these internal company testing, but soon, once we have conforming aircraft, we're going to kick off for-credit testing, which is going to be the real campaign that will hopefully pave the way for the launch of services as soon as late 2025. I know Joby and Archer, for example, are talking about launching in Dubai for the end of next year. So it's a very exciting time in the industry for sure.

Graham Warwick:

Ben makes a very good point there. It's entirely feasible this may start outside the US, although US companies that are making a lot of the progress, there are some hurdles to be overcome with the regulators here in the US, not just the certifying the airplanes, but getting the operating certificate to go fly these things commercially. So it's actually entirely possible and probably likely that they will actually start flying in jurisdictions where the regulator is ready and willing. So Dubai is definitely working hard to be first. We may not see this in the US first, but we will see it, as Ben says it's entirely likely by the end in 2025, but that will probably be somewhere outside the US.

Jeremy Kariuki:

So you mentioned Dubai as a place where these things are getting a lot of headway. Are there any other specific regions or countries that are a advantageous spot for these eVTOL companies to flourish? I know that there's EHang in China. Is that a market where eVTOLs are getting a lot more support?

Graham Warwick:

I'm sure Ben can jump in on this, but China is really a law into its own. It's very hard to talk about AAM and eVTOL and have China and the rest of the world in the same sentence because they're on two completely different timeframes.

It's already a reality in China. So EHang, which was one of the very first companies just behind Volocopter to get started with this, is the first to be certified. It has type certification. It has production certification. It's applied for its air operator certificate. It's flying passengers today on trial operations. By the end of the year, it should be doing pay per flight commercial operations. And this is where a vehicle that has no pilot. I mean, this is the bizarre thing about this. It's an autonomous two-seat airplane.

And the early missions they're looking at are kind of tourism, which is kind of a very contained operation where you'll get in, take off, go fly over a scenic area on a pre-planned route, and then come back and land. The reason they've got the approval they have is they're able to contain the risk and say, "We're only going to fly in this area. We're going to fly one route every time." So it's kind of a way to get started.

But in China, and they're not the only one certified. AutoFlight has its big cargo eVTOL is certified. And there's at least three, maybe four, maybe five that are also in the actual certification process with the Chinese. It is really on a different timescale. And the other reason it's difficult is they will, but they fundamentally don't have to even try and look outside the Chinese market. The Chinese market is big enough for these companies to get started, to grow quite significantly before they really would need to look. They are going to do it, but, I mean, they could spend several years just meeting the Chinese market before they ever felt the need to go outside.

They think they've got a jumpstart and maybe they do have jumpstart, so they will be out in the market trying to get their vehicles into other countries, probably starting with ones that China has good relationships with in Asia and things like that. But yeah, China, you kind of always have to take a deep breath when you talk about AAM and say, "Outside of China and inside of China."

Ben Goldstein:

Yeah. Yeah. Just to echo what Graham said, China is definitely a leader in this space, and I think a large part of that is the strong level of support they have from their central government. They have a major push, what they call the low-altitude economy for drones and advanced air mobility aircraft. This is very much a top-down centralized push where the governments are working with the local provinces, with municipalities, with OEMs and operators to establish this industry in a way that we don't really see I think in the West.

Now, we have companies like EHang, like Graham mentioned, which are making really a lot of progress. EHang delivering dozens of aircraft per quarter now. They're producing in fairly high volumes. They have a factory that can produce hundreds of aircraft per year. That's already up and running. And while they are starting with a small multicopter, they're also developing a larger aircraft called the VT-30, which will be a regional solution. So we also have AutoFlight like Graham mentioned. So we have two companies in China that have type-certified vehicles, and there's many more, many which have already transitioned with full-scale aircraft.

So the Chinese industry is very much out in the forefront. And another aspect that I'll just mention quickly is that they have a very large electric vehicle industry in China, and the companies there benefit from that industry and from access to. But yeah, I think China is a real player in this industry.

And I think you asked about other launch markets. We're mainly looking at outside of China, large cities, places like New York and Los Angeles, maybe Florida, and in Europe, places like Rome or Paris where we would see these kinds of air taxi services. Of course, I think in China they have a much easier time paving the way for these services from a regulatory standpoint. I know when I talk to companies here, when working with certain municipalities in the United States, for example, Los Angeles, there's a lot of bureaucratic steps that come into play here that maybe they don't have to deal with in China where things are a little more centralized, they work a little faster over there.

So I think definitely they're off to a head start in China and they have a real advantage, you could say, in the sense that they have this EV industry and they have a very supportive central government.

Jeremy Kariuki:

Absolutely.

Graham Warwick:

And it's worth pointing out that this low altitude, since we're talking on a BCA Podcast here, to the Chinese there's low-altitude economies, not just eVTOLs. It's also drones, but more importantly it's helicopters and general aviation, which have long been a much smaller part of Chinese aviation because it's been very hard to get access to airspace because the military controls the airspace and things like that.

But as part of this low-altitude economy, they want to develop general aviation, fixed wing, rotary wing. They want to develop business aviation. They want to develop other ways of moving things around in China that isn't just the major airlines. And if you look at a lot of the players that are starting to work together in China, it is the helicopter operators, it is the business jet operators that are forming the core of the customer group within China because they have existing mechanisms to know how to go fly these things.

So it's interesting in China that they are actually tying those pieces together, business aviation, general aviation, and this what we would call AAM.

Jeremy Kariuki:

Absolutely. And that leads me to my next question that really revolves around infrastructure. I know that here in the US there's a bit of a situation in terms of space or in usage of space, like maybe we'll have a hangar shortage where there aren't enough places to store an aircraft. I know that a lot of charging infrastructure will need to be developed over the course of the next decade, but will these AAM vehicles be sharing spaces with business aviation aircraft or will there be infrastructure built outside of those areas?

Ben Goldstein:

So in the early stages, the plan is very much to use existing aviation infrastructure. The FAA has put up a document, which is their plan to enable mass scale advanced air mobility services by 2028 in certain key cities. And as part of that plan, the FAA has said that they envision these operators using mainly existing heliports and FBO terminals and things of this nature in time because we're going to have small numbers of aircraft most likely operating in the early stages. But as services scale up and when we do have larger numbers of aircraft over the skies, then we will see the first dedicated greenfield vertiport infrastructure come into play. But I wouldn't expect to see many dedicated vertiports in the early stages when these services launch. They're very much going to be sharing the existing aviation infrastructure.

Graham Warwick:

So you make some good points. And as Ben said, we have to really be clear here, this is going to start small. So we're not going to flood the ramps from day one with air taxis. But they are going to share the ramps. So a few flights a day maybe or something like that because the fixed-based operators, they have the terminals and the ability to handle these passengers. You can't drop an air taxi into a major airline terminal and expect to find a way to easily integrate those passengers into the flow that goes through the terminal. They'll try eventually, but early on it's much easier to put them into a terminal that's used to handling small groups of people coming in on a more ad hoc type of thing.

One consequence of that is if you're going to use an air taxi, you're not going to land at the terminal. You're going to land at the FBO and they'll put you in a car and drive you to the terminal. So that's a downside of this is they'll know how to handle you no problem at all, but you will have to drive to the terminal and to and from the terminal.

But you also made a really, really good point about ramp space and charging infrastructure. And these aircraft will have to be parked somewhere overnight. Most of the time they'll be parked overnight and be charging overnight. Because during the day, if they get it right, they'll only be getting short charges to top up the batteries to do the morning rush hour and the evening rush hour, rush hour, which is an overstatement, but there'll be kind of flights morning, flights in the evening. And then they will probably sit on the ground overnight doing the deep charge to get them ready for the next day.

So they're going to have to be undercover somewhere and they're going to have to have access to high power, whatever they call it, the top level of Tesla charger, supercharger level, not just plug it into your normal socket in the wall. So there is going to be everywhere that these things want to go, there's a consideration about how do we get power, how do we get space, and how do we get power to that space?

Some of these folks are already moving out well ahead. The folks that Joby have teamed with and Archer have teamed with, Signature and all these others are being very proactive and they're identifying sites and they're going ahead. But in some places they'll have to have new power feeds put in from the grid to the thing. And that's, we're told, not a quick process. If you go to your local power company and say, "I want to draw X kilowatts of power" and your cable isn't up to it, they'll have to put a new one in and you have to wait for it because they don't do it overnight. So you have to plan these things.

Our colleague, Garrett Reim, was at an event in Seattle last week where he was talking to magniX, which is one of the pioneers in electric propulsion, and they're working with Harbour Air in Vancouver, which is a seaplane operator who want to be the first people to electrify a fixed-wing airplane, in that case a Beaver. Well, they're struggling to get their hangar upgraded with the charger infrastructure they need because they've got to go dig holes, put in... Some places, they have to put a whole new transformer interconnected and all that sort of stuff.

So it is not as easy as it sounds because, as you rightly point out, you've not only got to have takeoff and landing space and ramp space and a way of handling the passengers, you've got someone to store the airplanes and someone to charge the airplanes, and that's not going to happen overnight.

Jeremy Kariuki:

For my next question, I want to get your perspective on the demand versus the availability of AAM vehicles. As you said, it's going to start out slow. These aren't going to be everywhere in 2026 or even 2027. But the target consumer for these companies are people that are engaging in business aviation as an industry. Do you believe that the availability of AAM vehicles will help drive the demand for them from these customers? Or do you think that the demand will have a different effect on the availability or is there any sort of correlation between the two?

Graham Warwick:

Who is the customer is an interesting question because to be honest, this is an unproven market. We don't know if there is a market yet.

The belief is that the initial customer base is the airport shuttle market. Now, there are helicopter airport shuttles at the moment like BLADE, et cetera. They tend to be used by the more frequent traveler, the higher-status loyalty traveler, the wealthier traveler because they do cost a little bit more or sometimes quite a bit more than getting a cab or an Uber to the airport.

Now, is that person going to the airport to get on a business jet? No, that person is going to the airport to get on an airline by and large. Probably a business class passenger or likely business class passenger, maybe a first class passenger. But initially he's going to the airport probably to connect to an airline, possibly to connect to a business jet. That's not out of the question. The question then becomes where is he flying from? I mean, if you're flying from downtown Manhattan, are you going to go to your business jet or are you more likely to be wanting to fly from wherever you land your business jet to the Hamptons or something? These are the sort of subtleties of who the customer is.

Now, some of the eVTOL manufacturers, Lilium specifically because it has a slightly different vehicle, it's a bit like saying that Joby's doing a Tesla Model 3 and Lilium's doing a Tesla S or something. I mean, it's coming in at the very top end of its market in terms of the product they're trying to put together. And therefore, what they've decided to do is target the private aviation market. So they're trying to sell these things direct to private customers or to operators who almost exclusively serve private aviation customers.

So the idea being that if you're in the French Riviera, if you have a villa in the French Riviera or you're visiting the Prince of Monaco or something like that, you would get to Nice Airport or wherever you're flying out of by getting in your Lilium taxi and flying to the airport. That's a definite niche that exists, but at the moment it's a subniche of this bigger getting to the airport market.

But we've got some interesting customers starting to bubble around. There's a Greek Libra, it's called Libra. They're actually, they're a Greek hotel chain that also owns a helicopter leasing company, LCI. They want to get BETA eVTOLs to fly people from the airport to their luxury resorts. The folks in Greenland want to do ecotourism. They've got a luxury hotel right out in the middle of somewhere in Greenland and they want to take, fly them from the hotel out over the glaciers. There are these really weird little niche markets that once you have an airplane, you can go into that market because it's kind of you can identify a return on that, putting that airplane in there.

So that's the bit we don't really know is which of these many markets is going to be the one that gains traction first. But definitely the private aviation user is definitely a factor in this. Particularly the private aviation user we have post-COVID who is somebody who came into private aviation through a jet card type thing and who just realizes the convenience of private aviation and can afford whatever price point it comes at. And therefore, if somebody says, "I offer in effect a luxury limo service from this beach resort to the airport," they're going to be the ones who may be saying that's going to drive that market. We just don't know how those markets are going to emerge over time, I think.

Ben Goldstein:

Yeah. And I think it's an interesting question because we're talking about demand like Graham said for a market that does not exist. So a lot of this is theoretical. But we do see there have been thousands of orders placed from many different operators, including the legacy operators like United, Delta, American. The theory here is that eVTOL aircraft, air taxis will be able to get to a price point that's competitive with an Uber Black-type service.

What's happened behind the scenes is a lot of these price projections in terms of passenger seat mile costs have been sort of quietly revised upwards compared to what was initially projected. And as a result, I think what we're going to see is that the early services are going to be a little bit more premium. They're not going to be geared towards the mass market. They are going to be more geared towards the private aviation customer or the premium customer.

Now, as that price point comes down, we are going to see more of a mass market service. But also I think it's worth noting that even besides passenger, there's major applications in terms of cargo, defense and military logistics, air ambulance. So there's a lot of I think opportunities for these aircraft to make a real impact even before we're able to see that real mass transport market take shape.

But I do think in the earlier stages we're going to see a more premium type service, and I think that's why we see companies like Lilium who have really pivoted to focusing on the premium customer. There are other companies, VAERIDION, a German company which is developing an electric airliner is also focused on business customers. There's a few others. There's Siriusjet in Switzerland developing a hydrogen electric business airliner.

I do think that the early stages we're going to see a more premium type service. But also I just want to emphasize that taking a holistic view, cargo, defense, there's going to be a lot of applications for these aircraft before that mass market does truly materialize, if it does materialize.

Graham Warwick:

Yeah, most of the manufacturers will still tell you they think it's going to be a capacity-constrained market at first. They won't be able to build enough aircraft to meet demand early on because they're capital constrained. They can't just turn the production tap on. They've got to manage that whole production ramp up.

So it's interesting. One of the things is when you look at AAM and you look at business aviation or private aviation, I don't think there's any competition between the two. It's an adjunct in that the FBOs, there's a potential for the FBOs for additional revenue, additional passenger capture type of things for private aviation services. For the supplier market, not the Gulfstreams and the Bombardiers, but the Honeywells and the Liebherrs and the people who make the pieces that go into the airplane, several of those companies have cast, particularly Honeywell, have cast their lot in very heavily with AAM because they see the technology they need to do to do a eVTOL is the same technology they can then put into a Cessna or a Beechcraft King Air or eventually grow up into what goes into a Gulfstream or a Bombardier.

All of these vehicles are fly-by-wire. They're fly-by-wire and they're a size of a Cessna 172. We've never had fly-by-wire in airplanes that size before. It's a fantastic technology that makes everybody safer, but it's always been out the reach of general aviation. Well, it's not going to be out of reach of the general aviation at the end of this.

And then you've got these advanced single-pilot cockpits where there's a lot of automation and human-machine interface to make it easier for the pilot. That's all going to go into single-pilot Cessnas, Pilatus'. It'll go into in some way, shape automation into the next Gulfstreams and Bombardiers, et cetera.

So at the moment, I see AAM and business aviation as adjuncts and potentially synergistic. I don't think an eVTOL... I mean, it may over time, but I don't think you will ever see an eVTOL doing the job that a business jet does because business jets are about cabin volume and range and speed, and that's something you don't get with an eVTOL. If you try and get in one. I'm 6'4" and I'm not going to tell you how heavy I am, but I'm not going to fit in any of these eVTOLS. They're pretty tight fit at the moment. And they don't go very far. So I think in the early days, it's very definitely a potential adjunct business for everybody involved, if it works.

Jeremy Kariuki:

That almost answers the question I'm about to ask about how AAM is affecting BizAv as an industry, not even taking some sort of share of its market, but really influencing how its market operates. So if we want to say sustainability or technology that is pretty stable in AAM, whether it be alternative fuels for propulsion or automation, fully or partial automation, what sort of factors or traits from AAM would you see manifesting in the business aviation industry on a technological level?

Graham Warwick:

So I actually think traditional business aviation is in a bit of a hard place when it comes to sustainability for the reasons I just said. The typical business jet is there to carry a large cabin a long distance at reasonably high speed. If you start talking about electric, you don't get the range. If you start talking about hydrogen, you lose volume, you lose cabin volume. It gets very hard to see how you can make big changes to business aircraft design that get you big sustainability benefits except for sustainable aviation fuel. But in truth, sustainable aviation fuel is not long-term answer because you're still emitting and you've got to get the actual real tailpipe emissions down long term, which means you've got to find ways of changing the airplane.

So what AAM is developing fundamentally are a suite of technologies. It depends on how you look at it. It's electric motors, it's battery systems, it's advanced avionics, fly-by-wire and sort of like single pilot-oriented displays and controls. It's increasingly hydrogen fuel cells and hydrogen electric as another area. And therefore these technologies are being matured by the AAM market. That is the target market. That is what people are focusing on.

We've seen tremendous advances in motor performance in the last few years. We're seeing tremendous advances in fuel cell performance as they get applied to aviation. We're even seeing some fairly significant improvements in battery performance as it moves away from being automotive being the technology driver to things like aviation being the technology driver.

So all of those are goodness, but it's then how do you apply that to business aviation? And so as Ben pointed out, there are at least a couple of hydrogen fuel cell-based business aviation designs out there. That's the Siriusjet in Switzerland, Beyond Aero one in France. Time will tell whether that makes a compelling project or not. You've still got to do a level of performance with a business jet that's beyond what a normal fixed-wing airplane. You do need a degree of speed, you do need a degree of size and comfort, and you do need a degree of range. And that makes it a very challenging problem. But I do see almost certainly cockpit technology, and I do see that the ability to hybridize, electrify the aircraft more than they do today is definitely being made easier by what's going on in AAM and probably have an impact.

Ben Goldstein:

I think that business flyers, they're an attractive opportunity here. They're not particularly cost-sensitive, and there's an enormous push in industry amongst these corporations to decarbonize their executive travel, the company travel. On the other hand, we have to balance that against the performance considerations and what you need from a business jet. So I think, like Graham said, the kinds of eVTOLS that are being developed by companies like Joby and Archer are not going to be the right solution for a business traveler. But if you think about a hybrid electric conventional takeoff and landing type aircraft, okay, well, maybe that can't do everything that the traditional business aircraft can today, but when you consider the environmental benefits, there might be a compelling option here for executive travel to sort of present itself as an early market for advanced air mobility. So I do think it's definitely an exciting application.

Graham Warwick:

And I think if you look at the journey as a whole, as a door-to-door or office door-to-office door type of experience, then eVTOL has a place in decarbonizing the bit of the journey that you spend today in a car or a limo or whatever or something like that. And in doing that, you can make the executives time more efficient because they're not sitting on the ground as long. You can reduce emissions because the car's not pumping out, or it could be an electric car, but I mean, you're not causing traffic congestion.

And so there are ways of playing this from an executive travel thing where eVTOLs can play a role in a kind of an overall trip planning type of thing, where you may not be able to do much with the 7,000 mile, 51,000 feet, Mach 0.9 part of the journey, but once you're on the ground, you can be more efficient in time and energy in getting around on the ground.

I don't know. I mean, I think the industry's a little bit clutching at AAM because they're looking for a sustainability message. They're looking for something they can say, "We're making inroads on sustainability." So they kind of tend to look at AAM as being something they can say, "Oh, that's, that's this." How it applies to business aviation I think has still got play out, but definitely it's putting some pieces onto the chessboard that could be moved in interesting ways.

Jeremy Kariuki:

Interesting indeed. Unfortunately, that is all the time we have for today. Ben, Graham, thank you so much for joining me. I'm sure that we will have you back on the show to discuss how it evolves over the next couple years, if not even the next couple months. So thank you so much for joining.

Thanks for listening to the BCA Podcast by Aviation Week Network. This week's episode was produced by Jeremy Kariuki and Andrea Copley-Smith. If you enjoyed the show, don't forget to like or follow us on your podcast app of choice. If you'd like to support us, please leave a rating wherever you listen. Thanks again, and we'll see you next time.