Podcast: Why Airlines Are Monitoring Air Taxi Development

Aviation Week editors Graham Warwick, Ben Goldstein and Karen Walker discuss what air taxis might bring to the world of commercial air travel.

Subscribe Now

Don't miss a single episode. Subscribe to Aviation Week's Window Seat Podcast in Apple Podcasts, Spotify or wherever you get podcasts.

Discover all of our podcasts on our at aviationweek.com/podcasts.

AI-Generated Transcript

Karen Walker: Hello everyone and welcome to Window Seat, our Aviation Week Network air transport podcast. I'm ATW and group air transport editor-in-chief Karen Walker. Welcome on board. Now, today I'm joined by two of my Aviation Week colleagues and they are executive technology editor Graham Warwick, and advanced air mobility report managing editor Ben Goldstein. Graham, Ben, thank you so much for joining Window Seat, and the subject for our discussion is air taxis or AAM; more on that terminology later.

Graham and Ben are both experts on this topic. It's got clear relevance to airlines and airports, but it seems to be moving rather slowly, so I'm absolutely not an expert here. So, the plan is I'm going to ask the dumb questions, and these experts are going to share their knowledge and opinions. So, let's get to it.

Graham, can I start with you please? You've written a feature on this topic for the upcoming issue of Air Transport World magazine, and in that you focus on latest developments regarding the relationships of air taxis with major commercial airports and airlines. But as I said, I'm here to ask the dumb questions. So, can I start by asking you, is the correct terminology air taxis, AAM or even eVTOL, which you refer to in your feature, which is correct? Or does it depend?

Graham Warwick: Well, it's kind of like layers, right? So advanced air mobility, AAM, is a general term for non-traditional types of air transport, including drones, air taxis, sub-regional airliners, that sort of thing. So, typically they have new forms of propulsion. So electric, hybrid electric, hydrogen electric, but inherent in the idea of advanced mobility, AAM, is the idea of bringing aviation closer to the customer. So, think about drone deliveries to your home or driving for minutes to a local vertiport or a small airport to catch a plane rather than miles or hours to a major hub airport. So, it's a kind of description of a non-traditional aviation. Now, within that, there are different categories of AAM. Air taxis is one of those, and it's kind of the idea of on-demand, per-seat use of small aircraft. So, you basically, instead of having schedule, you'll just turn up and they'll be flying, you'll buy it by the seat; they will then aggregate the demand, put you then do a ridesharing service. Kind of the idea, behind the original idea behind Uber, I don’t know how much ride sharing Uber actually does, but it's the idea of just being able to sort of on demand, get in a seat and fly somewhere. And an eVTOL is the vehicle which stands for electric vertical takeoff and landing, and it's a specific subset of advanced air mobility that uses electric propulsion, clean and quiet, and vertical takeoff and landing, which means it can operate from small spaces close into the city or close into the airport. And it can be for cargo, it can be for passengers, it can be urban, it can be regional, it just depends. So, they're kind of like layers.

Karen Walker: Great. So, thank you. I'm glad I did ask. So, when I'm thinking of my world, the air transport world, the commercial airlines and airports world, AAM is the broad overarching topic, if you like, the sector. And then as you bore down into airlines and airports, then you're talking about air taxis and eVTOL. Great. Okay, well, I've got that straight. Thank you, Graham. So next, can you just talk to me about who are the big players in the market when it comes to airports and airlines and who's got partnerships, for example?

Graham Warwick: Yeah, so in the recent sort of past two years, the industry's kind of bifurcated into the leaders and then a big gap and the followers. So, the leaders are startups, companies that didn't exist 10 years ago. So, the one that we generally consider to be the leader, and Ben can chime in on this, is Joby Aviation, which is a California-based startup. It has aircraft flying, it's doing demonstrations. It has not certified yet. It has not even flown an airplane, but it can begin certification testing with, but it's further along than anybody else. And it has an agreement with Delta Air Lines to offer a taxi service here in the U.S. It has an agreement with Virgin Atlantic in the U.K. to do the same thing—now, obviously Virgin is 49% owned by Delta—and then it has an agreement in Japan with ANA to do an air taxi service now. And it has another kind of key customer, which is not an airline, but it's also an important one, which is the Roads and Transport Authority in Dubai. And there it has an exclusive license and exclusive agreement to operate an air taxi service in the UAE. And that may be where this starts first. We'll probably get into that at some point.

So, after Joby, the next one is generally Archer Aviation, another California-based startup. It's not as far along in testing as Joby. Very great rivalry between the two companies. And it's tied up with United Airlines and Southwest in the U.S. It has an agreement with Ethiopian Airlines to do some early demonstrations, and it has a similar agreement, well, it doesn't have the same type of agreement, but it has an agreement in United Arab Emirates with the Abu Dhabi investment office to set up an air taxi service in the UAE, which would be in sort of competition with Joby. There's a third one, which is Beta Technologies, a little bit different, based in Vermont. They're actually developing a conventional takeoff and landing airplane first that will then become a vertical takeoff and landing aircraft in its next iteration. They're flying today doing demonstrations. Well along in development. They have an agreement with Republic Airways here in the U.S., Air New Zealand, they're going to do demonstrations with Air New Zealand, and they're actually doing demonstrations now in Norway with Bristow, not an airline, but a very large operator of helicopters.

Karen Walker: Right, okay. So going on, lots of things being explored and progressing. But Ben, as I hinted at earlier, and again, thank you so much for joining us. You really are the AAM expert here. A lot of talk, a lot of excitement. But if this is going to revolutionize the air transport journey, at least at large urban areas, why hasn't it happened yet and what's taking all of this so long to get its act together?

Ben Goldstein: Yeah, good question. Well, I think the shortest and simplest answer is that there's no certified eVTOL aircraft right now to fly, at least outside of China where they have certified one or two models. So yeah, for that reason, I think a lot of these startups initially had underestimated the scope of the challenge of certifying a clean sheet aircraft, especially one with a lot of novel technologies, tilting propellers, distributed electric propulsion, compact, fly by wire, etc. And I think what happened is you got a lot of companies maybe born out of a Silicon Valley mindset, maybe not having so much experience in the aviation industry, which of course is highly regulated. And I think now a lot of these companies are running into the reality that certifying is more difficult and especially more expensive than they initially assumed it would be. So, we're just seeing these timelines to market entry just keep getting stretched and stretched. So that's a major reason, obviously. But also this is a whole new industry they have to set up from scratch. That means the FAA has to essentially write the rules as they go along. This is a new class of aircraft, powered lift aircraft, so they have to write operating rules, pilot training rules—they've done that. But it's been a long process, and I expect that that will continue to play out.

There's also a lot of concerns. For example, these aircraft are going to operate in busy airspace in urban areas near airports, and there's a lot of concerns with ATC. Also with infrastructure. You have to secure real estate in downtown areas where these aircraft, they are going to be very quiet, but they're not going to be silent, and there will be concerns with the community and public acceptance. And all of this has to be worked out, and it all takes time. You have to get through this type certification process. You have to lay the groundwork for a successful entry into service. And that involves working on the ground with these communities, explaining to them what it's all about, getting real estate for these takeoff and landing facilities, whether that's a vertiport or whether you can sort of co-opt existing FBOs or heliports. And also, you have to work with ATC to make sure that everything is safe and deconflicted, especially in urban areas and around airports. So, all of this takes time. Its not something that can happen overnight. And I think a lot of these companies have sort of started to realize that it's going to be a little while. It's definitely a lot harder, I think, than they had initially assumed or telegraphed to many investors.

Karen Walker: That's interesting. So really what you're saying is that there's a regulatory issue that is perhaps both from the manufacturer, the designer element, they weren't as aware as maybe they should have been on just how tough this regulatory process is—has to be for safety, as you said. But secondly, the regulatory authorities themselves like FAA are dealing with a new sort of technology. So, they're probably learning too. But what you've just triggered there for me, Ben, is what I would call my really big question. It may be a dumb question, I don't know, but it's a big one. And I'd like you both to chime in on this.

You've just said Ben, because of the urban areas these are expected to get started in, we've got heavy air traffic congestion in some of those places. We're very aware of that in the U.S. There was, of course, the awful fatal collision in January at Washington Reagan airport between an American Airlines regional jet and an Army helicopter. So, as we're just talking about that regulatory side of things, why would someone get into one of these air taxis and feel safe going into a potentially crowded air traffic congestion area? Who wants to go, who's brave enough to go first on that?

Ben Goldstein: Okay, I'll hop in with a quick answer and I'll let Graham follow up with probably a better answer. But the traveling public and their perception of the safety of flying has always been different than the reality of flying. And the perception of the risk is always higher than the reality of the risk. Now, of course, there was this terrible tragic accident you referenced, but it's important to keep in mind, right, that was the first fatality in a United States commercial air transport since 2018 when a passenger perished in an accident on a Southwest Airlines flight, but traveling by air is broadly safe. Now are eVTOLs certified to the same level of safety as commercial airliners? No, not exactly. They are certified on more of a performance-based continuum, but they're still certified to very rigorous and high exacting levels of safety. And the FAA is not going to certify anything unless it is proven to be safe and effective, and the pieces are in place on the ground to modernize ATC and equip them to manage the challenge of incorporating new entrants—powered lift aircraft, crewed aircraft and drones.

But I also think it's important to recognize that even though people imagine a future where there's thousands of these aircraft flying around over our heads constantly, that's not what it's going to look like in the early days. So, the challenge is not integrating hundreds or thousands of aircraft all at once, right? I mean, they're going to have small numbers of aircraft in any given city flying around. So, it's going to be a gradual ramp-up. I would expect in the earlier phases, the industry ATC will have a chance to adapt. And I don't expect, and I wouldn't expect the FAA to certify anything unless it's totally proven to be safe. And I think that maybe the traveling public can put their trust into the FAA, just like they do every day when they step onto a commercial airplane.

Karen Walker: Ben, you make complete sense with that. And of course that is exactly, that's why FAA exists. But Graham, can I just push you further on that one? I mean, at the end of the day, perception is still … public perception is what's important here. I guess it's what I'm really getting at. Ben's absolutely right. I mean, we know far more people die every day in road crashes than die in years flying. That's how it should be from the aviation perspective. But does perception, will it have an effect on the marketability of these things?

Graham Warwick: I mean, hugely. And that's really kind of what they're getting to grips with now because starting to see these demonstrations now, they have airplanes that they can fly. They have enough of them to be able to do this sort of non-essential testing. It's not for certification, but it's demonstrating the aircraft. They've flown in New York, they've flown, just recently flew into from one airport to another, which sounds kind of silly, but it was quite a big thing to actually go in and mix in with normal air traffic to fly into an airport. So, they're beginning to show this, and show and tell is a huge part of this. They have to show that they're safe, they have to show that they're quiet and everything like that. So, as Ben explained, there's two real pieces to this. There's the vehicle safety and then there's the operational safety.

So, as Ben says, vehicle safety is down to the FAA and the rules and certification by designing these aircraft, if you compare them with a helicopter, they are intrinsically much more simple. There's very few moving parts in these aircraft, and electric motors are far more reliable than turbine engines and all that sort of stuff. So, there's this sort of mathematical calculation that they should be safer. There's a lot of redundancy. A helicopter's got single rotor. All of these vehicles have got multiple rotors they can fly with one engine failed, two engines failed, which you just can't do in a helicopter. There's the vehicle safety and then there's the operational safety. Again, Ben explained that these operations start, there are helicopters doing airport shuttle services today. You can go into New York, and you can fly to any of the New York airports from Manhattan in a helicopter; pay to buy a seat, fly it, fly to the airport.

It's very limited because helicopters are very expensive to maintain. They're quite noisy, and so the public don't like them. And also, there is this perception of their safety, and it's more than perception in the case of helicopters; they are less safe than commercial aircraft. We use numbers in the industry, which is a probability of failure. So, a helicopter's down about 10 to the minus seven, which is one in every 100 million flight hours. Commercial aircraft are 10 to the minus nine, which is one in every 10 billion flight hours. That's a whole different level of safety. eVTOLs, depending on who certifies them are somewhere in between that they will be certified to at least 10 to the minus eight, which is 10 times a safety level of a helicopter. And if it's certified in Europe, it'll be certified to the same standard as a commercial aircraft, which is the 10 to the minus nine, the 10 billion. So that's great, but then you've got to remember, they start with the helicopter operations and then they gradually grow over time as they grow experience. And it's that gradually growing bit. That's the bit where they have to demonstrate the safety to do that gradual growing bit.

Karen Walker: Right. Well, Graham's impressing us there with his knowledge of big numbers, and he also knows that my total lack of knowledge with numbers is even worse than it is with the AAM. So, I can't push back on him, but we'll assume, Graham, you've got the right numbers there. Ben, what are your thoughts on what Graham's just said?

Ben Goldstein: I just want to correct one thing that Graham said 10 to the minus nine is one in 1 billion flight hours.

Graham Warwick: Oh, you're right. Yeah, sorry. It is. Yeah. Yeah, I got my numbers wrong.

Karen Walker: Oh, thank you, Ben. You made me feel so much better.

Graham Warwick: I'll get stick for that one, I can tell you.

Ben Goldstein: Yeah, but aside from that, I think Graham is absolutely correct, about everything else you said.

Graham Warwick: So just going back to this thing, right? So you get this kind of by design, higher level of safety, which they've got to prove, they've got to prove, they've got to get enough hours and everything up to prove that. But then you get the how do you operate it? And if you start with the helicopter operations, the FAA air traffic control knows how to manage those. So, the case you referred to was a military helicopter colliding with a commercial airliner. There's a fundamental disconnect between those two organizations or systems between the way the military operates and the way the FAA [does]. If you're talking about commercial helicopter operation, that is FAA managed today, right? That is part of what the FAA does is commercial helicopter or civil helicopter operations. Now, you talked about perception. It is a huge part of this. So, Joby has just bought an operation called Blade.

Blade was the company that operates this helicopter airport shuttle service in New York. And they're relatively successful, small, as I said, limited because of noise and expense and all that sort of thing, relatively successful. But in the results they released just before they were bought by Joby, they pointed out that their passenger traffic dropped this year because there was a helicopter accident, a very serious helicopter accident over New York. A tourist helicopter broke up in flight and people died. So that's the perceived part of this. That perception is based on helicopters, right? And the known safety issues, single points of failure, all that sort of stuff that helicopters have, that's what they're fighting against. They have to change the perception that their vehicles, even though they take off and land vertically, are not helicopters.

Karen Walker: Okay. So, another issue here that I, again, me asking another dumb question, I'm going to put this one to you, Ben, you have been tracking all of this going on in the industry via Aviation Week's advanced air mobility report. When I follow some of that, what's taking my interest right now is quite a number of market exits, bankruptcies, selloffs, etc. Does that mean there are, for a better phrase, too many wannabe suppliers at the moment and not enough demand or money for that?

Ben Goldstein: Oh, absolutely. Yeah. Way too many companies competing for a market that just probably realistically can't support that many different OEMs, especially initially. We've seen some high-profile failures, Lilium being a major company in Germany that essentially went bust. Volocopter another German startup that was very promising, has not failed, but it ran out of money and ended up getting sold pennies to the dollar to a Chinese company. We've seen other companies—Airbus put their City Airbus eVTOL on ice, essentially. There's [also] the company Overair. So, there's been a series of kind of high-profile market exits, which is sort of what you would expect to see in a new industry like this. So, what I think is there's an increasing recognition right now of the so-called big three companies, all U.S.-based: Archer, Beta Technologies, and Joby. These companies have each raised billions of dollars and they have the resources, they have the cash, and arguably the expertise to go the distance and actually type certify.

And I think outside of those three, at least when we look at the Western market, China is its own story, but the Western market, there's a few other contenders who are not really trying to be among the first wave, but they're trying to kind of follow in the wings. Vertical Aerospace in the U.K. Eve is a Brazilian company that was a spinoff from Embraer. So, it enjoys that corporate backing. And of course, Wisk, which is owned by Boeing, and is developing a fully autonomous aircraft, which likely wouldn't be certified until early next decade. So, we do see this sort of consolidation and especially I think it's relevant to the investors, the investment dollars, the big institutions are almost exclusively going to Archer and Joby right now. Certainly that's the case for the retail as well. And when I talk to smaller companies, they just can't get any money right now.

All the money is going to the same handful, small handful of players, even Vertical Aerospace have a very small market cap. But generally speaking, outside of that first wave of companies, it is very hard to get money right now. The smaller startups, and there's hundreds of them who were competing for this air taxi dream, they don't even have a shot at it. You need billions to certify one of these things. So, what we see actually is a lot of the companies who were not particularly competitive, they don't have the resources to go the distance. What they're doing is they're developing subscale aircraft or uncrewed aircraft that they want to market for non-passenger use cases like to the military or logistics. And they feel that they can do that without having to go through the full, very expensive, FAA special type certification process. So increasingly we see this trend where all the money, the lion's share the money, is going to the same small handful of companies. Everyone else is struggling to get money and a lot of people are looking at other options. Maybe they can't do the passenger air taxi mission, but maybe there are other missions they can do—agriculture or search and rescue or what have you, that might be an easier hurdle to get a market entry.

Karen Walker: That makes sense. So ,where this industry is at the moment, it's natural probably that you are already getting some of that consolidation. Graham, what are your thoughts on that?

Graham Warwick: So this goes really back to when you asked Ben earlier on, why is it taking so long? All of the things that you have to put in place to do this. One of the key things about advanced air mobility is it is a market that does not exist today almost, right? Other than this few helicopter flights, we largely don't have any short-range regional service anymore. We certainly don't have sort of urban types. We don't have any of these sort of short-range, small aircraft, small airport, short-range just doesn't exist. Everybody's convinced the demand is there because they are convinced that people would rather go to an airport and fly than drive hundreds of miles to get to either their destination or to the nearest airport that will take them to where they want to go to. So, everybody kind of looks at the demographics and the travel statistics and they're convinced that the market exists, but we don't know that it exists. So what is really happening, as Ben described there, is the money's going to Joby and Archer and to a certain extent Beta, because they are the ones that are going to get to the market and prove if there is a market and if they prove there is a market, then the money will start to flow again. And all these other companies that have kind of slowed down and put these years of gap between themselves and the leaders will then jump into a market that exists. But today, we don't know that market exists.

Karen Walker: There are some people and some investors that are in a sort of a wait and watch mode while this plays out a little bit. Yes?

Graham Warwick: I mean definitely. Yeah. I mean it didn't start that way. Everybody was kind of charging to the end goal, but as it became apparent how much is required to make this work, you realize, you've got to realize that Joby's not only paying to certify an airplane, they're paying to create the infrastructure and the digital backbone of their operation. They're going to own the fleets in large parts of the world. They're going to actually build and own their own airplanes for the large parts of the world. So, the amount of money required is just, it's enormous compared with what you'd expect a small four-passenger airplane to cost to certify. This is a whole different ball of wax because they have to do the entire thing. They have to build the vehicle, certify the vehicle. They have to enable the infrastructure. work to get the infrastructure built. They have to own the fleets, they have to operate the fleets, they have to actually run the ticketing systems. And it's a massive undertaking to create the market that fundamentally to any level doesn't exist there.

Karen Walker: So, Graham, let's turn that on its head a little bit because as I said, my world, the Window Seat world is the airlines and airlines, the vast majority of them are still operating on the very margins of financial survivability. So why would they invest, whether it's time, resources, or money into this market and these companies?

Graham Warwick: Well, I would say they haven't probably put a lot of money in. I mean the big money into the leaders, it has oddly come from automotive and other markets like that. The airlines have put strategic amounts of money down, but not huge amounts of money down. So, it's fundamentally about getting your premium passenger, your premium customer, to the airport terminal in a hub city where there is gridlock traffic, right? So, New York, Chicago, Los Angeles, your premium passenger either has a long journey to the airport or an unpredictable amount of time to get to the airport. So, the idea here is the air taxis enable the airline to take custody of their premium customer much closer to where they set, they begin their journey and deliver them much closer to where they end their journey. And throughout that journey, they are given the branded experience of being with Delta Air Lines or United Airlines.

And from that, so initially they're going to do what helicopters do today, which is take off from downtown heliports, fly to a heliport at an airport, and then get driven by limo or car or whatever to the terminal, and then they'll check in, etc. But what Delta wants to do is it wants to take its big multi-billion-dollar terminals its built at these various airports and put the vertiport on the terminal so that you would go in and your premium passenger would leave wherever they're leaving from, land at the terminal, go through an expedited check-in process, and then at the other end the same thing would happen in reverse and they delivered much closer to their end destination, whether that's the business district or whatever it is. That's what the airlines see that you can do with this. Now what that means is it is a premium passenger experience, right?

It's a premium passenger price basically. Initially it's like any innovation like cell phones, whatever you name it. I mean, they cost a lot of money when they first get in the market and only certain people can afford them. But as more and more people use them, they get cheaper and cheaper. And that's kind of what they hope. They begin with a premium passenger. And then over time … so Joby, for example, will carry Delta passengers, but it'll be able to sell any unused seats on its jet, on its little airplane, it'll be able to sell to a walk-in customer. An on-demand customer, aggregate that demand fly into the airport. So, the idea is that over time you use that core premium market helps you bring in more people, you have more airplanes, more service. Gradually over time it becomes more of a … it'll never be an everyday experience, but it would become more and more. And the idea is to be an upper end of an Uber type of price eventually. But that's a long, long, long, long way away.

Karen Walker: So, Ben, just picking up from what Graham's just said there, as this all comes together, and again thinking in terms of the airline world for this, does it really mean that it just becomes the rich boys’ game? Graham's mentioned premium quite a lot there. Is this really something that the majority of us don't have to worry about because we won't be able to afford it?

Ben Goldstein: For the near future? Yes, initially, like I mentioned earlier, we're going to have small numbers of aircraft. These are going to be premium type services, like Graham alluded to. The fair prices originally were advertised by the companies themselves to investors as being very low, competitive with Uber Black. And I think increasingly there's a recognition that that's not going to be the case. They're going to be out of the affordability range for, I would think, for most people. And the value that you would get from the time savings would be more relevant to that, the really high net worth people and executives. But I wouldn't expect that most people listening to this podcast are going to be riding on an eVTOL anytime soon unless they happen to be very wealthy or an important person. Otherwise, I do think it will be a rich boys’ game for some time.

However, as the industry scales, assuming they can bring down unit costs, bring down the cost of producing the aircraft, then in that case, the cost of the airfares will also trend downwards. Now, will they get to the point where they're competitive with the ground transportation and it makes sense for people to pick the option over taking a cab? That might take a long time. That's definitely the goal of these companies is to get to that point. But it's an open question. The affordability of these services, I would expect them to be premium services for the near future. And over time, assuming the industry is able to scale, then the fares would come down and then at that point, maybe in the 2030s, it would be an option for the traveling public, for more middle-class types of people.

Karen Walker: So again, very similar to the airline industry in itself. That started very much and was a rich boys’, a rich person's game for a long while. And as we know that, look, low-cost carriers changed all of that.

Graham Warwick: And I mean you've got realize these early vehicles are quite limited and I write about these, but I know I'll never fly in one. I'm way too big and heavy to fly in one with these things.

Karen Walker: That's got nothing to do whether you could afford it, Graham, it's whether you can fit in one. Okay, well look on that note before we go any further there, can I both thank you both so much for this really interesting discussion. We're going to have to do this again. This has at least got my attention here on why this is such an interesting aspect of the industry. So, we'll do this again because I've learned a lot and I'm sure our listeners will feel the same.

Graham Warwick:

And I'll go back to school and learn my maths before the next one.

Karen Walker:

You can always do that, too. Remember listeners, do take note of the Aviation Week advanced air mobility report. You're going to learn so much from that and keep current with how this industry is tracking and also look out for Graham's ATW feature on this very topic. And that will post to the Aviation Week website next week. So, with that, thank you also to our producer Cory Hitt, and of course a huge thank you to our listeners. Make sure you don't miss an episode of Window Seat by signing up to Apple Podcasts or wherever you like to listen. For now, this is Karen Walker disembarking from Window Seat.