As Boeing and Airbus Pull Back From Urban Air Mobility, Volocopter’s Advance Sale of Air Taxi Rides Sends a Mixed Message

 In Smart Cities, Air, Transportation

You may have heard that German air taxi devel­op­er Volocopter has announced that it’s offer­ing advance reser­va­tions for rides in its elec­tric, single-pas­sen­ger VoloCity air taxi, which has not yet received safety cer­ti­fi­ca­tion. The rides will be about 15 min­utes long, cost $23.66-per minute, and won’t go any­where.

Some might say that’s a metaphor for Urban Air Mobility (UAM) in gen­er­al.

Volocopter is not offer­ing specifics on when or where the rides in its 18-rotor eVTOL air­craft will take place. The com­pa­ny will say only that they’ll happen within 12 months after Volocopter’s com­mer­cial launch, expect­ed some time in 2023.

The cost for what pre­sum­ably will be a joyride out and back to a single point is $355. You can reserve your spot for a 10 per­cent deposit, but step lively because only 1,000 reser­va­tions are being taken. For Americans, the total cost will prob­a­bly include a quaint old air­line ticket since the VoloCity’s few pre­vi­ous test flights have taken place at its head­quar­ters in Bruchsal, Germany, and in Dubai, Singapore, and Helsinki, loca­tions where approval may read­i­ly be grant­ed.

The Pause That Refreshes?

Volocopter’s announce­ment comes at an inter­est­ing time, Teal Group ana­lyst Richard Aboulafia notes.

“Boeing BA has paused its invest­ments in UAM and Airbus qui­et­ly shut­tered their Voom ini­tia­tive. Aerospace com­pa­nies are get­ting out of urban air mobil­i­ty almost at the same time that the ter­res­tri­al trans­port folks seem to be get­ting into it. It’s weird.”

Last week, Boeing announced the ces­sa­tion of oper­a­tions at its two-year-old “NeXt” inno­va­tion unit, which focused on manned and unmanned UAM, citing slump­ing rev­enues stem­ming from the global pan­dem­ic. Boeing sub­sidiary Aurora Flight Sciences col­lab­o­rat­ed with NeXt to devel­op an autonomous pas­sen­ger air vehi­cle that made a test flight in January 2019. Aurora’s future is in ques­tion, as is that of Wisk, a joint ven­ture with Google bil­lion­aire Larry Page’s Kitty Hawk to devel­op a two-person air taxi.

In March, Airbus closed its Voom sub­sidiary, which offered on-demand heli­copter ser­vice in North and Latin America, again citing the pan­dem­ic. Though it didn’t oper­ate the eVTOL air­craft envi­sioned for UAM, Voom was con­sid­ered a busi­ness research oper­a­tion for Airbus, col­lect­ing oper­a­tional and behav­ioral data to inform poten­tial future UAM busi­ness plans.

Other Airbus ven­tures relat­ed to urban air mobil­i­ty have gone quiet as well. The com­pa­ny clas­si­fied its first eVTOL air­craft project, the unmanned Vahana, as a tech­nol­o­gy demon­stra­tor. It suc­cess­ful­ly com­plet­ed a 138-flight test pro­gram and closed down in December 2019. The CityAirbus, a larger fixed-rotor eVTOL air­craft with four-pas­sen­ger capac­i­ty, made its first unteth­ered flight in the same month. It too, is strict­ly a demon­stra­tor about which little news has been heard this year.

As major air­framers appear to pull back from UAM, automak­ers appear poised to step in, though their plans are decid­ed­ly vague. Early this year Uber’s UBER UAM divi­sion, Uber Elevate, issued a joint announce­ment with Hyundai Motor Company tout­ing an agree­ment to devel­op and mass pro­duce hun­dreds of thou­sands of Uber air taxis. When pressed for specifics of its plan to man­u­fac­ture air taxis in volume, Hyundai’s response was that the com­pa­ny “will make a breakthrough in volume production of aircraft with innovative methods."

In January, Toyota Motor invest­ed $394 mil­lion in eVTOL start­up Joby Aviation. Daimler AG and Geely Automobile are back­ing Volocopter, which has raised $132 million.

More recent­ly General Motors GM announced that it’s explor­ing options to get into the UAM market from invest­ing to build­ing its own air taxis. The announce­ment is likely as much adver­tise­ment for GM’s new Ultium advanced elec­tric bat­tery and elec­tric drive units as a head­first dive into UAM.

A GM spokesman declined an inter­view but told me via email, “We believe our Ultium bat­tery system has poten­tial to make an impact on the world in a lot of ways and aerial mobil­i­ty is one we’re very inter­est­ed in. Whether that’s part­ner­ing, invest­ing or man­u­fac­tur­ing, we can’t say at this point.”

Like other automak­ers, GM is look­ing to expand beyond its core con­sumer vehi­cle busi­ness as the auto indus­try con­sol­i­dates. Ironically, its claimed bat­tery advances poten­tial­ly give the ground based vehi­cles it has his­tor­i­cal­ly spe­cial­ized in an even greater cost advan­tage over air taxis than cur­rent cars and buses.

Signal To Noise

The moti­va­tion for Volocopter’s advance ride sales announce­ment comes from a desire to intro­duce the public to air taxis the com­pa­ny says.

“With the start of reser­va­tions, we now invite our sup­port­ers and inno­va­tors around the world to join us and be amongst the first to expe­ri­ence this new and excit­ing form of mobil­i­ty,” said Volocopter CEO Florian Reuter.

But Aboulafia asks why Volocopter feels that’s nec­es­sary and why believ­ers in the promise of UAM would put down a deposit. “If the sky is going to be flood­ed with these things, why do you need to buy a ticket in advance? There’ll be plenty of space avail­able.”

Numerous stud­ies, including Airbus’ own internal research, assess UAM as a lim­it­ed trans­porta­tion option for well-heeled con­sumers, reach­ing some form of matu­ri­ty in the 2040s. Given all of the as yet unde­vel­oped build­ing blocks from ground infra­struc­ture and unmanned air traf­fic man­age­ment to eVTOL advances, air­craft cer­ti­fi­ca­tion and public accep­tance, UAM star­tups are scram­bling to stay in busi­ness until an actual market final­ly emerges.

Many are piv­ot­ing to offer drone deliv­ery ser­vices, pitch­ing their craft as small to mid­size cargo haulers, includ­ing Volocopter, or look­ing for other ways to gen­er­ate cash flow — Volocopter is devel­op­ing a crop-sprayer ver­sion of its air­craft with John Deere.

Volocopter’s sale of tick­ets for a ser­vice that doesn’t exist sug­gests it’s look­ing for pub­lic­i­ty, poten­tial­ly for fundrais­ing, says Aboulafia. “You’ve got to stay in public view to attract cash. It would be inter­est­ing to read the fine print on the tick­ets,” he says.

Recent FAA approvals for small drone deliv­ery ser­vices by Amazon AMZN , Walmart WMT and Google GOOGL /Wing could fur­ther com­pli­cate the UAM market. Their lead-to-market and poten­tial num­bers will lit­er­al­ly occupy market and air­space that air taxi com­pa­nies seek to lever­age. Public accep­tance, or rejec­tion, of small com­mer­cial UAVs will have impli­ca­tions for UAM as well.

The pull­back by large aero­space firms, Covid-19 notwith­stand­ing, indi­cates grow­ing recog­ni­tion that a UAM market may not pan out as imag­ined. Entry by auto­mo­tive play­ers seems as much part of a search for new rev­enue streams as a deep com­mit­ment to elec­tric air taxi ser­vices.

The mixed mes­sages and a lack of market devel­op­ment are forc­ing firms like Volocopter to find alter­nate ways to sur­vive.

“There’s no better way to gen­er­ate inter­est [in UAM] than throw­ing in the fear-of-miss­ing-out factor,” Aboulafia observes. “But Volocopter’s 300 Euro [$355] advance ticket price is real­i­ty.”

Volocopter’s plan to sell joyrides on its VoloCity eVTOL craft before it can offer pas­sen­ger trans­port ser­vice in the hazy future reflects some unap­peal­ing noise in UAM market.

Forbes: Aerospace & Defense source|articles

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