Is Urban Air Mobility an overhyped market?

wassaf akhtar
4 min readAug 29, 2019

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Embraer eVTOL in 2020

By Wassaf Akhtar | 29|8|2019

An industry which is to apply the principles of Marketing successfully needs a thorough knowledge of current and potential markets for its services. This knowledge should encompass an understanding of the business in which they participate, and of the market research techniques they must apply in order to gain the knowledge they need about the marketplace. They must be able to identify “Customers” and distinguish them from “Consumers”. They must segment their markets and identify the requirements of customers in each of the segments. Finally, and most importantly, they must examine their markets in a dynamic rather than a static sense and anticipate future changes in customer needs.

So, how big is the Urban Air Mobility industry (UAM)? We all hear cargo drones and air-taxis will change the way we live. Is the Disruption really coming? With the advent of technological advancements, legislative compliances being churned out by the top aviation bodies (FAA, NASA & EASA) & the infrastructure development taking shape in big cities, the big investments into this Industry should justify the means that are being considered for it.

The closest analogue that comes to UAM would be the market for Lightweight (LH) helicopter with a light single piston and turbine that is a 350 million dollar market annually. The current barriers of the UAM market are not technological, nor regulation or infrastructure, but it is, more importantly, a political & social issue. Overcoming them is going to be a mighty challenge and to be able to eclipse the market for a Lightweight helicopter (LH). The electric Vertical Take-Off and Landing (eVTOL) aircraft will replace LH in coast guard surveillance, police department, logistics, tourism, health care, private VVIP flights, flying clubs ownerships, private ownerships, and “so forth”. For civilian utilization, however, cost/mile would be extremely important, in driving the market towards Morgan Stanley's prediction (1.3 trillion dollars) industry by 2040. It should make economical sense for the general public to fly cheaper, Helicopters should not be a rich man’s transport system anymore.

The essence for UAM will be driven by economics, a guarantee of 60% reduction in operations cost, clean and quiet, cheaper transport from point A to Point B, a short-range regional requirement. Big players like Airbus, Boeing, Bell, Hyundai, Toyota et.al, who got involved in UAM in view of the fact of the disruption potential they sensed, a “threat” to their Heli-business. Helicopters are loud, energy cost is high, Complicated gearboxes, unsafe, expensive to maintain all the drawbacks will be countered with this new evolution and shall look very attractive to the investors.

The needle for UAM has been moving slightly, the concept of deurbanization also comes into the picture. Instead of clogging in the cities, crowding workplaces and jeopardizing the ecosystem, which puts a hell lot of a burden on the transportation system, people wouldn't mind living far off from the cities, and traveling to and fro from the rural areas to the city center and their workplace in a matter of minutes instead of hours. This opens up a widely new entire range of real estate market and concepts like rural air mobility is born.

The market will be stimulated on the basis of the technology and the current technology could multiply more than 100x which is an unprecedented 35 billion dollars in the next 10 years on the basis of public demands for short range travel, logistics and civil emergency requirements. Another interesting topic to touch upon would be the hybrid eVTOL market that’d be used for long-range missions, and it would be based on the regional requirement.

Coming to the conclusion, how far can this industry penetrate into the market? Only time will tell. On basing our outcomes as mentioned above, if political and social barriers are removed, Cost per mile ratio is kept low and widely accessible price points, the traditional light vertical lift market will soon be the next boom cycle and this enabling technology will change aviation for better.

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wassaf akhtar
wassaf akhtar

Written by wassaf akhtar

High-Tech Entrepreneur (Aviation)

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