Operators handbook for Air taxi missions

This post identifies key metrics for Air-taxi operators to model their business operation costs. It furthermore entails calculations for different vehicle types proposed to serve the Air Taxi market. Each relevant cost component like capital cost, maintenance cost, energy cost, battery cost, and infrastructure cost, among others, were modeled individually.

wassaf akhtar
7 min readApr 30, 2020


Concepts of operation for Air-taxi mission

A typical Air Taxi mission comprises of five main phases of flight: take-off, climb, cruise, descent, and disembarkation. Ground taxi time is added at both the origin and the destination. An additional transition phase (vertical to horizontal flight) is added between the take-off and climb phase for tilt-rotor, tilt-wing, and tilt duct type of aircraft. There is no horizontal movement considered during the transition phase. In this study, the reserve mission kicks off during the descent phase and follows a similar profile as the original mission i.e., take-off, climb, cruise (at cruise altitude and cruise speed), descent, and landing at another landing area.

Profile mission

Key operations related assumptions

For the first few years of operations, a pilot on-board will control the aircraft assuming no autonomy. Among other assumptions highlighted in Table below for the Monte Carlo analysis, it is expected that Air Taxis are to serve the longest mission of 50 miles with a single charge.

Operations related assumptions

Price per passenger mile

Here 7 different vehicle types with Electric, Hybrid, and JetA powertrains are proposed to serve broader UAM market:

(1) Conventional Helicopter — Type of rotorcraft in which lift and thrust are supplied by rotors (e.g., Robinson R22)

(2) Tilt Duct — eVTOL in which a propeller is inside a duct to increase thrust (e.g., Lilium Jet, Bartini)

(3) Coaxial Rotor — Rotors are mounted one above the other (e.g., GoFly)

(4) Lift + Cruise — Has independent thrusters for cruise and lift (e.g., Aurora Flight Sciences)

(5) Tilt Wing — Aircraft uses a wing that is horizontal for conventional forward flight and rotates up for vertical takeoff and landing (e.g., A3 Vahana)

(6) Compound Helicopter — Includes helicopter rotor-like system and one or more conventional propellers to provide forward thrust during cruising flight (e.g., HopFlyt)

(7) Tilt Rotor — Aircraft type which generates lift and propulsion by way of one or more powered rotors mounted on rotating engine pods or nacelles (e.g., Joby Aviation)

Technical specifications of different vehicle types (Top): Cruise speed VS Range, (Bottom): Aircraft price VS MTOW

Each vehicle type has distinct performance characteristics, in the case of tilt Ducts, they have significantly higher disk loading (i.e., higher engine power will be required to hover while Multirotor has a significantly low lift to drag ratio indicating lower performance). For the purpose of this analysis, the air taxi markets were evaluated using electric vehicle take-off and landing aircraft due to potentially lower environmental impact, lower dependence on fluctuating fuel prices, and lower operating costs. 70+ designs from the publicly available sources and developed technical specifications like speed, range, and weight, among others of reference vehicle for each of the remaining vehicle types were reviewed as shown in Figure below.

Aircraft specifications like vehicle cost and maximum take-off weight (MTOW) were calculated on per seat basis and were simply extrapolated for aircraft with more than one seat. Having developed reference vehicles for each vehicle type, the next step was to operate these vehicles on a randomly generated design mission. A ride-sharing business model (i.e., one or more passenger travels in an eVTOL and pays on a per passenger mile basis). All passengers are picked up at the origin skystop and are dropped off at the destination skystop. Ground transportation further provides the first and/or last-mile service.

Next, the operating cost per mile for each reference vehicle was calculated which is the sum of direct operating cost (DOC) and indirect operating cost (IOC). DOC includes capital, energy, battery, crew, maintenance, insurance, infrastructure, and route cost, while IOC includes marketing and reservation costs. Next, the pricing model and taxes were applied to calculate the price per passenger mile (i.e., cost to passenger). Each of the cost components of the direct operating cost was individually modeled for aircraft with 2–5 seats (1-seat aircraft was not considered due to pilot requirement), while indirect operating cost was calculated as a percent of direct operating cost (10–30%). Monte Carlo based sensitivity analysis was performed and 10,000 randomly generated iterations were performed. The table below shows key steps and the uncertainty ranges and assumptions used in modeling each of the cost components. (Monte Carlo simulations are used to model the probability of different outcomes in a process that cannot easily be predicted due to the intervention of random variables. It is a technique used to understand the impact of risk and uncertainty in prediction and forecasting models.)

Cost component assumptions

It was observed that the median operating cost per mile decreased as the vehicle’s number of seats increased due to economies of scale for maintenance costs, indirect operating costs, and capital costs. Multirotor(s) were found to have high operating costs per passenger mile due to lower cruise speed compared to other types of eVTOLs. For further analysis, median values were calculated for each seating category as each vehicle type competed for the same air-taxi market and had to be priced similarly.

Operating cost per passenger mile

A high degree of uncertainty in cost calculation was observed (shown by grey lines in Figure above), which was largely driven by assumptions related to network efficiency (utilization, load factor, and dead-end trips %) and cruise speed. It was noted in Figure below the importance of operating assumptions that: higher the network efficiency (i.e., high utilization, high load factor, and low dead-end trips %) and cruise speed, lower the operating cost per passenger mile.

Importance of operating assumptions

Maintenance cost, Capital Cost, and Crew Cost represented ~60–70% of the overall operating cost. Most of the cost components on per passenger basis decreased for aircraft with a greater number of seats.

Breakdown of costs

Operators are expected to use a variety of pricing strategies when selling air taxi services. For this analysis, a cost-plus profit pricing strategy for the operators with an assumed profit margin of 10–30% was employed. Finally, it was assumed that the Air taxis services will be subjected to taxes and fees like on-demand taxis or ride-sharing services. These taxes can range from sales tax, commercial motor tax, workers compensation fund, surcharge for public transportation, surcharge for accessibility, licensing fees, recall charges, inspection fees, environment tax, and local/state property tax. Each of these tax components depends on location and it was assumed a unified tax rate of 5–15%. It was observed that a 4-Seat eVTOL is expected to cost around $6.35 per passenger mile in the near term with an uncertainty of +/-50%, which was lower than currently operated helicopters, but higher than all the ground services. However, in the long term, with higher operational efficiency, battery costs per kWh decreasing to about 30$/kWH, Hydrogen-electric vehicles, technology improvement, and autonomy can potentially reduce the cost by 75% which is an unprecedented $1.6 per mile.

Price comparison with other modes of transportation

Operators are expected to first price their services based on the buyer’s perceived value of the service followed by bundle pricing and other cost-based methods. In the longer term, Air taxi operators might pursue the status quo over ground transportation considering the cost/mile costs being almost identical. George Jetson would be extremely proud..!

Get to know more about the author:

I am a Tech Entrepreneur with cross-functional and multi-disciplinary expertise. I have been lucky enough to work for Big brands in South Asia like Hindustan Aeronautics Limited where I worked on Military aircrafts involving Design, development, testing, modeling, integration, and qualification of various systems on aircraft employing standards, and procedures. I now work as a system designer for the Air taxi industry at McFly Aero infrastructure Ltd, the largest and fastest-growing advanced air mobility company focused on building the ecosystem in smart cities pan Asia-pacific region, rebuilding the World’s transportation system. Managing Governments, entrepreneurs, industry partners, private stakeholders, and top institutions across the world to potentially collaborate and provide smart solutions for creating smart cities.

I speak 3 languages (English, Arabic, Mandarin). When I am not writing or building businesses, you can catch me kicking a football, designing apparatuses, watching a Sci-fi movie or reading a book.



wassaf akhtar

High-Tech Entrepreneur (Aviation)