McKinsey: Investment in AAM start-ups exceeded $15 billion in the first ten months of 2022
McKinsey & Company says eVTOL investors made a total disclosed investment in AAM start-ups exceeding $15 billion through the first ten months of 2022. If governments begin certifying AAM passenger travel starting in 2025 as expected, eVTOL entry into service could occur in the mid to late 2020s.
To put the AAM software opportunity in perspective, commercial airlines spent more than $50 billion on software and information technology in 2020, roughly five percent of their total spending.
Digital platforms for AAM will need to be built and tested relatively quickly, as they need to be available in time for entry to service of eVTOLs in three to five years. By contrast, traditional aviation software evolved over decades.
New operational needs must be addressed as air mobility operations may sometimes be more complex, especially as passenger volumes rise, and flight delays or cancellations may be common, especially in the early days of the industry.
Digital platforms for AAM must address the industry’s unique needs, including operations at vertiports, battery management, and intermodal integration. eVTOLs may only be used for one leg of a passenger’s journey, and multimodal platforms that ensure a seamless transition to ride-hailing vehicles or other transport modes will be essential.
AAM relies on important technological advances in battery developments and autonomous flight. As with commercial airlines, AAM operators will need software to manage staffing of vertiport ground personnel and ensure that aircraft and crews are routed appropriately.
The number of flights involving smaller aircraft traveling shorter distances will increase, so the number of people transported on AAM flights may eventually exceed the volumes for commercial and business aviation for large operators.
In commercial aviation, demand is relatively predictable and operators may set flight schedules up to a year in advance. With AAM, by contrast, demand is more uncertain because bookings will occur hours, if not minutes, before a flight.
While traditional aircraft carry fuel for diversions with at least 30 minutes of additional circling and holding, that will not be possible for eVTOLs because of tight battery capacity.
Special platforms may also be required if vertiports are to offer value-added services like eVTOL and automotive charging facilities, maintenance, repair, and overhaul services, or e‑commerce such as click-and-collect delivery of consumables for eVTOL riders.
Operators must decide whether they want to own certain parts or simply enter agreements with mobility platforms that will manage them, and consider the process by which a customer books an eVTOL flight through a ride-hailing platform.
Batteries will largely determine whether operators can make a profit, and they may choose to assign aircraft with the most depleted batteries to shorter missions to prolong their use in service.
While most eVTOLs will have a pilot in the aircraft during entry into service, many operators envision a world in which flights are highly autonomous. An operator would need the ability to take control of an aircraft remotely in the event of an emergency and land it safely.
In the early stages of AAM, there may be a need for billing and invoicing software, weather tracking, and crew scheduling. In time, these tasks may become commoditised, and many companies may choose to procure them from third parties if they are not the long-term natural owner.
In May 2021, The European Union Aviation Safety Agency (EASA) published results of the first study conducted with McKinsey on Urban Air Mobility, which showed 83 per cent of respondents have a positive initial attitude and 71 per cent are ready to try out services.
