Interview with Vice-President of Aerospace and Defence at Frost & Sullivan, Mike Rowe: “By 2040, 2.5 million Flying Taxis will be required globally”

After a suc­cess­ful career in the British Army, Mike Rowe moved to the aero­space indus­try in 2003. First as a sys­tems archi­tect, then run­ning the Thales Glob­al Oper­a­tional Analy­sis Lab­o­ra­to­ry, before mov­ing into Direc­tor posi­tions in var­i­ous inter­na­tion­al busi­ness devel­op­ment and P&L man­age­ment.

Today, he is Vice Pres­i­dent of Aero­space and Defence at Frost & Sul­li­van, a growth advi­so­ry and ana­lyt­ics firm, help­ing com­pa­nies iden­ti­fy, plan and cap­ture growth oppor­tu­ni­ties around the world. His exper­tise includes both the drone and eVTOL indus­tries.

While Rowe was speak­ing at last month’s Lon­don DroneX event via an ARPAS UK dis­cus­sion forum enti­tled, “State of the Drone and AAM Mar­ket,” he said, “By 2040, 2.5 mil­lion fly­ing taxis will be required glob­al­ly.”

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Please explain the research behind this view?

In late 2019, we were asked by pri­vate clients to car­ry out research on the poten­tial of the UAM indus­try. The study took 5 months. There was a col­lab­o­ra­tive team of 10 peo­ple. It was com­plet­ed by the Spring of 2020.

This research used cus­tomer and con­sumer sur­veys in sev­er­al cities to under­stand the per­cep­tions of indus­try stake­hold­ers (B2B) and cus­tomers (B2C) on the usage of UAM as a mode of trans­porta­tion for pas­sen­gers and freight.

The study fur­ther assessed the per­ceived UAM oper­a­tional readi­ness of more than 100 cities around the world to high­light those most like­ly to offer UAM capa­bil­i­ty and pro­vid­ed the glob­al mar­ket rev­enue fore­cast until 2040. In addi­tion to the cus­tomer and con­sumer sur­veys, the study cov­ered 60 para­me­ters assess­ing a city’s trans­porta­tion and mobil­i­ty pro­file, UAS and aero­space exper­tise, and lev­el of digi­ti­sa­tion to mea­sure that city’s readi­ness for air taxis. Our find­ings were nev­er pub­lished pub­licly.

Name some of the cities?

Our find­ings showed that the top 10 cities with “a propen­si­ty to adopt” fly­ing taxis and most like­ly to offer UAM ser­vices are:-

Dubai, Lon­don, Los Ange­les, San Fran­cis­co, Sao Pao­lo, Sin­ga­pore, Paris, Rio De Janeiro, Van­cou­ver and Dal­las. Also, we found that the Mid­dle East is the most will­ing to adopt, with Dubai becom­ing the region’s cen­tre.

Why is this?

There is a polit­i­cal deter­mi­na­tion by the lead­er­ship, less red tape to cross, with plen­ty of desert for the air­craft to fly over.

Which eVTOL com­pa­nies could be suc­cess­ful here?

Joby is the mar­ket leader, cer­tain­ly, as well as EHang who is the first eVTOL com­pa­ny to Type Cer­ti­fi­ca­tion. Then there is Volo­copter. Archer still has much to prove.

In the drone mar­ket, Dron­am­ics is best placed to be the “Ama­zon white van in the sky”. Its craft only requires a 300 metre run­way and with the recent MOU sign­ing with Emi­rates Post Group, this places the com­pa­ny in a strong posi­tion.

Do you reck­on NEOM will have an influ­ence?

Absolute­ly. It will be con­struct­ed and attract a lot of inter­na­tion­al inter­est and busi­ness, great­ly assist­ing the growth of the UAM indus­try in the region.

What did your study find out about the poten­tial glob­al con­sumer?

A major­i­ty of respon­dents (53 per­cent) would pre­fer to have a human pilot oper­at­ing the air taxi.  Over 60 per­cent declared that trav­el time is the main deter­min­ing fac­tor when choos­ing what mode of trans­port they use to trav­el to work. The main rea­son for the unwill­ing­ness to use air taxis is the per­cep­tion that trips would be too expen­sive. This was fol­lowed by the next most pop­u­lar con­cern of air­craft safe­ty.

Across 12 cities sur­veyed, poten­tial cus­tomers would be will­ing to pay between USD17 and USD50 for shared air taxi trips (car­pool-style approach) and USD50 and USD110 for per­son­al air taxi trips (Uber-style approach). 

And what of the finan­cial remu­ner­a­tion for the UAM indus­try?

Over­all, the ser­vice­able address­able mar­ket across inter­ci­ty and intracity jour­ney types is esti­mat­ed to gen­er­ate USD2.7 tril­lion in OEM and oper­a­tions ser­vices rev­enues by 2040. Fur­ther­more, cumu­la­tive con­sumer demand will trans­late into an esti­mat­ed need for 2.5 mil­lion air taxi plat­form units across the var­i­ous vehi­cle capac­i­ty types (one, two and four pas­sen­gers). While Lon­don tops the rank­ing of cities assessed to be the most attrac­tive to host UAM oper­a­tions, Dubai is expect­ed to become the first, glob­al­ly, dur­ing 2025/26.

With the grow­ing impor­tance of UAM ser­vices with­in the trans­port infra­struc­ture of cities, inte­grat­ing this seg­ment with the air­port is crit­i­cal. This must be part of any airport’s mas­ter plan, espe­cial­ly regard­ing future oper­a­tional and infra­struc­ture plan­ning.

Paris — The First Euro­pean City to Adopt Fly­ing Taxi Oper­a­tions

What about oth­er areas of the world? 

While Lon­don is assessed to be the most attrac­tive in Europe, Paris could become the first adopter due to the Olympic Games next sum­mer with the coun­try’s desire to incor­po­rate fly­ing taxis in to its trans­porta­tion sys­tem.

What of autonomous fly­ing air­craft?

Ini­tial­ly, a major­i­ty of fly­ing taxis will have pilots. I can’t see glob­al auton­o­my occur­ring until 2030 at the ear­li­est. When this occurs, pas­sen­ger fares will come down sub­stan­tial­ly. Per­haps, to around USD5 a mile. Until then I do not see how the indus­try can be prof­itable. eVTOL com­pa­nies may be los­ing mon­ey for at least the first five to ten years. For investors it is play­ing the long game. It took Google 20 years before gen­er­at­ing healthy prof­its.

Bat­tery improve­ments may also help the indus­try become prof­itable. We should have sol­id state ones with­in five years which means more dis­tance on one charge and no poten­tial fires.

Please explain more about the bat­tery tech­nol­o­gy? 

At present, the num­ber of pas­sen­gers an eVTOL can car­ry is down to the pow­er of the exist­ing bat­ter­ies. Far more den­si­ty is required if a com­pa­ny wants to build an air­craft that car­ries more peo­ple. Five to six is prob­a­bly the max­i­mum right now and that would only be for very short dis­tances.

While VTOL and hydro­gen propul­sion sys­tems is one way for­ward, these still require elec­tric engines.

A com­mon dif­fi­cul­ty faced is the infra­struc­ture, in par­tic­u­lar the con­struc­tion of ver­ti­ports. What are your views?

In already high­ly con­gest­ed cities, space is at a pre­mi­um. There­fore, trans­form­ing present heli­pads into ver­ti­ports is an ini­tial way for­ward. Brown­field sites on the out­skirts of Lon­don, for exam­ple, could be used for con­struc­tion, along­side, of course, at exist­ing air­ports.

What is most crit­i­cal for the future suc­cess of the UAM mar­ket?

Safe­ty, safe­ty, safe­ty comes first, but Gov­ern­ment sup­port is also vital. With­out that, it will be a long, hard and upward strug­gle for cities to embrace this mar­ket.

Do you have plans for anoth­er and sim­i­lar report?

While Covid has dri­ven a bus through the indus­try, we still stick with our 2020 find­ings, although we may revis­it it.

For more infor­ma­tion

https://www.frost.com

(Top image: Mike Rowe)