Alton Aviation predicts 2023 will see AAM entry-into-service

Alton Avi­a­tion Con­sul­tan­cy says that 2023 will see the AAM indus­try edge towards entry-into-ser­vice (EIS) and the start of com­mer­cial­i­sa­tion.

Joshua Ng, direc­tor of Alton’s Sin­ga­pore office, said: “With sev­er­al lead­ing eVTOL devel­op­ers com­mit­ted to EIS in 2025, this is the year in which the rub­ber must start meet­ing the road.

“Across a range of mis­sion-crit­i­cal fac­tors, includ­ing fund­ing, pro­duc­tion ramp-up, and reg­u­la­tion, cru­cial mile­stones must be passed this year to keep the vision on track and deter­mine the industry’s ulti­mate win­ners.”

Accord­ing to Alton’s analy­sis, major AAM OEMs have to date raised more than $8b from investors and received 12,000 orders from cus­tomers around the globe.

Ng added: “Despite fundrais­ing suc­cess­es to date, OEMs will need to raise fur­ther cap­i­tal pri­or to and through EIS. Pre-deliv­ery pay­ments from cus­tomers will play an impor­tant role in the fund­ing mix.

“In August 2022, Unit­ed Air­lines com­mit­ted $10m in pre-deliv­ery pay­ments for 100 Archer eVTOL air­craft. This year, the eyes will be on which OEMs can repli­cate that suc­cess with oth­er cus­tomers.”

“This addi­tion­al cap­i­tal will be need­ed because OEMs are expect­ing to hit major vehi­cle cer­ti­fi­ca­tion mile­stones over the next 24 months. To scale man­u­fac­tur­ing, they will need to enhance exist­ing sites and devel­op advanced facil­i­ties to man­u­fac­ture pro­duc­tion com­pli­ant air­craft, both to meet EIS tar­gets and ramp-up pro­duc­tion beyond first deliv­er­ies.”

Alton notes that OEMs’ EIS mile­stones also depend on reg­u­la­tors such as the US FAA and Euro­pean Union Avi­a­tion Safe­ty Agency (EASA) con­tin­u­ing to fast-track their own efforts.

Accord­ing to Alton, half of air­craft orders to Decem­ber 2022 were placed by com­mer­cial pas­sen­ger oper­a­tors, while 30% were made by busi­ness and gen­er­al avi­a­tion oper­a­tors. Alton’s analy­sis sees glob­al eVTOL orders in the peri­od equat­ing to approx­i­mate­ly 7% of the cur­rent com­mer­cial avi­a­tion and busi­ness and gen­er­al avi­a­tion fleet. Alton’s analy­sis focus­es on third-par­ty air­craft orders, exclud­ing oper­a­tors which intend to oper­ate their own fleets.

Alan Lim, engage­ment man­ag­er in Alton’s Sin­ga­pore office, con­tin­ued: “Although some oper­a­tors have com­mit­ted to one type of eVTOL air­craft, oper­a­tors such as Bris­tow Group have split orders between mul­ti­ple OEMs.

“The deci­sion to imple­ment a diverse order strat­e­gy may be part­ly to lessen the operator’s risk expo­sure to a sin­gle OEM, and part­ly to favor dif­fer­ent air­craft designs for dif­fer­ent mis­sions such as pas­sen­ger trans­port, car­go, and mede­vac.”

Alton’s mar­ket study notes that North Amer­i­ca, which accounts for around 55% of total eVTOL orders, is dri­ving the growth of the AAM sec­tor, with oper­a­tors there order­ing three times more air vehi­cles than in the next biggest region.