Q&A: Sergio Cecutta goes through SMG Consulting’s AAM Reality Index and its biggest update to-date

SMG Con­sult­ing has released the biggest update of its AAM Real­i­ty Index to-date, with the addi­tion of two new eVTOL air­craft devel­op­ers and an info­graph­ic show­ing the cur­rent fund­ing received by OEMs.

The rat­ing tool describes the like­li­hood of an eVTOL air­craft devel­op­er cer­ti­fy­ing its air­craft, enter­ing ser­vice and pro­duc­ing thou­sands of units each year.

Join­ing the expand­ing list this time are Overair — the spin-off from Karem Air­craft which is work­ing with Han­wha Sys­tems to devel­op its But­ter­fly eVTOL — and Jaunt Air Mobil­i­ty. The pair join 16 oth­er com­pa­nies build­ing their own air­craft, after Dufour Aero­space and Archer made the list back in Feb­ru­ary.

Three rat­ings have also been updat­ed, with Volo­copter and Beta Tech­nolo­gies increas­ing their rank to 7.3 and 7.8 respec­tive­ly due to fund­ing, cer­ti­fi­ca­tion progress and pro­duc­tion readi­ness, while Bell has decreased to 3.4.

We caught up with Ser­gio Cecut­ta, Part­ner of SMG Con­sult­ing, who told us more about this lat­est real­i­ty index and the new addi­tions.

Q: This is the biggest update to the AAM Real­i­ty Index to-date. Can you tell us what is new this time?

Ser­gio Cecut­ta: “The update this month includes three updates to the dif­fer­ent OEMs and the inclu­sion of two new ones. We also have updates to some first flight and entry into ser­vice dates and last but not least, we’ve also cre­at­ed two new info­graph­ics for the web­site. One is the fund­ing for the indus­try and the sec­ond is a lit­tle bit of his­to­ry of the index, so one can at a glance see how com­pa­nies have been mov­ing until now.”

Q: Jaunt Air Mobil­i­ty and Overair are the lat­est eVTOL OEMs to join the list. What were the rea­sons why they were cho­sen?

SC: “Overair and Jaunt were both part of the orig­i­nal Uber Ele­vate num­ber of com­pa­nies. Both of them are doing great work and have signed part­ner­ships; Overair is work­ing with Han­wha Sys­tems in Korea and Jaunt has cre­at­ed a lot of part­ner­ships across the ecosys­tem. We felt these were two impor­tant com­pa­nies which were miss­ing from the index, and need­ed to gath­er enough infor­ma­tion so we could add them.”

Q: “The index has under­gone a lot of updates since we last spoke. Have you received any fur­ther feed­back now that the index is pro­vid­ing more infor­ma­tion about the indus­try?

SC: “We con­tin­ue to get a lot of good feed­back. I think peo­ple inside the indus­try have been look­ing for a way to quick­ly com­pare all the com­pa­nies, and those out­side the of indus­try, even stu­dents, are inter­est­ed in the index as they are look­ing at this mar­ket and want to enter it.

“They think this is a great resource because at a quick glance, they can get a good under­stand­ing of the OEM side of the indus­try. As we always say, the strength of the index is its sim­plic­i­ty as we made the tar­get­ed choice to put togeth­er a rank­ing that is sim­ple and easy to com­pare between dif­fer­ent com­pa­nies.”

Q: As well as the two new eVTOL OEMs, there are also some new rat­ings for Bell, Beta Tech­nolo­gies and Volo­copter. Can you tell us more?

SC: Yes, you’re cor­rect and those are the three big changes. We’ve seen the CEO of Bell take a ‘wait-and-see’ approach to the mar­ket, so its effort is very very low lev­el. Beta, we know about the addi­tion­al fund­ing and its mil­i­tary air­wor­thi­ness announce­ment, and Volo­copter intro­duced the Volo­Con­nect as well as going into more detail about their cer­ti­fi­ca­tion process and pro­duc­tion plans. So that allowed us to update its posi­tion as well.”

Q: It’s great to see the efforts put in by the AAM Real­i­ty Index. Did you want to share your thoughts on the mar­ket so far, giv­en the recent announce­ments from Ver­ti­cal Aero­space and Archer?

SC: “Yes and in fact, over the next cou­ple of days we will have an update to the AAM fund­ing to take into account Ver­ti­cal’s recent SPAC merg­er. It is not going to be updat­ed at the same time as the index for the sim­ple rea­son that there is a lot of news when it comes to fund­ing. We have already tak­en into account what hap­pens when Joby Avi­a­tion, Lil­i­um and Archer’s SPAC deals close; we’re in the process of adding Ver­ti­cal, and we’ll then see what hap­pens with the news from Eve or any oth­er SPACs being worked on.”

Q: Why is an index like this impor­tant for the indus­try?

SC: “We see we see the index as being impor­tant for three rea­sons. First is the fact that it allow most peo­ple both in and out of the indus­try to focus on the com­pa­nies which are putting in the major­i­ty of the work, attract­ing the major­i­ty of the invest­ment and major­i­ty of inter­est.

“The sec­ond point is that it becomes a way for com­pa­nies to mea­sure each oth­er. In as far as you know their progress and how they’re doing. And last but not least, it gives us the holis­tic view of the entire indus­try that is very data dri­ven. So we can just look at the indus­try in a very detached way and with­out any feel­ing. E.g. you know this com­pa­ny is bet­ter than the oth­er, but it’s just based on num­bers.”

Q: It’s been a more than six months since the index was launched. Has it exceed­ed expec­ta­tions from your point of view?

SC: “We were hop­ing it’s a lit­tle bit like a child; hop­ing it would be with­in reach of its full poten­tial. We’re very hap­py with the recep­tion of the indus­try. The goal, as you’ve seen with these updates is not to rest on our lau­rels. We take the feed­back very much into account; whether it’s pos­i­tive or neg­a­tive, it’s great to know what the pub­lic thinks. That’s why you’ve now seen the fund­ing com­ing in and we have oth­er ideas that we want to track in the index.

“We talked about oth­er pieces of the ecosys­tem, like oper­a­tors, infra­struc­ture and MRO. But we’re not track­ing because I think there’s still a lev­el of devel­op­ment that is not com­pa­ra­ble with the eVTOL air­craft. But with­in a cer­tain point, it’s going to be an impor­tant part. And I think this is one of the strengths. As the indus­try con­tin­ues to evolve at a fast pace, we want to make sure the index con­tin­ues to evolve at the same pace and con­tin­ue to pro­vide ben­e­fits to the indus­try.”

Q: Any­thing else you’d like to add, Ser­gio?

“I think the finan­cial parts have been real­ly inter­est­ing. The issue with the finan­cial piece is that every­one accounts for fund­ing in a slight­ly dif­fer­ent way. So we put a lot of effort to make sure all the num­bers are cor­rect, espe­cial­ly it comes to the SPAC deals — con­sid­er­ing there are many dif­fer­ent pieces that go into them.

“We’re hap­py the indus­try is get­ting a sig­nif­i­cant amount of cov­er­age. And I think what we’re also hap­py about is the inter­est for this part of aero­space is now com­pa­ra­ble, if not high­er than clas­sic aero­space. It’s get­ting into the ver­nac­u­lar of every­day con­ver­sa­tion and into the press that peo­ple out­side of the sec­tor read. And I think that is impor­tant when it comes to accep­tance of the vehi­cles in the ecosys­tem.”