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for AAM operations remains underdeveloped
while certification and airworthiness stan-
dards are yet to aspire confidence, the experts
add.

“Stakeholders must address risks proactively
to ensure the growth and resilience of the
entire ecosystem,” says the report. “Further,
they must enhance risk identification, invest
in risk readiness, and boost collaboration.
Improved foresight, cross-sector collabo-
ration and international cooperation are
essential for the collective resilience of the
AAM industry.”

Getting the backing of the general public is
proving not so easy. In the U.S., local gov-
ernments, environmental advocates and
hundreds of concerned citizens have written
to the Federal Aviation Administration (FAA)
expressing concern and skepticism about the
agency’s plans to enable large-scale air-taxi outlook, in the short term, is for Enterprise AAM applications
operations by 2028. The mood is not dissimi- such as aerial operations with drones, such as inspection, map-
lar in Europe; a 2021 report by management ping or surveillance activities. The rosier short-term outlook for
consulting firm McKinsey on behalf of the AAM logistics and enterprise applications is primarily because of
European Union Aviation Safety Agency perceived lower regulatory hurdles, fewer safety concerns, and
(EASA) said that while residents were gen- fewer public acceptance issues associated with such services
erally in favor of UAM operations, citizens than with transporting people.
wanted to limit their own exposure to risks
related to safety, noise, security and environ- Shifting Focus
mental impact. The report also underscored a
limited trust in the security and cyber security Investors in the industry seem to share the view of the experts.
of UAM. According to according to management consulting firm
McKinsey’s Future Air Mobility (FAM) report published at the
However, it is not all gloom for the indus- Paris Air Show in June this year, a large chunk of the invest-
try, even in the short-term. According to the ment in the young industry has gone to surveillance and cargo
survey, the outlook for logistic applications, drone players, a significant change from previous years when
which include cargo deliveries on the last urban air mobility (UAM) companies got a bigger piece of the
mile and transporting goods and supplies pie. Surveillance and cargo drone players accounted for 51 per
over longer distances, is more optimistic. cent of funding year to date (YTD) in 2023, up from less than 15
Airspace integration challenges, regulatory per cent in previous years.
delays and battery technology shortcomings
however pose a challenge even for AAM logis- Funding for the sector continues to flow. According to McKinsey,
tics services, experts say. The most optimistic US$19.8 billion has been raised over the last decade for FAM, with
disclosed funding for the sector touching US$4.8 billion over the
last 12 months. US$2.5 billion was raised in the first six months
this year, up 15 per cent from the first six months of 2022.

McKinsey also sees headwinds for the fledgling sector in the next
couple of years. Public eVTOL companies have an estimated ten
to 33 months of cash remaining, based on current spend levels
and cash on hand, its report says. Some companies could reach
certification with their current cash reserves but could still need
additional capital to fund the subsequent production phase.
“Further, it will take time for companies to ramp up operations
to full scale, limiting revenues from passenger tickets. Finally, pro-
gramme delays are highly common in new aircraft programmes;
multiple FAM companies have already announced such delays,
and more are likely to follow.”
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