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OEM’s Capabilities their balance sheet, allowing fit of the aircraft, and its ability to
them to scale their operations be used to drive a sustainable
Given the complexities and diffi- more effectively. business model in the use cases
culties of building and certifying it was designed for. This will
an aircraft – consolidation and Unlike more established aviation assure financiers not only on the
failure is inevitable among AAM domains such as commercial potential marketability of the air-
OEMs. Aircraft may not make it aviation where capital from a craft (impacting residual value of
through to certification for a vari- variety of funding sources is the asset – important for operat-
ety of reasons, including the lack generally available to operators, ing leases), but also the potential
of experience from the OEM in the novelty of the AAM sector of the entire AAM industry.
certifying an aircraft, or because would give financiers pause as
the OEM has run out of a cash they would need to be assured Conclusion
runway to develop and certify that they are able to make a
the aircraft. In the selection of return on their investment, As AAM aircraft enter into ser-
an aircraft, operators need to including their principal. vice, potential operators will
assess whether the OEM has need to start considering how
enough technical partners, In engaging with financiers, they intend to operate these
engineers, and experience to get operators will need to have aircraft, and how they could be
through the certification process. clear business plans that clearly integrated into their respective
More importantly, operators will define the target customer businesses. Given the wide vari-
also need to assess whether segments, operating model, and ety of aircraft designs to choose
the OEM has sufficient funding economics of the proposed oper- from today, it is crucial that oper-
partners, investors, and orders ations. A well-thought business ators select an OEM and aircraft
to build up its cash runway. plan will go a long way in con- that not only fits their operational
vincing financiers of the ability needs but has the ability to get
Financing Issues for operators to repay their debts the aircraft certified. As greater
incurred in the purchase of the numbers of aircraft are required,
Given the expected high capital aircraft. operators will also need to start
investment required to acquire thinking about how to finance
AAM vehicles for AAM opera- Given the novelty of the sector, it their purchases – being able to
tions, operators will likely require is also imperative that the OEMs, demonstrate a sustainable com-
financing to help improve their together with the operators, can mercial model with these aircraft
cash position and strengthen demonstrate the product-market will be an important first step.
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