Adam Twidell’s predictions for the AAM industry in 2024
As the Advanced Air Mobility (AAM) industry races into 2024, and ever closer to the start of commercial operations, pilot, entrepreneur, board director, CEO and leader Adam Twidell makes his predictions for what to expect from the year ahead.
Advanced Air Mobility was kick-started in 2016 when Uber launched their Elevate conference. Having the company that had transformed ground transport endorse the future potential of AAM was a pivotal moment and the catalyst for a tidal wave of investment. Over the next few years more than 500 new aircraft manufacturing start-ups were founded, each taking a share of the $7bn of investment that has been poured into the sector.
The sector has now been properly kick-started with substantial funding and vitally enjoys the support of the regulators and governments, who need to show they are serious about de-carbonising aviation.
In 2023 we saw multiple new and novel electric aircraft take to the skies, taking important next steps as proof of concept for their technology. The subsequent challenges that lie ahead are possibly more difficult to overcome. Not only do the regulators have to be assured of the safety case and produce sensible operational flying rules, but the travelling public needs to be convinced that these aircraft are indeed sustainable and have benefits for society.
So to the year ahead and my predictions for the world of Advanced Air Mobility. Here is what I expect to see in 2024:
1. Relaxation of some of the certification and regulatory process
In 2023 both the FAA and EASA published their current thinking on how eVTOLs will be regulated in terms of operations and pilot licensing. The FAA’s SFAR was especially hard reading for the new OEMs – with potential crippling decisions over requiring dual controls for training aircraft and enforcing their current time-related energy reserve for battery-powered aircraft. My prediction is that in 2024 the FAA will soften some of their proposed regulations but refuse to budge on others. They will appease the industry with a timetable to relax the regulations further, but only after a demonstrated period of safe operations. For some of the OEMs, the burden of the number of changes required for their certification will choke their investment pipeline; resulting in the next prediction…
2. A few of the eVTOL frontrunners will run out of cash
Using the Very Light Jet (VLJ) market entrants as a history lesson, it is highly unlikely that even 10% of the current 500 AAM manufacturers will survive through certification and into production, let alone profitability. Most industry veterans predict that in a decade from now we will be left under 25 commercial eVTOL manufacturers (~5%) at best. Unfortunately, 2024 will be a tough year for those who didn’t make enough of the free-flowing investment funding period. Those who fall behind their timelines will find that the capital markets are drying up. It will be very hard to raise more cash for aircraft development when the market leaders are already flying commercial operations and generating revenue. Those who have a short runway of remaining funds will be forced into accepting smaller tranches of investment that will be coupled with significant shareholder dilution. The adage of “raise more money than you think you need”, will ring true. The first mover advantage, for those who are now flying their production aircraft, will be increasingly apparent.
3. Competitor consolidation and cooperation
Despite the lawsuits, 2023 saw some interesting collaboration between eVTOL manufacturers. Beta Technology from Vermont saw competitors sign up to their expanding charging network and Wisk & Archer kissed and made up; with announcements of technology partnerships and share swaps. The New Year will continue to be a love-in for new partnerships, sharing resources and technology. Where the egos of founders and the cap tables of investors allow, we will see the benefits of scale emerge – Go big or go home in 2024!
4. Commercial operations will begin
Look to the East for a significant shift in momentum, with Chinese manufacturers eHang and Autoflight leading the way. Whilst those applying for certification under the FAA & European regulators will call foul, there is no doubt that Asian and Middle Eastern aviation regulators will expedite their processes to take centre stage as progressive world leaders in the decarbonisation of aviation through AAM. Just as Elon Musk’s SpaceX takes huge development lessons from its rocket malfunctions, so will these early commercial operators of eVTOLs. Every incident will only serve to improve their aircraft’s reliability and robustness, even if these occurrences are not published or reported to the wider world. Further advantages will then follow, with revenue from early commercial operations strengthening balance books and encouraging follow-on rounds of funding.
5. Advancements in battery technology
The world’s biggest maker of electric vehicle batteries, CATL, announced in 2023 that they have broken new ground in battery technology. They suggested that they are close to doubling the energy density of batteries (breaking through the magical 500 Wh/kg that will almost triple the range of battery powered aircraft). Whether CATL can deliver these energy densities all the way through to production grade batteries in 2024 or not, we will see aviation batteries dramatically improve in the coming years. With a considerable amount of a battery’s weight being in the casing, just redesigning how the cells are packed together efficiently will drastically improve their overall energy density.
6. Hybrids will come of age
With the harsh realities of current range limitations from pure battery power alone, those with hybrid designs may power ahead this year. What is now fully understood is that a significant percentage of battery power for an electric aircraft must be held in reserve for the possibility of air traffic holding or diversion. With a hybrid design, this reserve energy can be stored in traditional aviation fuel – even if it is rarely required. In 2023, Ampaire and VoltAero were two examples of hybrid electric aircraft that proved that over 50% of fuel can be saved when batteries are coupled with conventional powered engines or generators. This coming year, it will become even more apparent that decarbonising aviation will take hundreds of iterations of aircraft technology, and this is a marathon not a sprint. If short-haul regional airlines can switch to hybrid-electric aircraft, this will be a very meaningful step in the right direction. Going green does not have to happen in one dramatic colour change, evolving by shades is positive progress.
7. Public perception and acceptance takes time
Perhaps the biggest upset of 2023 for the industry was a dramatic refusal from the Paris Planning Committee regarding Volocopter’s Vertiport initial application for flights during the Olympics this year. We are all still hoping that the Paris Olympics will be a fantastic stage for Volocopter to demonstrate commercial electric passenger flying for the first time in Europe. However it’s clear that we, as a new sector in aviation, need to take the public with us on our development journey, not assume that electric aircraft with automatically be loved by all. In 2024 the manufacturers will turn to their industry association for support in reaching out to the public. This process needs to be carefully managed, with energy and commitment from across the industry, starting with grass root education in schools and colleges. We need the flyers of tomorrow to be on our side from the beginning.
8. Government incentives and back-door funding
Aviation has never been a level playing field and the success of an aircraft manufacturer has always been dependant on support from their regional and national governments – especially for a sector in start-up mode. When Asia dominated the drone manufacturing market it was said that the America administration would not let this happen again in other new flying sectors. So far that desire seems to be true with huge tranches of regional and federal funding being provided to selected USA electric aircraft companies. The USAF agility programme alone has injected hundreds of millions of dollars for questionable returns to its short-term military objectives. These long-term investments are effectively free government grants to the American frontrunners in the Advanced Air Mobility manufacturing race. The European Union now needs to coordinate how they too can support their electric manufacturers under a much more complex political framework. Without government support, it will be hard for any of the OEMs to compete on a global scale.
9. Ground infrastructure developments will be frustratingly slow
In 2024 we are facing a chicken and egg situation between the aircraft and the ground infrastructure needed to reach scaled-up operations. The general message from the regulators is that they would like to see safe operations from existing airports and heliports before new vertiports will be licenced. Furthermore, whilst the aviation authorities control the skies, the planning permissions for any new landing site is very much under the control of the local planning. And like we saw in Paris (see #7 above), not everyone is as keen as we are to fill the skies with our new sustainable aircraft. Even if new Vertiports could be granted building permission, the value of any prime location landing site is extremely high, and investors will need to be convinced that the flying public will follow. The exception will be for dual use landing sites, that can absorb traditional helicopter movements in the interim, before electric operations can begin.That is the real opportunity that can be grabbed in 2024.
10. Good news will fly, bad news will be grounded
Get ready for many more amazing video clips and reels, as the marketing teams of all the leading players will be pumping out their good news stories in 2024. The X-factor of aviation sales has always been the ability to woo customers and investors with dramatic soundtracked videos of aircraft taking to the skies, and electric aviation just adds an extra magical ingredient to the marketing mix. With so many new aircraft launches planned for 2024, it is going to be a glitzy and very watchable year. However the bad news stories will be held back, even from most within the organisation being affected. Unfortunately, when companies collapse, the employees are sometimes the last to find out. These are just ten key predictions for what will be a busy year of progress ahead. I’m looking forward to checking back at the end of 2024 to see how many of these predictions come to bear. But I am certainly not wishing the year away – we all have a huge amount of hard work and fun ahead to enjoy. 2024 is going to be an epic year for Advanced Aviation. If you are not part of it, keep looking for ways in, we need you!
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