Winners and losers in the urban air mobility 'gold rush'
Ahead of the Global Urban Air Summit, FINN talks to Clive Lewis, Managing Partner, Achieving the Difference.
Research suggests the urban air mobility market will grow from $5.3 billion in 2018 to $15.2 billion by 2030, at a CAGR of 11.33%. Who will be the main beneficiaries of this new market and what will it take to succeed in it?
At the inaugural Global Urban Air Summit (GUAS) next month (September 3-4, Farnborough), Clive Lewis, Managing Partner, Achieving the Difference, will deliver a presentation entitled Is there money to be made in urban air mobility?.
Here, he talks to FINN about urban air mobility (UAM) and return on investment (ROI).
Sarah Wray (SW): Your session relates to ROI/profit in UAM. Where do you think the key revenue opportunities are in the sector and who for?
Clive Lewis (CL): Revenue opportunities exist in the UAM value chain but ROI/profit levels will vary considerably across it. The requirement for both technical and commercial innovation to deliver the service end is likely to require both upfront and long-term investment in technology and collaboration between all interested parties.
However, the value this creates is likely to lead to greater potential for high returns for those that can deliver offerings that meet customer requirements.
SW: How will business and financing models change in line with the UAM trend?
CL: We can expect to see a mix of established and new business and financial models used to deliver equipment, operations and services in the UAM sector. Many models have been identified that will require new business thinking and new technical competences.
The most scope for innovation is probably at the service end of the spectrum, where data management is key. In the long-term, services could even be provided free of charge in exchange for access to the data that use generates – the Google model.
Along the way, the free use of basic data-based services might be offered with users paying a premium for additional features.
SW: What are the challenges to making money in UAM?
CL: Most industry experts agree that the potential for UAM is huge because of the benefits it presents over alternative forms of transport, particularly in congested urban areas.
The actual value and timing will be determined by addressing constraints that include technology, legislation and regulation and social acceptance, amongst others.
SW: Will there be new financial losers as well as winners?
CL: The UAM market exhibits the signs of the classic ‘gold rush’ scenario. There will be some winners and many losers.
The number of UAM vehicles in development globally is in the hundreds and growing. Naturally, not all will make it into service.
Delivering at the cost required to stimulate significant mass-market demand is going to be challenging, and likely to require taking the pilot out of the vehicle.
Some conventional business models and technologies will be displaced by those that are more innovative in their approach to solutions.
SW: Who should come to your presentation and why?
CL: The opportunities in the UAM sector are great, but so are the risks. As ADS Urban Air Mobility Group Market Workstream lead and strategy practice, Achieving the Difference is working with government bodies, trade associations and businesses to help them understand the dynamics of the market so that they can make decisions with greater confidence.
So, the answer to your question is: anyone looking to make money or avoid losing it in urban air mobility.