Urban Air Mobility Market

Market Overview

The global urban air mobility market size was valued at USD 1,740 million in 2021. It is expected to reach USD 6,232 million by 2030, growing at a CAGR of 17.29% during the forecast period (2022–2030).

Urban Air Mobility (UAM) refers to the use of compact, highly-automated aircraft to transport passengers or freight at lower altitudes in urban and suburban regions as a reaction to traffic congestion. It typically refers to existing and developing technology such as conventional helicopters, vertical-takeoff-and-landing aircraft (VTOL), electrically propelled vertical-takeoff-and-landing aircraft (eVTOL), and unmanned aerial vehicles (UAVs). Urban air mobility is a part of the Advanced Air Mobility (AAM) concept, which encompasses more use cases than only intracity passenger transportation. This rapidly developing mode of transportation offers seamless regional mobility, on-demand mobility in isolated and densely populated locations, efficient and environmentally responsible human and unmanned passenger and freight transport, and on-demand mobility nationwide.

UAM enhances transportation effectiveness while minimizing environmental impact in urban and interurban areas. It provides appealing mobility-on-demand solutions at an urban, suburban, and inter-urban level, considering the expenses and the time value saved by airborne solutions. The goal is to transition short- and medium-distance passenger automobile rides and medium- and long-distance freight transfers to light aircraft. The market is anticipated to rise due to urbanization, increased traffic congestion, and rising investment in urban air mobility ecosystems. The urban air mobility industry has attracted a lot of investment, and many aerospace start-ups and established firms see this market as having one of the highest development potentials. As a result, these variables are anticipated to fuel market expansion during the anticipated period.

Market Dynamics

Market Driver

Advancements in Aviation Technology and Autonomous Driving

The development of aviation technologies is generating the opportunity for metropolitan regions to offer easy and cost-effective on-demand transportation for people and goods. Urban Air Mobility (UAM) is a concept for transportation that might completely restructure how people move around in society. Urban air transit that is highly accessible, quick, and economical is suggested, which would relieve ground-based traffic by using the existing vehicle transportation infrastructure. UAM depends on technological advances like distributed electric propulsion, new business models like application-based ride-sharing, and developments in advanced aerospace manufacturing that will lower production costs.

To realize the autonomous UAM vision, increasing the credit of vehicle automation and autonomous vehicle operations will be essential. An economically feasible transportation system to support the enormous demand will require autonomy. The urban air mobility market will primarily be driven by significant advancements in the technological maturity of stable, maneuverable, vertical take-off and landing (VTOL) vehicles and highly autonomous flight.

Additionally, according to statistics from the International Air Transport Association (IATA), there could be 8.2 billion people using aircraft worldwide by 2037. By 2050, 68% of people will live in urban settings, according to the UN. The increasing use of vehicles in cities has led to several traffic and mobility problems, increasing the demand for alternate forms of transportation. UAM aircraft like eVTOLs, VTOLs, and STOLs have become practical substitutes in this regard. Thus, such factors will drive the global urban air mobility market in the coming years.

Market Restraint

Psychological Barriers

The NASA UAM Market Study - Potential Societal Barriers of Urban Air Mobility article claims folks are neutral to positive about the concept of UAM. Men, younger respondents, and those from affluent backgrounds tended to be more enthusiastic about the idea. However, in the willingness-to-fly model, none of the metro areas showed relevance. Another psychological hurdle is the widespread belief that the increased usage of new aircraft for purposes such as air taxis, air ambulances, cargo deliveries, and last-mile delivery will lead to a significant loss of jobs. In addition, passengers are worried about security screening and would only choose UAM for lengthier journeys. Consequently, this is an obstacle to the complete adoption of this technology.

Market Opportunities

Growing Concerns Regarding Environment

The transportation sector is accountable for effective energy use and is the second most polluting industry. The climate is negatively impacted by this sector's significant greenhouse gas emissions. Such issues may have a workable solution in urban air mobility, which employs electric vertical take-off and landing (eVTOL) aircraft. Cities' adoption of unmanned systems for next-generation transportation will likely open up attractive growth opportunities for this industry. Achieving net-zero carbon emissions for the aviation sector by 2050 is one of the International Air Transport Association’s (IATA) goals. Sustainable aviation fuels (SAF) and cutting-edge new propulsion technologies would be used to accomplish this.

All industry players are committed to mitigating their environmental impact by modifying their policies, goods, and activities by implementing practical steps with specific deadlines in response to zero-emission expectations. SAF output is anticipated to reach 91 billion liters by 2035, according to the IATA Study on Net-Zero Carbon Emissions by 2050. By 2040, there will be electric and/or hydrogen aircraft for the regional market, and SAF production will reach 229 billion liters. By 2030, short-haul hydrogen aircraft will be commercially viable. Given these patterns, the demand for sustainable fuel aircraft, such as UAM aircraft, will rise in the upcoming years due to increasing environmental concerns.

Regional Analysis

North American Supremacy Over the Market

By region, the global urban air mobility market includes North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America will command the highest market share, expanding at a CAGR of 16.88% over the forecast period. AAM (air-to-air missile) and UAM (urban air mobility) are being considered by the Federal Aviation Administration (FAA), which organizes its planning efforts around five different categories of activity: aircraft, airspace, operations, infrastructure, and community. The NASA and Federal Aviation Administration are working together on their Advanced Air Mobility National Campaign. According to the FAA, the initial UAM ecosystem would leverage existing infrastructure for helicopters, including routes, helipads, and Air Traffic Control (ATC) services, which were feasible given the aircraft's characteristics. The FAA published a draft interim guidance in March 2022 to facilitate the construction and operation of facilities (like Vertiport) that will be utilized by eVOTL aircraft for their initial functions.

Furthermore, in 2021, United Airlines invested in Archer, a UAM manufacturing company. Archer seeks to raise USD 1.1 billion via a SPAC partnership with Atlas Crest Investment Corporation. In addition to creating a piloted eVTOL UAM with a maximum speed range of 60 to 150 mph and a capacity for four people, the business also intends to develop and build a battery pack to power the aircraft. Many acquisitions or strategic alliances are now underway. Many more are likely to be finished before a fully-fledged UAM network, as UAM is predicted to alter various end-user sectors. Therefore, these factors are projected to promote the growth of the UAM market in North America.

Europe will likely advance at a CAGR of 16.85% and hold USD 1,724 million by 2030. Europe's mobility congestions result in a potential annual loss of EUR 100 billion in productivity. With the help of the European Innovation Partnership in Smart Cities and Communities' UAM Initiative, the European Union (EU) is promoting the creation of UAM demonstrators. The European Union intends to build multi-stakeholder city demonstration projects with an emphasis on creating a deployment strategy and roadmap to increase public support for the UAM concept and exchange creative ideas to improve the performance characteristics of eVTOLs. To adopt the UAM idea in the region, the European Union has implemented a multi-stage roadmap.

The UAM Initiative included 17 front-runner cities as of 2018 (creating 12 demonstrators, with two cross-border including several towns). The UAM program seeks to optimize multimodal interfaces and ultimately the effectiveness and efficiency of travel, lowering traffic congestion and CO2 emissions into the atmosphere. It does this by using native digital applications and real-time data and information. Additionally, nations in this region, including Germany, the United Kingdom, and France, are investing significantly in creating and acquiring cutting-edge UAM systems for commercial operations. The market for urban air mobility in Europe is expanding due to these nations' rising levels of automation and globalization.

Segmental Analysis

The global urban air mobility market is segregated based on vehicle type, application, and region.

By vehicle type, the global urban air mobility market includes Piloted and Autonomous.

The Autonomous section is projected to advance at a CAGR of 20.14% and hold the largest market share over the forecast period. Organizations like Wisk and EHang are creating autonomous aircraft. Fully autonomous flight is seen as a bold step by some industry experts. Still, a few businesses have defended their choice by pointing to the present levels of autonomy employed by commercial and military aircraft. Most manufacturers intend to obtain approval for pilot-operated aircraft before transitioning to completely autonomous vehicles by the decade's end. The certification process for autonomous vehicles is more complicated and will be a significant hurdle for manufacturers shortly.

The Piloted section will hold the second-largest market share. Flying cabs are rapidly becoming a reality as more than 250 businesses of all kinds and sizes enter the market to produce, construct, or run these aircraft taxis in the coming five years. These new vehicles will include multiple rotating or wings electric propulsion systems, vertical take-off and landing, seating for two to six people, and a range of 30 to 300 miles. The industry must hire and deploy hundreds of pilots until fully autonomous flying is a reality since the success of piloted flights directly affects the profitability of the UAM industry.

By application, the global urban air mobility market includes Passenger Transport and Freighter.

The Passenger Transport section is projected to advance at a CAGR of 20.98% and hold the largest market share over the forecast period. In civil transportation, passenger safety is a crucial factor to take into account. Makers of eVTOLs are developing systems that can maintain flight automatically and manually (using joystick-based control) (onboard flight computer). They are building systems with various seating capacities to meet the demand of specific customer segments. The air mobility system can function in a metropolitan area by building necessary infrastructure, such as vertiports for passenger boarding. It is believed that the newly proposed idea of an air taxi will completely alter the market. The market for UAM for passenger transport may experience an exponential increase as the "transportation-as-a-service" model propels the ride-sharing model by lowering operational expenses.

The Freighter section will hold the second-largest market share. A freighter, sometimes known as a cargo ship, is any person or vehicle that conveys supplies, goods, or cargo. It is anticipated that passenger eVTOL aircraft won't be authorized until cargo eVTOL aircraft, which are now being developed, are capable enough to carry people. It is advantageous for makers of cargo drones as the cost to certify an aircraft to move people is almost 2.5–3 times higher than the cost to certify an aircraft to carry cargo. This is currently driving the entry of several firms into the market.

Recent Developments

• 2022 - Airbus SE and VRM Switzerland are working to create a VR training tool for the twin-engine H145 helicopter. This ground-breaking new training tool will provide H145 pilots with a cost-effective, portable training option with realistic flight behavior, full-body immersion, and VR's 3D vision and high-resolution environment.