Air Rights Help Cars To Fly
Underutilized Assets Put To Work
Flying cars, a potential $1.5 trillion opportunity by 2040 (Morgan Stanley) need the permission of air rights owners who control the $613 trillion real estate industry (Galaxy Research).
Who Is The Bookies Favorite?
Despite recent market fluctuations, Joby Aviation is on track for a commercial launch by 2025. The company's strategic partnership with Japan, advancements in air taxi operations, and early delivery of electric air taxis to the U.S. Air Force demonstrate its commitment to developing its technology and business.
Archer Aviation, currently being knocked by market shifts, has ambitious plans to launch air taxi services in Abu Dhabi and Dubai by 2026. The recent memorandum of understanding (MOU) with Air Chateau International for 100 Midnight aircraft adds to the company's chances of commercial success, supported by Barclays analysts raising their price.
Lilium has seen recent market fluctuations and has had a rough ride, layoffs and less-than-impressive share prices indicate where confidence is, but it remains a contender. Signing a memorandum of understanding (MOU) with Lufthansa Group, the legacy airline for eVTOL operations in Europe and collaborating with CITIC Offshore Helicopter for eVTOL operations in China they hope to position Lilium for success.
There are many more flying car, aka eVTOL, companies but these three are battling for position and cash. What is clear is there is no outright winner yet, perhaps there never will be one winner.
In the short run, the market is a voting machine but in the long run, it is a weighing machine - Benjamin Graham
A collective of legacy airline operators and car companies as key investors, vendors and customers trying to become innovative seems like a hard call to make. In any event, what is clear is they need air space for their operations or they cannot take off, and that is where the real innovation happens.
NASA Air Taxi Research
NASA is showcasing breakthroughs in its technology by using autonomous drones for Air Taxi research. Recently, researchers at the Langley Research Center successfully flew multiple drones beyond the visual line of sight (BVLOS), autonomously navigating obstacles and each other during takeoff, following planned routes, and landing without human intervention. Special approval from the U.S. Federal Aviation Administration (FAA) was obtained for BVLOS missions, marking a crucial step in advancing self-flying capabilities for air taxis.
The technology includes Integrated Configurable Architecture for Reliable Operations of Unmanned Systems (ICAROUS). The ominously named ICAROUS provides an autonomous detect-and-avoid function, and NASA’s Safe2Ditch system enables autonomous decisions for emergency landings.
NASA emphasizes the safety and cost-effectiveness of testing self-flying technology on smaller drones before deploying it for larger passenger-carrying air taxis. The aim is to mature autonomy well in advance of integrating self-flying air taxis into busy skies, skies controlled by a decentralized network of air rights-holders.
Electric Aircraft Innovation
Lyte Aviation, a UK-based firm, is envisioning a transformative future for electric aircraft with its LA-44 SkyBus. This vertical takeoff and landing aircraft, set to debut its prototype in 2025, boasts an impressive capacity of 40 passengers and a substantial payload of nearly 5 tons. It has a projected range of 625 miles and a maximum speed of 185 mph, the SkyBus aims to be five times more efficient than existing helicopters and emitting ten times less carbon.
Unlike its smaller battery-only counterparts, the SkyBus adopts hybrid propulsion, utilizing electric power from hydrogen fuel cells and four turbine engines running on jet fuel. Lyte emphasizes the practicality of conventional engines, stating they are the best current option for operational flexibility and refuelling within existing infrastructure.
While larger than conventional air taxis, the SkyBus shares the goal of redefining transportation hubs, targeting buses, trains, and regional aircraft. Lyte has partnered with the Netherlands’ Twente Airport to develop regional routes connecting cities like Paris, Munich, and London.
In anticipation of the certification in the next five years, they have collaborated with Volatus Infrastructure and Energy Solution to address charging, refuelling, and vertiport system requirements. The partnership aims to support diverse flying car designs, partly recognizing the evolving landscape of Advanced Air Mobility (AAM). The company anticipates that the growing supply of sustainable aviation fuel and green hydrogen will align with the aircraft's long-term vision of transitioning to fully hydrogen-electric propulsion within a decade.
The flying car market is poised to reach ~$4 billion by 2035 according to Allied Market Research, and a potential $1.5 trillion opportunity by 2040 as projected by Morgan Stanley. The interesting point of this is that very few of the flying car companies will make the returns people are looking for, by all accounts. Investing in a single manufacturer of trains is unlikely to make you an outsized return in comparison to owning the tracks they have to transit on.
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