The Revolution.Aero London report

Deep Dive

June is statistically the sunniest month in the UK and last week it did not let us down for Revolution.Aero London 2024. But in many respects the mood inside was a little less sunny that it has been in previous years. A cold funding climate, the AAM winter and the industry’s position in the hype cycle were all hot topics.

That said, in aviation circles there is often talk of green shoots and it is hard to get greener than zero-emissions flight.

eVTOL aircraft remain the biggest draw for investment, but interest would appear to be moving increasingly to other areas too. Regional electric conventional aircraft, short take-off capability and hybrid propulsion were all in focus. As was the growing commitment of tier one suppliers both in aviation and automotive, the legal challenges associated with scaling AAM and the segregation or integration of the airspace.

“I think right now we are in the reality part of the hype cycle,” said Sergio Cecutta, founder, SMG Consulting speaking on the panel Where are we in the hype cycle? “It is a double-edge sword. One piece is the fact these aircraft are hard to develop, especially to certify. The other is that it takes a lot of money. Not $1bn, but $1.5bn to $2bn.”

The sustainable aviation industry needs to work together to ensure it is not excluded from the transport ecosystem, Yesh Premkumar, senior lead, Global Partnership and Business Development at Supernal told delegates.

“When thinking about sustainability, what is in the air must mirror what is on the ground. So sustainable aviation becomes part of sustainable mobility and infrastructure. We have to make a conscious effort to integrate aviation into the general mobility infrastructure. That is the reason why we were created as part of Hyundai,” he said.

Premkumar also pointed out that the top four automotive OEMs globally – VW, Stellantis, Toyota and Hyundai – all have investments in sustainable aviation, more specifically AAM. “Which is fascinating,” he said, and potentially points toward increasing integration.

Stellantis’ AAM play is with Archer. The eVTOL aircraft developer’s chief commercial officer Nikhil Goel touched down to discuss recent progress and international strategy

“I think the vast majority of the UAM market is going to be outside the United States,” said Goel. “That’s where all of the population growth is happening. In cities where there is not enough space to build roads. I’ve been in this industry for a decade and this is what I’m really excited about. How do you make those cities smarter, better, more efficient places to live?”

The eVTOL aircraft developer has announced plans to launch services in the UAE, Korea and India. In the latter it is working with Indigo, India’s largest and the world’s third largest airline, to bring air taxi services to Delhi, Mumbai and Bangalore.

Consolidation has been coming up more and more. It was Revolution.Aero’s prediction back in January that the industry would see some this year.

According to Brian Flynn, founding partner at DiamondStream Partners, he is seeing two types of deals this year. “One is where the company is performing well according to their targets and those companies are finding the funding that creates attractive valuations,” he said. “The other type of deal is restructurings and those are more fraught with peril at any valuation”

Joshua Ng, director at Alton Aviation Consultancy provided a granular look at the investment in AAM. “I think we can all agree that now is time that is characterised by a lot of investments. But where has all of it gone? There has been $12bn invested in this sector and 85% of it has gone to OEMs. This number also excludes the Airbus’, Leonardo’s and Textron’s that are all investing their own money.”

“But there is still a lot of money that needs to be raised to bring a lot of these vehicles to market,” he added.

Bristow’s Dave Stepanek, fresh off the publication of his white paper A Philosophical Guide to AAM, was keen to stress his optimism for the opportunity that AAM presents, but that it will take time to see fully realise that potential.

“So if you got on an airplane to get here today you were benefiting from 120 years of operations and evolution of safety,” Stepanek told delegates. “And even today with modern advanced aircraft in Part 121 world, we are still seeing evolutionary problems. That is what we need to focus on. How do we take this revolutionary technology and apply evolutionary learnings?”

It is Bristow’s belief, along with many others, that cargo will come first. The sector offers multiple opportunities for different aircraft. Last mile, middle market and regional turboprop replacement. Speaking on the panel Ready, set, (car)go!, Tom Plümmer, CEO of German drone delivery startup Wingcopter, is covering the last mile.

The firm went back to the drawing board after realising a single point of failure in the system was not scalable. Now having tested in Germany, USA, Japan and Spain, Wingcopter is readying to bring its new aircraft online.

The company has now raised over $100m but getting there was not easy. “Either you make revenue and you get an investment. Or you don’t. So we had to bootstrap for four years, we sold the system, employed people, made a few million in revenue. Then we got investment,” said Plummer.

Growing a new sector inevitably throws up unprecedented hurdles. One such issue is in the use of AI systems in aviation and the legal challenges around data use, according to Ben Woodfield, senior associate at Bird&Bird.

“Whether you’re a customer, supplier or investor the takeaway message is that we are not just talking about rights in IP here. We are talking about rights in data, and you need to think through the data part, just as much as you think through the IP part,” concluded Woodfield.

As the saying goes you can have data with no information, but you can’t have information with no data. The more data collected and shared as an industry, the more it can be applied to produce results.

It was data that enabled the introduction about the sunshine in London. See you again this December in San Francisco where weather data will tell you it might be a little damp.

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