Global Air Mobility: The Present State of The Future
17 July 2023 | 5 minute read
The first flight of the Wright brothers in 1903 sparked a revolution in air travel that, over century later, is on the brink of another ground-breaking metamorphosis. Yet today, aviation faces a battle not just against gravity, but also against emissions, as it is estimated to contribute around 2.5% of worldwide carbon dioxide produced annually. As such, the rhythm of technological innovation now syncs with the siren song of sustainability in our endless quest to conquer the modern skies. The wings of change beat rapidly, echoing the promise of a greener tomorrow that we all desire, but we are not there yet.
Urban and Regional Air Mobility
It may be decades before we see aircraft the size of a Boeing 787 flying powered by engines that emit no carbon dioxide, although some jet aircraft are already flying on sustainable fuels in place of Jet-A1 (still the most commonly used fuel in commercial aviation), which produce far less CO2. The areas where we expect a massive leap forward are urban air mobility and regional air mobility. The former focuses on air transport within the city environment (where vertical take-off and landing is a must) and the latter aims at servicing longer regional routes. Many of the aircraft being developed are battery or hydrogen powered and therefore emission free.
Established Manufacturers and VC-Backed Start-Ups
There are a number of manufacturers working in this area, ranging from the established aircraft manufacturers – such as Airbus, Embraer and Boeing – to venture capital-backed start-ups such as Joby Aviation. Many have already flown prototypes, but none have (as yet) been certified by the relevant aviation regulators (such as the FAA in the US, the CAA in the UK and the EASA in Europe). To state the obvious, unless certification occurs, this area will not take off (if you will forgive the pun). Interestingly, some manufacturers do not see it as a race to be first, as there may be much to learn from the issues faced by any trailblazer.
Estimated Time of Arrival
Many are saying that 2026 is the year when we will start to see these new flying machines coming into commercial service. This will bring a myriad of factors that will impact on the speed at which the regional and urban travel revolution occurs.
Scaling production, training and infrastructure
Firstly, the practical: how easily can the manufacturers upscale their production once they have received certification? How available are the materials required – are they competing with other battery users, for example? How quick and easy will it be to refuel/recharge the aircraft? How quickly can suitably qualified pilots be trained up? Where will these aircraft land (cities will need to have suitable heliports)?
Regulation standards, airspace control and intellectual property
Secondly, the myriad of legal issues: will the FAA, EASA and CAA adopt similar standards when certifying the new aircraft? Will there need to be more controlled airspace given the likely increased number of aircraft there will be in the skies? Who will own the data being generated when these aircraft come to be operated? And with so many manufacturers vying to make it, what if one alleges that another has used its intellectual property? The ongoing dispute in the USA between Wisk Aero and Archer Aviation has brought these issues sharply into focus. Wisk, formerly a partnership between Boeing and Kitty Hawk and, since May 2023, a wholly owned subsidiary of Boeing, sued Archer, backed by United Airlines, in 2021 for patent infringement and trade secrets theft after Archer hired a number of former Wisk engineers. Both companies are developing electric aircraft and the trial is scheduled to commence in August if mediation fails. Whatever the outcome, the case is a cautionary tale and a reminder that IP ownership and protection is the cornerstone of such a quickly developing industry. This must be given careful attention in any applicable commercial or corporate transaction especially during the due diligence stage. Particular scrutiny should always be reserved for relevant IP representation and warranty clauses in licence and assignment agreements to ensure there are adequate contractual remedies available in the event of a dispute.
Funding the acquisition of new aircraft
Thirdly, the financial – how will operators fund the acquisition of these new aircraft? Airlines traditionally look to financiers and lessors, where there is an established market, with commercial aircraft having a known working life and calculable depreciation – but how do you calculate the residual value when there is no comparison? From a legal perspective, it is highly likely that these aircraft will be registered at aircraft registries, with lessors and financiers being able to register mortgages and other international interests against them with the International Registry, giving them protection in the event of the operator’s default or insolvency. The lessors and financiers will not be so worried about the legal factors but more the economics. With these aircraft’s future values unknown, it may be that financiers and lessors take closer interest in the operator’s credit history and balance sheet rather than the estimated value of the assets themselves when deciding whether to lend/lease.
Public perception and safety
Finally, the psychological – how can the public be convinced that these new flying machines are safe? These aircraft are much smaller than modern commercial aircraft – perhaps seating five to ten – so if they are to be economically viable, a substantial number of customers will need to be flying. And that increases the risk of accidents – particularly if the aircraft have to stick to congested low level airspace. Some high-profile accidents could set this part of the industry back a long way. And for those manufacturers designing pilotless aircraft (aiming at the air taxi market), given existing concerns about driverless cars, are pilotless commercial aircraft a step too far (for now, at least)? The public may need convincing.
Conclusion: A Collective Effort
From the humble beginnings of the Wright Flyer to the carbon-neutral potential air travel of tomorrow, the history of aviation unfolds with relentless ingenuity. We stand on the brink of this paradigm shift in aviation as innovation and investment plays out under the watchful eyes of the world. The stage is set, and the cast – regulators, manufacturers, operators, and investors – are pivotal to the successful transformation of green dreams into green reality.
This article was first published in Chambers and Partners here.