In June 2019, the Boeing Company and Kitty Hawk Corporation entered into a strategic partnership to work on futuristic urban air mobility.
MarketsandMarkets™ View Point:
Rachana Gandhi, a Senior Research Analyst in the Aerospace and Defense sector at MarketsandMarkets™, shares her views:
Boeing has partnered with Kitty Hawk to further develop Cora, a two-seater semi-autonomous air taxi, which is as good as a flying car. Boeing NeXt, a unit of the Boeing Company working on futuristic UAM, is expected to work in partnership with Kitty Hawk, a company backed by Google co-founder Larry Page. This strategic partnership is expected to benefit both companies, whereby Kitty Hawk’s technology will be commercialized with the help of Boeing’s capital and experience. Cora is a result of 8+ years of research & development and is expected to benefit Boeing’s UAM portfolio. Kitty Hawk was one of the first few to start the development of autonomous electric-powered aircraft to enable ease in flying, reduction in carbon footprint, and easy accessibility to vertiports.
Cora is to be flown with full electric propulsion and vertical take-off and landing capabilities, without the presence of an onboard pilot. This aircraft is being developed to fly with autopilot systems which will be monitored and controlled by a remote pilot based at the control station. Commercialization of the semi-autonomous or remotely piloted technology will be a step towards the development of completely autonomous aircraft. In October 2017, Kitty Hawk partnered with Air New Zealand and carried out their first successful flight in the country.
IMPACT ON URBAN AIR MOBILITY MARKET
As per projections by MarketsandMarkets™, the urban air mobility market is projected to reach USD 15 billion by 2030 at a CAGR of 11% between 2018 and 2030, while the air taxi market in urban air mobility is projected to reach USD 11 billion by 2030, at a CAGR of 11% between 2018 and 2030.
FIGURE 1 AIR TAXI PLATFORM PROJECTED TO LEAD THE URBAN AIR MOBILITY MARKET DURING THE FORECAST PERIOD
Source: MarketsandMarkets™ Analysis
The future urban air mobility market is currently driven by investments and new product launches. Industry majors, such as Boeing (US), Airbus (Netherlands), and Embraer (Brazil) are working on the development of futuristic Urban Air Mobility (UAM) vehicles equipped with hybrid/electric propulsion and autonomous capabilities. Along with these companies, more than 100 startups are working on the development of UAM vehicles, of which, various companies, including Ehang (China), Joby Aviation (US), Lilium (Germany), Volocopter (Germany), and Kitty Hawk (US), among others, have received investments from venture capitalists.
The current partnership between Uber and UAM players—including Embraer (Brazil), Aurora Flight Sciences (US) a Boeing subsidiary, Bell (US) a Textron subsidiary, Karem (US), and Pipistrel (Slovenia)—is pushing other players to enter the market as early as 2021. Zunum Aero received an order from Jetsuite for 100 hybrid propelled, VTOL aircraft with a carrying capacity of 12 passengers, while other players such as Lilium, Volocopter, and Joby Aviation, are speeding-up their schedules and making efforts to gain orders.
Urban air mobility transport is being planned for intracity as well as intercity travel. However, these technologies will be released in phases, and with substantial proof of the concept, advancements in the technology will progress further. It is expected that commercialization of UAM vehicles having optionally piloted or remotely controlled technology will take place during the first half of the 2020s. The success of the concept in the market is expected to enable the development of autonomous aircraft through the implementation of AI and deep machine learning technologies. Autonomous air taxies are expected to significantly enter the market towards the end of the 2020s.
Growth of the UAM market is subject to technological advancements, regulatory framework, infrastructure availability, and public acceptance. Addressing challenges in collaborations, such as technological advancements and infrastructure, are expected to lead to the early commercialization of electric, autonomous air taxis.
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IMPACT ON TOP COMPETITORS
Top competitors in the UAM ecosystem, such as Airbus, Lilium, Volocopter, Embraer, Joby Aviation, and others, have aircraft in the developmental and approval phase. The strategic partnership between Boeing and Kitty Hawk can be a major threat to these companies. Airbus is one of the largest competitors of Boeing and was the first among the 2 to successfully test its passenger air vehicle, the A³ Vahana. While Airbus aims to gain a larger share of the market, the first entrant to the market could gain a substantial share initially. Hence, other players are focusing on commercializing UAM aircraft to gain this advantage, leading to healthy competition in the industry.
FIGURE 2 COMPANIES ADOPTED NEW PRODUCT LAUNCHES & DEVELOPMENTS AS KEY GROWTH STRATEGY FROM 2014 TO FEBRUARY 2019
Source: Annual Reports, Press Releases
The UAM market is currently driven by investments and new product launches with major UAM products either in the development or certification phases. Technological advancement is the base for the growth of this market; however, without approvals and certifications, progress in the market is not possible. Ensuring on-board passenger safety is very important and is required for approvals. It is also a challenge for startups to acquire certifications as they do not have proven records. Hence, collaboration with major players, such as the Boeing and Kitty Hawk partnership, can provide an edge in commercializing a product faster.
Technological limitations, such as battery capacity, along with regulatory restrictions and public concerns around safety and privacy, are expected to have a significant impact on the autonomous air taxi market. Traditional air taxi companies, new entrants, as well as large airliners are trying to gain a substantial share of the UAM market, as the potential is lucrative. The strategic partnership of Boeing and Kitty Hawk will force other players to work on improving their capability and strengthening their product portfolio and business strategy to stay ahead of the competition. This can be done through expansions or collaborations. Though expansions might take a long lead time, collaborations can be a quick option to secure a better position in the UAM market.
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