A milestone year for future air mobility

The future air mobility (FAM) industry had a record year in 2021. Building on recent trends, such as technological advances, increased focus on environmental sustainability, and growing vehicle traffic congestion, this was the year that put FAM on the map. Now, the industry will mature and evolve—and as it does, new opportunities, as well as significant challenges, are likely to emerge.

2021 was a record year for future air mobility.

The industry attracted $7 billion in new investment—more than doubling the total disclosed investments made over the previous decade. Overall, disclosed investment in FAM since 2010 has reached $12.8 billion, of which about 75 percent was targeted to manned advanced air mobility (AAM) players. Five FAM companies went public in 2021—Blade Air Mobility, Joby Aviation, Lilium, Archer Aviation, and Vertical Aerospace—all through mergers with special purpose acquisition companies (SPACs), with a combined market cap of $10.7 billion.1 Another company, EVE Air Mobility, recently announced its intention to go through a SPAC merger in 2022. Having these companies publicly traded will increase the attention and transparency—along with the scrutiny—of this industry.

The industry received orders, both firm and options, and letters of intent in 2021 for approximately 6,850 aircraft worth $26.1 billion—outpacing the order volume for conventional aircraft orders that year by a factor of ten. Of that total, 80 percent were for manned AAM aircraft. Many of these orders are conditional and non-binding, but the spike in order volume is a clear signal of demand, showing real engagement from a range of players, including important incumbents.

Further, 2021 was the year in which incumbent aviation players—including OEMs, suppliers, and operators—took public steps, bringing their experience (and checkbooks) to the industry to help scale and develop. By the end of 2021, five of the ten largest aerospace OEMs had publicly launched AAM programs or made investments in other players. Among major suppliers, the share was even higher, with seven of the ten largest aerospace suppliers publicly active in the space. And even among the ten largest airlines, four have publicly entered the AAM space.

Last, in terms of public perception, 2021 was the year the public heard about this new industry, and McKinsey’s survey data shows the overall level of interest. In a survey of approximately 4,800 consumers in key markets around the world, approximately one-fourth of respondents said they would definitely switch to AAM aircraft for applications such as commuting, errands, business, leisure travel, or trips to the airport. Another analysis conducted showed similar interest levels.

What’s coming in 2022? We believe the following trends are worth keeping an eye on:

  • New funding for unmanned AAM and sustainable aviation. While funding in 2021 was focused primarily on manned AAM, 2022 could see a shift of focus toward these two areas. Both have lots of potential—and in some cases an easier path to market, with fewer technology, regulatory, public acceptance, and consumer adoption challenges than manned AAM.
  • Greater attention to consolidation. Over 300 manned AAM players were operating as of the end of 2021, but we will likely see the beginning of consolidation of ideas and people—and, in turn, companies. This consolidation will take two shapes—combinations of competitors and further vertical integration.
  • Establishment of an aerospace-grade supply chain. As players move toward locking in designs and prepare for manufacturing, a reliable supply chain is needed. Existing aerospace suppliers will need to devote some attention to these new markets, and new suppliers will need to develop the capabilities to meet the unique requirements for aerospace manufacturing, including relatively low volumes, quality assurance and tracking, and certification.
  • Emerging focus on operations. As it moves closer to commercial service, the industry will have to expand its focus beyond the development and manufacturing of aircraft to the domains of customer experience and flight operations, in areas such as pilot training, ground infrastructure, and maintenance, among others.
  • Delays and plan adjustments. After the rush of initial activity, some companies will likely run into issues, leading to the first announcements of development delays and business plan adjustments.

In sum, 2021 has been an incredible year for FAM, and as the industry evolves in 2022, it will likely experience some exciting twists as more opportunities and challenges emerge. Stay tuned.

Axel Esqué is a partner in McKinsey’s Paris office and Robin Riedel is a partner in the San Francisco office.

1 As of December 31, 2021.

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