eVTOLs Face Significant Challenges In Passenger Applications

Electric vertical take off and landing vehicles, known as eVTOLs, are a rage among many thinking about new sustainable ways to travel. Special Purpose Acquisition Companies, or SPACs, have been a popular funding vehicle for eVTOL companies even though revenue streams may be many years away. The idea of Jetsons-like machines whisking us from center city to nearby airports and other destinations is a fanciful dream, and technology is trying to quickly make this a reality.

The current version of VTOL, helicopters, have made no meaningful inroads to the mass traveling public. Companies like Blade move people around New York City but the services are not cheap and have reached only a tiny fraction of travelers. While eVTOLs could have better economics and ultimately do these trips much better than modern helicopters, there are five good reasons that eVTOLs will be highly challenged in regular commercial operations:

Technology Issues

There are many articles outlining the technical challenges of eVTOLs. These include battery operation and life, assurance of safe operations, and using pilots versus automated flight. This is not a technical story, but rather an economic one. This industry is moving quickly, but still is many years away from passenger operations since the ability to fly safely, with enough power, is not yet confirmed. Electric power is more sustainable than fossil fuel powered airships, but it has its own challenges. One of these is that the weight of the ship does not reduce during flight, meaning that the eVTOL must be able to land as heavy as when it takes off. There will be no dumping of fuel in emergency landing situations.

The pilot issue is a massive one. If using pilots, there are questions about where they will come from, how they will be trained, and how this career could be compared to, or relate to, flying commercial aircraft. The abstraction seen in many eVTOL papers and marketing materials talk about a “move to automated flight.” There is a difference between automation and autonomy, and truly replacing a pilot in operations around millions of people is decades away. You could argue that replacing pilots is easier in large aircraft, who aren’t regularly operating in and around tall buildings and densely populated areas, even before eVTOLs could make this a reality.

These few paragraphs are but a short summary of the many technological challenges with eVTOLs, and is far from complete. The point is that this industry is far from ready for prime time, and working quickly is good, but no one should expect significant operations anytime soon.

Constrained Airspace

The most exciting passenger opportunity for eVTOLs is moving people quickly in large, populated areas like New York City and Southern California. The problem is that these areas are also the most congested today with commercial aircraft and business aircraft. eVTOLs will also compete with drones for this limited airspace, and again the drones will be most valuable in the biggest places.

The current air traffic control system cannot handle a robust operations of eVTOLs. These will mostly operate at relatively low altitudes, so the issue is not avoiding large aircraft that may be operating at the nearby airport. The issue is operating around dense buildings, with other eVTOLs and drones in the same space, and doing this safely in busy metropolitan areas.

Doing this without pilots in an autonomous system is yet another huge hurdle. This advancement is also not “just beyond” the introduction of this kind of equipment. It probably will take at least another decade or more once the equipment is proven with human pilots. Like I said above, it’s likely that the airspace challenge of autonomous operations is tougher for the eVTOLs than commercial aircraft.

Limited Applications Until Pricing Is Low

Until consumer pricing is about $75 per trip, it isn’t likely that eVTOLs will become a meaningful operation in the biggest cities of the U.S. Until then, flights will happen, with a pilot for many more years, but the penetration into mass operations is not likely. The economics of this new equipment suggests that fares will need to be significantly higher to cover the costs of the equipment and operate in the crowded airspace.

In some ways, this is like commercial flights at the emergence of jet aircraft. In the 1950s and 1960s, the jets were inefficient and not as safe. Consumer prices were high, and this resulted in relevance only for a small fraction of the population. It wasn’t until the equipment became more efficient, and the industry developed science like yield management, and fares dropped significantly, that the industry started carrying signifiant volumes. The eVTOLs are better technology than early jet aircraft, and main aspects of flying efficiency are already well understood. So, the eVTOLs would start with better odds, but operating efficiently enough to be profitable with fares under $100 will take quite a while. This will be a challenge because of limited occupancy of many of the units as well.

Utilization Difficulties

Expensive capital in any business needs to be run regularly to justify the cost of the equipment. Airlines operate their planes from eight to 14 hours per day, and this utilization makes commercial flying financially sustainable. One reason that wide-body aircraft, like the Airbus A330 or Boeing 787, are not as common as smaller, single aisle planes, like the Boeing 737 and Airbus A320, is because the seasonality of travelers makes it harder to fly the wide-body all year profitably.

eVTOLs promise efficient movement in busy places, when the roads are jammed and time is at a premium. This is not a 24/7, 365 day challenge for consumers. Even in New York, there are times that driving to LaGuardia or Kennedy airports is not a problem. Airlines can fly to Las Vegas and other places late at night and leave there early in the morning to add utilization to their fleet. It’s not obvious that eVTOLs will be a relevant option except for the busiest times in the busiest places given what it will cost to fly on this equipment. This suggests that utilization will be limited, again putting pressure on the fares needed.

Industrial And Military Uses Will Make Sense Sooner

I am excited about this new technology and believe that viable operations are possible. But the industry will cut its teeth in industrial operations. That’s because carrying cargo, or mail, or small packages, or machine parts, means that issues of automation can be worked out and a baseline of safe operations can be established. Pricing matters in industrial cases of course, as businesses won’t pay more to carry material than their next best option.

Delivering equipment in military operations means that automated flight may be preferred given the human risk. Timing of flights likely would not conflict as much with other airspace uses, and utilization can be improved. Also, industrial and military uses won’t be especially helpful in only the biggest metro areas, meaning that some issues will be easier to work out. This makes sense, and this eVTOL equipment will compete with smaller drones for some operations.

It’s exciting to think about avoiding traffic and zipping across town in an efficient, safe, and low-priced eVTOL. But robust commercial passenger operations are still many years away, given technological and practical issues in place. It’s great that companies are pushing this technology, and that investors are willing to take the long view to make it happen. Working out the issues before having many passengers makes sense, and finding the right level of utilization to make the fare relevant for mass populations will be necessary.