#In-Depth: Air Taxis: A potential market in the waiting for India
By Anish Michael
Science fiction has teased the idea of flying cars for decades with no real headway. However recent advancement in innovation and technology hints at the fantasy of “The Jetsons” coming to reality, with small aircrafts buzzing around neighbourhoods which could very well be the future of mobility.
Imagine zipping across from Connaught Place to Gurugram or Bengaluru International Airport to Koramangala, in under 10 minutes, saving at least 2 hours on travel — a priority on any commuters’ wishlist!
The prevailing congestion problems and the anticipated growth of traffic in the coming decade fuel the need to envision path-breaking solutions. The advances in vertical take-off and landing technology have opened new possibilities for mobility, arguing for the emergence of intra-city air-taxis.
Indian cities rank amongst the worst congested cities in the world, reflecting the unfettered growth of motorised transport in the country. This corresponds to Indians on an average losing 90 minutes every day on their daily commute. The associated economic loss is estimated to be around Rs 1.5 lakh crore per year, validating the age-old phrase- “time is money”. Accounting for the environmental costs, the consequences are even dire. As studies globally have repeatedly shown that more roads merely cause more traffic, India must look to the skies to find its next-gen mobility solutions. On-demand air-taxis, by potentially giving people back their lost time in daily commute, can radically change the urban mobility landscape making it safer, faster, cleaner, and more efficient.
Globally, the air-taxi industry is at a nascent stage. However, it is a market set to mature in the coming decade. According to a Morgan Stanley Research the air-taxi industry is projected to be worth $1.5 trillion by 2040. This has prompted the booming start-up and innovation culture in India to venture into the air-taxi arena. Start-ups like VTOL Aviation India and ePlane company in collaboration with IITs are developing prototypes to be functional by 2025, indicating India’s long-term mobility vision to tap into this future trillion-dollar sector.
The development of infrastructure to support air-taxi networks also has significant long-term cost advantages over infrastructure projects such as roads and flyovers. The average construction cost of roads per km is Rs 7–10 crores, and that of flyovers varies between Rs 70 and Rs 500 crores. The estimated cost of constructing an air-taxi hub is Rs 8–120 crores for small ground-based ports to large elevated hubs.
Compared to road infrastructure, air-taxi hubs are required only at strategic locations lowering the overall cost of development. Additionally, using existing building rooftops provides alternatives to greenfield ports. Air-taxis can save costs by potentially eliminating a fraction of new roads and fly-overs from crowding space-starved cities and preventing congestion thereby minimising productivity loss.
Aviation firms around the world are investing in electric vertical take-off and landing(eVTOL) technologies much similar to e-mobility and aerospace engineering. Apart from infusing the much-needed momentum to make air-taxis a possibility, it creates business opportunities for the auxiliary sectors of infrastructure, software and hardware. Air-taxis at scale could, in turn, give a much needed thrust to India’s e-mobility value-chain. The air-taxi ecosystem includes the manufacture of sensors, batteries, software systems to operate the vehicles, and network security, similar to e-mobility systems, providing a boost to the mobility economy.
The market potential of the air-taxi industry has got several companies across the globe developing different prototypes and each adopting different strategies for growth and expansion. The innovative business models open up an array of new services such as critical aid delivery, tourism and air-surveillance, among others. Zipline, a US-based drone delivery firm, is partnering with The International Red Cross to provide blood delivery services in the Philippines. They have also partnered with the Government of Maharashtra to deliver medical supplies. Such application of technology and partnership helps fight severe health crises like the current pandemic.
Singapore, Dubai and Seoul are among the cities leading the fray in commercialising air-taxis with a welcoming regulatory regime and superior research and technology. These cities aim to launch their services in 2022-‘25. The governments are partnering with the private sector to chalk out testing programmes, identifying air routes and take-off and landing sites, and safety, security and legislative aspects. South Korea is in the process of developing its K-drone System, a three-stage airborne traffic management system to segregate aircraft, air-taxis and drones, with a state funding of $22 million. Prototypes and trial runs have already begun with Singapore even putting tickets out for sale priced at $364.
These cities are assuming the role of early adopters of air-taxi technology. It helps position themselves to dominate the market in the future. Boeing is a case in point that forayed into commercial aviation in 1916 and enjoyed a monopoly for over half a century. Likewise, Singapore demonstrated its high capacity of internalising and adopting new technology, which catapulted them to global leaders in the tech world.
As India enters an industry it has otherwise been reluctant to, it is the right time to don the role of innovators and early adopters to compete as leaders in urban air mobility. While the future of air-taxis in India, at scale, is a few years away, they have the potential to serve other areas of application of medical assistance, logistics, emergency services or even tourism. These medium-term use cases of air-taxis is a market that India must develop which in turn could be a testing ground to refine and develop the product as well as policies.
Even as countries take lead in developing aerial innovations, as with any new technology or system, there are challenges.
- The infrastructural challenge: Identifying feasible locations for ground infrastructure, creating a robust communication system and integrating multi-modal mobility operating systems for seamless transit need careful planning.
- Cost and affordability are two vitals for commercialising air-taxis at scale. The challenge is really of overcoming the initial high operational cost projected to be 10–12 times the cost of cabs. The cost of development and return on investment has also aggravated apprehensions.
- Public acceptance: As with any new technology, safety is paramount. Developing fail-safe features are imperative to instil confidence in potential customers and their overall acceptance.
- Technological constraints: Beyond the technology of the air-taxi itself, the advanced detection and collision avoidance systems, battery capacity, fast charging technology etc. require careful deliberation.
- Air traffic management is a heavily regulated sphere. Policies and regulations need to be ironed out, modernised, and tested before air-taxis can be safely opened to the public.
As technologies mature they require the collaborative effort of governments and enterprises to create appropriate regulatory frameworks. The more tech-savvy countries are taking the leap to create an ecosystem of safe air-taxis addressing the infrastructure, standards and policy challenges.
For India to take advantage of this trillion-dollar industry, it must be an early adopter than a laggard. Changing perceptions and redefining what’s possible in Indian mobility requires will and consistency by the policymakers along with the private sector players with sizeable risk capacity to build a compelling and desirable air-taxi experience. A consistent and coordinated effort can place India amidst global players in the urban aerial economy, eyeing a pie in the sky.
In-Depth is a fortnightly blog series by OMI on the latest mobility-related developments. Follow us on Twitter and Medium for regular updates.
