By Saleem Zaheer, XTI Aircraft
Let’s start by getting the acronyms out of the way! Great progress continues to be made in ushering in a new paradigm in aviation – the launch of Vertical Takeoff & Landing (VTOL) aircraft powered by all-electric, hybrid-electric or hydrogen propulsion (eVTOL). Some e-Conventional Takeoff & Landing (eCTOL) aircraft are also under development. All are grouped under the title Advanced Air Mobility (AAM) with Urban Air Mobility (UAM) covering short intra-city flights (generally less than 60 miles/100 km), with Regional Air Mobility (RAM) covering longer, inter-city flights.
Our focus in this post is on expected ticket prices in the passenger air taxi segment of AAM, which promises direct access to city centers and other population centers using vertiports/heliports, significant reductions (down to zero) in harmful emissions, lower noise, and significant time savings by avoiding surface traffic congestion which is projected to worsen with increasing urbanization in the future.
Cost per Available Seat Mile/Kilometer (CASM/CASK) is a common metric used by operators and airlines to accurately pinpoint their different cost heads. These include Ownership, Fixed and Variable operating costs, and additional airline/operator Indirect operating costs such as marketing and sales, management, ticketing, etc. Including the projected Load Factor (% of seats occupied) and adding a profit margin results in the ticket price.
Publicly available data shared by eVTOL OEMs in investor presentations from 2021 list their CASMs as $0.86 (Joby), $1.06 (Vertical Aerospace), and $3.30 (Archer). What specific costs are/are not included is difficult to discern, especially operator indirect operating costs, which could add up to an additional 20%. These three are 4-passenger eVTOL aircraft. An independent analysis of AAM demand for eVTOL air taxis by Goyal, Reiche, Fernando and Cohen (Sustainability, June 2021)1 shows a median CASM of $4.75 for a 4-pax eVTOL. Another study by MIT and Eve UAM, June 20212 forecasts a near-term average CASM of $5.99, reducing to $2.17 in the long term. UberX taxi fares in large cities in the US are variable based on demand, from ~$1.50 to ~$3.50/mile, and the MIT study cited above assumes $3/mile in Los Angeles. XTI Aircraft projects a CASM for our 8-pax configuration of the TriFan 600 of $0.80 fully burdened (CASM ranges between $0.66 and $0.80 to account for varying operator/airline costs and includes indirect operating costs). If we average the CASM of the three OEMs and two analyses mentioned above, we get a CASM of $3.19 for the eVTOL aircraft. Here are some illustrative one-way fares in the US assuming a 30% gross profit margin and 75% load factor.
Given the time savings and convenience promised by eVTOLs, several studies have forecast that a small segment of the population will switch to using them, a percentage expected to increase as eVTOL operations scale up and prices drop further. Having more passenger seats and traveling at higher speeds has a direct and significant impact on CASM, and hence ticket prices. This is clearly reflected in the numbers for XTI’s TriFan 600, which travels at twice the speed and with twice the number of passengers. As sector distance increases, the fare difference compared to eVTOLs widens significantly. It is these lower CASMs and resulting affordable fares which will be crucial to making Advanced Air Mobility available to a wider population resulting in mass market penetration.
- Advanced Air Mobility: Demand Analysis and Market Potential of the Airport Shuttle and Air Taxi Markets https://www.mdpi.com/2071-1050/13/13/7421
- Demand Potential for Urban Air Mobility: https://eveairmobility.com/eve-is-collaborating-with-mit-to-make-data-driven-decisions-to-build-the-urban-air-mobility-market/
- Straight line distance plus 20%
Disclaimer: The XTI TriFan 600 is currently under development. All performance and cost data are estimates based on current testing and analysis and subject to change and FAA certification.