Taking Flight: Four Key Takeaways from TexasUp
The exclusive, invite-only event, known as TexasUP, brought together an elite cohort of carefully selected members who’ve been tasked with leading the charge in future flight and making a multidimensional existence possible for all mankind.
The world’s top innovators and investors quietly convened at a 2,500-acre Texas ranch near Forth Worth in November for the third annual UP leadership summit. The exclusive, invite-only event, known as TexasUP, brought together an elite cohort of carefully selected members who’ve been tasked with leading the charge in future flight and making a multidimensional existence possible for all mankind. The event was co-hosted by Ross Perot Jr and aviation entrepreneurs and investors, Cyrus Sigari and Ben Marcus. Held on November 19-21, the summit attracted more than 160 leaders from established aerospace and automotive manufacturers, fast-growth start-ups, new and established operators, and world class investors and government leaders, including President George W Bush, for three days of information sharing and ideation. Chatham House rules governed, so speakers and organizations are mentioned here without attribution. Four key themes quickly rose to the top of all discussions:
FIRST TO MARKET:
UAM could be the single largest new industry to emerge in this generation, boasting a projected $1.5 trillion market by 2040, according to an in-depth analysis from Morgan Stanley Research. However, partnerships will be key to getting UAM to scale, including partnerships with governments, even as UAM and the concept of eVTOL continue to see an exponential rise in public awareness. Despite the recent surge in awareness, the market remains segmented and no clear standard has emerged – although this will most certainly change, and it may not be the first to fly who emerges as the standard. Prior to a world with vertical daily commutes, experts agree the logistics market will emerge first, with cargo/data delivery uses in drones far preceding passenger uses like air taxis. In fact, it’s estimated the world’s drone use for industrial purposes will reach $40 billion by 2023 – perhaps a conservative estimate, considering drones are already being used to solve inspection and intelligence-gathering issues, survey dangerous regions and deliver small items, among many other uses.
Several key barriers stand in the way of UAM’s mass adoption, including noise abatement, which stands as the single largest issue with rotorcraft today – lifting a three-ton aircraft is one thing, but doing it with minimal noise is a task that still has many engineers losing sleep. There’s also the issue of battery disposal as the world continues to switch from gas-powered engines to more sustainable battery-powered aircraft. While auto batteries have continued to improve at a rate of 7 percent each year, the world waits eagerly for a next-generation battery that can provide enough power for quiet, sustained flight that makes sense financially, logistically and environmentally. Other barriers to widespread adoption of UAM include regulatory issues, capital formation and the ability to tell the story in a way that compels the public to jump on board. Finally, there’s the issue of pilots, who will need to evolve from their operational role in aircraft and be built into the broader aviation loop. None of these barriers is insurmountable, but each requires serious innovation and collaboration among the global UAM community.
Just 12 known companies were developing and testing VTOL (either hybrid or electric) aircraft to carry passengers, data and goods in 2017. Now there are at least 225 companies, with many already flying and demonstrating capabilities, that could potentially join a hybrid-electric aviation travel industry that’s expected to reach $178 billion by 2028, according to UBS Investor Relations. Still, investors continue to sit on the sideline, waiting for regulatory leadership to address the barriers that currently stand in the way. The general investor sentiment on air taxis is that “the ones that take the lead in the beginning don’t tend to win.” Investors feel that until the barriers are addressed, the traditional investors won’t come. Meanwhile, major auto OEMs are going vertical and have publicly proclaimed their support and investment in UAM. Hyundai Motor Group (who just hired Dr. Jaiwon Shin, former associate administrator of NASA’s Aeronautics Research Mission, to lead UAM globally), Honda, Porsche, Tesla, Toyota, Mercedes and Geely are all investing in air mobility research. Given their collective global advertising and marketing spend, auto OEMs could be a key partner to lead the public perception campaign.
Ground operations were discussed briefly at the summit, with several vertiport mentions, including comments from a Texas developer that’s pioneering a mobility innovation zone with three main focus areas: trucking technology, drone technology and parcel shipments. Combining truck and drone technology will allow the company to capture its share of an anticipated $100 billion in parcel shipments in 2020. The developer plans to partner with a regional airport to bring together airspace and autonomous vehicles and build partnerships in various industries to simulate any use-case in moving people and goods across cities.