Mixed signals from the public and private sectors at the AUVSI New England Summit
The Advanced Air Mobility (AAM) industry is facing a funding shift as venture investment declines and public interest increases. At the AUVSI New England UAS and AAM Summit in Cambridge, Massachusetts, experts gathered to discuss the state of AAM funding. With the conference theme of “If we build it, they will come?”, the panel discussion will discuss why private investors are hesitant and how public funds will support AAM’s infrastructure and operations. We considered how we can play an important role in this. This conversation provided a grounded perspective on the future of AAM, highlighting both the challenges and opportunities ahead in achieving widespread adoption and integration.
Funding status: private sector cautious, public sector concerned
Moderated by MITER’s Dr. Kerry Buckley, the panel included industry leaders to discuss notable changes. After a nearly 50% decline in venture capital from 2022 to 2023, AAM venture capital continues to decline in 2024. In contrast, government interest and investment is accelerating globally, with states in the United States beginning to test pilot programs.
This change creates an apparent discrepancy in the signal. Jim Graham, senior vice president of Delta Connection and CEO of Endeavor Air, spoke about the challenges of integrating AAM into established aviation systems. “We need to meet the same reliability and safety standards as the major airlines,” Graham emphasized, noting that for AAM to be successful, it will need to operate in all weather conditions and have a steady flow of passengers like today’s airlines. He added that there is a need to respond. He noted that while AAM enables new travel routes, achieving full reliability remains a major hurdle.
Different visions of AAM: public needs and commercial goals
The diversity of potential applications for AAM complicates the investment environment. Jeff Brunig, senior manager of MITRE’s UAS and AAM division, noted that each state may pursue different use cases, from commercial services to public services such as medical transportation in remote areas. “If you’ve seen one state, you’ve seen one state,” Breunig said, emphasizing the breadth of AAM’s applicability across the United States. A need that also acknowledges that potential depends on meeting local demands and matching service provision with public services.
For investors like Mass Ventures’ Stacy Swider, AAM’s appeal lies in its potential to address mobility needs while balancing risk and reward. Swider advised companies to “take it one step at a time” and aim to establish a stable revenue stream before expanding. “You need protectable intellectual property, a competitive edge and a strong team,” she said, emphasizing the importance of sustainability in AAM ventures. As Swider pointed out, AAM’s main competitors are not other AAM companies, but established travel options such as cars and trains that offer reliability and affordability.
Infrastructure and operational challenges
Graham and Breunig agreed that for AAM to be commercially successful, it must provide a seamless user experience and requires a reliable infrastructure. Mr Graham pointed out the need to establish cost-effective routes that provide consistent service. This means “flying back and forth throughout the day.” He emphasized the importance of keeping operating costs manageable and integrating AAM within existing air travel hubs, which is a complex challenge given the current congestion at major airports.
Swider added that AAM’s infrastructure challenges extend to building a viable vertiport and training a workforce that can sustain high-tech operations. He questioned whether specific locations could support fire safety measures for charging stations and electric AAM vehicles, adding that clear public acceptance was needed. Swider said companies can consider traditional engines as an entry point before moving to electrification, exploring simpler and potentially more profitable paths until the technology matures. he suggested.
Mr. Breunig posed an audience question about the potential of AAM to address regional transportation disparities. He noted that AAM could provide much-needed connectivity for regions that cannot support a 50-seat aircraft, but this will require strong partnerships with state and federal governments. Swider reiterated the importance of such collaboration, noting that some small communities could benefit from public-private partnerships to fill “gaps” of unmet demand.
The way forward: public funding and long-term viability
The committee concluded that while AAM holds great promise, achieving commercial viability is likely to take time and continued public investment. For AAM to become a mainstream option for travel, the limitations of current technology must be addressed.
The future of the industry is likely to depend on partnerships between government and private entities to build the necessary infrastructure and support initial operations. With state and federal funding, AAM may one day reach the scale needed to become a viable transportation alternative in the United States. But until companies can provide the reliability and affordability needed, questions remain. If we build it, will they come?
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Miriam McNab is the Editor-in-Chief of DRONELIFE and CEO of JobForDrones, a professional drone services marketplace, and a keen observer of the emerging drone industry and the drone regulatory environment. Miriam has written over 3,000 articles focused on the commercial drone sector and is an international speaker and recognized figure in the industry. Miriam has a degree from the University of Chicago and more than 20 years of experience in high-tech sales and marketing new technologies.
For drone industry consulting or writing, please email Miriam.
Twitter:@spaldingbarker
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