Welcome to the latest edition of our CEO Update. This time, we are talking about Advanced Air Mobility, an exciting new segment in the aerospace sector. When TTTech started its aerospace business more than 25 years ago, Advanced Air Mobility was still an application for the future, but now it has developed into a new, exciting market segment. To talk about the sector, its development, and TTTech’s part in it, TTTech CEO and co-founder Georg Kopetz welcomed Kurt Doppelbauer, Vice President Sales & Business Development for TTTech’s aerospace business. Kurt worked for IBM and founded a software company before joining TTTech. He took an active part in shaping the aerospace business and building up the company’s U.S. subsidiary, starting with TTTech’s first aerospace customer, Honeywell.
Georg, why is Advanced Air Mobility (AAM) so interesting for TTTech and what is the status of the market?
Georg: Advanced Air Mobility includes very compact, very lightweight, very automated, most probably hybrid and/or electrically powered vehicles, that will help us to improve efficiencies in megacities, but also in the connection between rural areas, cities, and airports.
Let’s go into a bit more detail: Since 2004, more than 20 billion US dollars have been invested in the sector, even last year, more than four billion went into it. Just recently, we saw the announcement of Joby Aviation receiving another 500 million dollar investment from Toyota. We see Hyundai with Supernal entering the stage and we have a lot of interest from very serious players, e.g., Boeing with Wisk, etc. to go into this market. I think it is very exciting because it brings transportation and logistics to the third dimension, because it helps us to get off the ground and into the air.
AAM is very highly automated, so the vision is to be flying autonomously without a pilot, both for passengers, for quick and easy, on-demand traffic in mega cities, but also for cargo delivery, or for emergency response operations. There are different estimates of how large the market will be, but it will for sure be a market that is worth tens of billions of dollars and growing at a very high rate – if we can qualify, and certify, and validate these systems and if we get public trust and confidence.
Kurt, how do you see the status of the industry, and which use cases do you believe are the most interesting?
Kurt: Advanced Air Mobility (AAM) is divided into four sectors: Starting with the uncrewed aerial vehicles (UAVs) or drones that are the number one and have been there for many years. Then, urban air mobility (UAM), which is focusing on electric vertical take-off and landing systems, the regional air mobility market that is really up to 19 passengers, up to 300 kilometers, and the regional air transport market.
The most immediate revenue-generating one is really the UAV, i.e. the drone market. There are a lot of applications already, up to 800,000 paid services last year, in 2023. The applications are for medicine, transportation, for blood transportation, and for groceries as well. There are a lot of service industry applications in terms of firefighting and observation areas for pipelines, for example. However, the biggest growth area is definitely for cargo drones.
Then the urban air mobility market – a market that already has the first certifications in China. And there, the starting point will be taxis within big cities, between airports, for example, or rural areas. The regional air mobility market is also for connecting different cities, and also islands, as well.
There are a lot of applications coming up in this industry. And a big topic is certainly certification, and how we get to it. And with first certifications, in China, this is already happening. The bigger take-up is really not only certification of the aircraft, but for the whole ecosystem – i.e. from vertiports to standardized charging systems etc.
Kurt, how do you see the safety and enabling technologies in this market? Where do you see major challenges and where is the industry in adopting new technologies?
Kurt: In aerospace, safety is number one and it all needs to play together: the safety of the vehicles, air transportation, and operations. The biggest challenge is definitely the certification of the aircraft, because the requirements are different for AAM vehicles and commercial aircraft, in terms of size and affordability. There is also a lot of effort going into setting up the infrastructure, such as the vertiports, where UAM and electronic vertical take-off and landing vehicles (eVTOLs) will start and land. And we also need to consider the challenge of air transport management (ATM) systems that need to accommodate a lot more vehicles in the future. In terms of technology, more automation will be needed, especially for UAM, to make it economically viable.
Georg recently moderated a panel discussion at “The Autonomous Main Event” about Autonomy beyond Automotive. There, the topic of AAM using automotive components for cost reasons, but aerospace processes for safety reasons, came up. What’s your view on this?
Kurt: I think that AAM manufacturers are really driving the industry in terms of more powerful network computing platforms that are certifiable to level A, the highest safety standard in the aerospace industry. At the end of the day, safety is also relevant for the automotive industry, so I think there are a lot of synergies when working together. There is a lot of technological innovation happening in this market for certifying the aircraft and getting them on the market, as well as providing options for future upgradeability of the systems. However, all leading players in the UAM market are starting from the highest certification standards.
Georg: One of TTTech’s lead customers, Honeywell, is developing the AnthemTM cockpit, to be deployed in various of these new AAM vehicles. According to them and other players in the market, it seems that the certification approaches for AAM are quite different for the FAA (Federal Aviation Administration, USA) and EASA (European Union Aviation Safety Agency). Kurt, what is your experience in certifying these systems, is there a need for more dialogue with the certification agencies and authorities? And what role do you think a company like TTTech can play?
Kurt: The founding principle of TTTech was aerospace safety at automotive cost. So, this was always the vision of the company. We have certified our products for the most demanding applications, i.e. flight controls and engine control systems, to the highest standards in the aerospace industry. And the big Tier 1 companies (e.g., Honeywell, BAE Systems, Collins) also want to reuse systems such as avionics and flight controls for UAM applications. They are depending on this in the beginning, so I think there are a lot of synergies between those markets. Honeywell has always been at the forefront - their platform is a really open platform, with the connection to the cloud being a key aspect. TTTech has done certification from component level to development process, to complete system safety. And all the leading players in the AAM field right now follow the highest safety standards in certification.
Subscribe to our newsletterand receive CEO updates directly to your inbox
Kurt, which markets do you think will be the first ones to adopt AAM, which regions and countries are most open to adopting this kind of new advanced air mobility?
Kurt: I think it's a power play between China, USA, and Europe. China is leading right now because they are the first country to have certified UAM vehicles. But I think for the broad adoption, certification and reliability of systems is very, very important.
There is a lot of push for and alliance for this in the USA from all the stakeholders right now, because it's not only the certification authority, but also the traffic control, the whole government, the communities that are pushing in this industry. I think the Western European countries need to ensure that they are also working together in order to make AAM happen.
And the Chinese certification right now is applicable only in China. The FAA or EASA will not allow these aircraft to fly into their airspace, unless they comply with FAA or EASA standards. So, we definitely have to look at what's happening in China, in terms of technologies and what they're doing and how they're flying. But at the end of the day, safety is number one, and all players have to work together to make it happen and get the aircraft to the market, as soon as they are certified.
Operational safety and infrastructure are essential to achieving a wide deployment of AAM systems – do you see any showstoppers, such as noise level and environmental concerns?
Kurt: Noise level is an issue, but there have been many studies comparing the noise profiles of UAV/UAM with other applications. The conclusion was that this noise level is only a fraction of that found in helicopters or conventional piston engine aircraft right now. In building the infrastructure, as well, we will first be looking at vertiports positioned, for example, above a highway, close to ports, and at airports, where the overall noise profile will be higher than that of UAM or drones.
AAM will be a big business opportunity and have a big impact on our societies. What about the return on investment: When do you think the industry will break even and when will we see positive cash flows and profits?
Kurt: In the UAV and drone market, the biggest delivery company in the world, Amazon, will save money with every drone that they apply in the future and there, the economies are immediate. In the UAM market there are studies as well and projections from different companies that economies are in range, a higher price, flight taxis, for example, as well. How much can be saved depends very much on the batteries, the battery density, I think it’s in the operations as well. Within the next five years the investments will pick up again because certifications will be finished. After the first certification in China, it will happen in Europe in 2025 and then in the USA. And then the operations side will also start, with the most profitable use cases in the beginning being the airports, which is a more premium segment where people are willing to pay more to get from point A to B. I think within the next five years, operations will start to be profitable.
Kurt, when you look 25 years into the future, what do you think will be the impact of UAM on the economy and the aerospace industry? Will there be a tradeoff between ground mobility and air mobility?
Kurt: I think it’s really a mobility concept for the future. That’s why you also see the automotive industry investing heavily into this market. It will be augmented, a new space that will be used for many applications that are more economic to do over the air. What we’re seeing with Honeywell and on the AAM market is that autonomy will happen first on the aerospace side, because the majority of the flight is already autonomous. In this instance, you can provide services much more economically, if you do it autonomously over the air. It's a really good mixture that enables us to do more with less and also reduce the CO2 profile. Maybe you won't need to travel so much anymore in the future. Overall, I think there's a challenge ahead, definitely, but it will start to happen in the air transport market, and we will gradually go in this direction.
TTTech is involved in the AAM sector and has a lot of customers there already. What role does TTTech play today, and which role do you foresee five or ten years from now?
Kurt: TTTech has always been focusing on state-of-the art technologies, on aerospace safety at automotive cost. TTTech has always been at the forefront in terms of networked computing platforms and the focus on the network side and the aerospace side. We have state-of-the-art technologies right now when we started, it was 100 kilobits of data, we are now at gigabits of data and still ensuring the level A certifiability of those systems and making sure that the certification is really on a system level. So, these are really the synergies that we have in the company between the automotive industry, the off-highway market, and the aerospace industry, the economies of scale that we can achieve with this highest level of certification - we are unique in this market.
And, we have proven that our technologies can be used on air transport for flight-critical systems, even in space, for NASA applications. It's really the founding architecture below these whole computing platforms in the future, to really enable 100% level A certifiability, but at the same time allowing innovation upgradeability of the system, the technology insertion of this high-performance computing that is required.
Kurt, you have been sitting in AAM systems on the ground already. When do you think you will take your first flight?
Kurt: Two weeks ago, I was on the flight simulator at Joby Aviation. I could fly the aircraft there and that's a unique part of it as well – it's been made so easy that anybody can fly this in the future. I think the first commercial flights of these vehicles will happen in the 2026 timeframe. I'm happy to fly on the ones that I know, and I trust all the European and U.S. companies that are investing in this market.
Georg: We are very happy to be part of this evolution and in the center with our networks, and hopefully, in the future, also with more components from TTTech in terms of computing platforms. And we are looking forward to making it happen.
Georg, Kurt, thank you for this overview about this emerging market. We are looking forward to many more exciting AAM projects and the growth of this industry segment!
