Insight – The US market for sub-500 Miles flights |

The growing interest in eVTOLs is driving a lot of market research. Fortunately, the US has scads of data on air travel - probably the world's finest and most detailed. Analyzing the data allows one to understand market sizing and opportunities. Here's a look at the sub-500-mile market in the United States. Note that this information is not only of interest to the eVTOL crowd - it has the same value to operators of regional aircraft. Let's look at the US market for sub-500 Miles flights. Let's start with the market size. The first thing to note is the trend is not great. The number of flights has been declining steadily for some time. The 2022 data is through May and is not a reflection of the whole year. A second item to note is that the geographic size of the US market is NOT a driving issue here. A sub-500 mile stage length is more likely to be driven by the number of large communities that require travel to smaller communities within the range. Essentially, in the US case, hub airports. Here is an example of New York as an origin point. We see a declining trend, as expected. However, look at the volume of traffic per flight over the period. Next, here we have Los Angeles as the origin. The drop-off is steeper and levels off over the period. We see passenger/flight volume under 10. Next, San Francisco is the origin point. Another interesting overall decline with a bump in 2016. At the risk of boring the reader, we refer you to our data model (see page 2) where you can type in any US city for an origin point. The resulting chart provides you with the traffic trends. Based on current published information, any electrically powered or hybrid-electric aircraft cannot operate out to 500 miles with a decent payload. Of course, "decent" is a subjective term and there are some people who would cover the fare for even one seat. Fortunately, the data suggest the market for flights out of large cities seems to support small loads and that should work for the aircraft being planned. But it is also true that the arrival of these aircraft is likely to change the way we travel. Air taxi service is expected to grow because the new technology enables this. Moreover, the cost is likely to be far cheaper than it is today. For example, not only is electrical power likely to be cheaper, electric motors have one moving part meaning much lower maintenance costs. The former CEO of MagniX in a webinar we ran during the pandemic spoke about exceptionally low costs. Disruption can be expected. On page 3 of our model, we recommend a similar exercise to that suggested above. Here's the image for 2004 with New York as the origin point. The left axis lists the number of passengers per year and the ball size also reflects this same number to allow for a perspective. Clicking the "play" button at the bottom left takes you through the history to see how the market evolves. What is especially interesting here is to see that there is a grouping of communities around 150-200 miles out of New York that may warrant attention for operators. Even though the market shrinks over time, there is clearly potential. These people didn't disappear, they merely moved to other transport options like driving. After all, how much time would someone waste going through airport security for such a short hop? We also recommend readers type in other cities as origin points. For example, here is what Seattle looked like in 2007. Looking at the distances involved, Seattle looks like a reasonable market for eVTOL flights up to 50 miles. Beyond that, up to 150 miles, there appears to be even stronger demand. On page 4 of the model, we offer another opportunity to change origin points. This example is Hyannis, MA. Not a large origin point, but home to an important small airline called Cape Air. Note this page looks at 50-mile flights. So we are now focusing on short ranges. Also, note the US DoT does not clean their data well - communities show up sometimes with a comma and other times without, so the list is messy. At the bottom of the image we have two smaller tables - one lists the aircraft types deployed and the other lists the operators. Based on the data we can see these operators are working with aircraft whose economics could quickly be upset by a fuel cost spike. Operators who are working with thin margins would jump at an aircraft that does not see its economics seesaw with Jet-A pricing. Since the average load is four people an operator wants the least number of variables to upset their operations. The new aircraft being developed should meet this criterion. Cape Air has already made its first move. In conclusion, as the commercial aviation industry embraces zero emissions we expect to see the first impacts happen in this segment of under 500 miles. The data support the market as viable and even attractive. As operators build experience, we expect to see operations expand and new markets open up. This segment is truly an opportunity with what appears to be real rewards.

US Flight Planner - US DoT On-Time Data	Airbus vs Boeing - Official OEM Data
US Airline Schedule Performance - US DoT Data	Daily OEM Production & Deliveries -

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