Takeaways from the 2023 Paris Air Show-Part 3

This series of stories covers our takeaways from the Paris Air Show 2023 from a strategic perspective on the topics of Technological Change, Aftermarket and Retrofit Growth, Urban/Advanced Air Mobility, SAF and Carbon Reduction, and Airbus vs Boeing. URBAN/ADVANCED AIR MOBILITY For the first time, AAM players participated in strong numbers at Paris, with one player, Volocopter, using the flying display to illustrate its capabilities. Virtually all of the major players in the AAM market were in attendance, and the activity surrounding these players was strong. Several major announcements were made at the show regarding supply chains, customers and orders, development and certification plans, partnering with other organizations, and even flight demonstrations. The clear takeaway is that this market is for real, and there are several players that will likely bring products to the market. The question then is which of these players will be successful after what is likely to be a shakeout from seven plus major players today to the eventual two or three that will lead the market and ultimately become long-term survivors. It is now time for the investment community to place their bets. Activity at the show was strong for each of the seven major players. We will summarize key takeaways by company in alphabetical order, beginning with Archer and ending with Wisk. Archer announced a partnership with Safran to provide avionics technology for the Archer Midnight aircraft. Safran will develop and test a new ultra-company avionics platform, flight control computer and navigation system on its Midnight aircraft. The new technology is estimated to be 35% lighter and smaller than current avionics systems, important as weight is critical for battery-operated aircraft. Archer also announced that its partnership with Stellantis, the auto manufacturer, for manufacturing, has moved from the concept to the execution phase. Just before the airshow, Archer added Billy Nolen, former FAA Adminstrator, as its Chief Safety Officer. EVE was particularly buy at Paris, announcing several suppliers, extending its collaboration with Blade, and announcing new orders. The company named Nidec Aerospace for electric propulsion systems, BAE Systems for advanced energy storage systems, and DUC Helice Propellers for the rotors and propellers for its aircraft. Eve also announced an extension of its collaboration with Blade to integrate the Eve VTOL into its European network. New orders for 50 aircraft from Widerøe Zero for delivery in 2027 and an order for 15 firm + 15 options from Nordic Aviation Capital. In addition, an existing order for 50 aircraft was revealed as Voar Aviation. EVE now has Letters of Intent for 2.850 aircraft. With circa 80 percent ownership by Embraer, Eve can draw on internal Embraer resources while operating as an independent and entrepreneurial business unit. Joby Aviation announced that GKN Aerospace will build and design flight control surfaces for their EVTOL aircraft. Joby, having raised more than $2 billion, is arguably the best-funded player in its class, and is expected to enter into service in 2025 after a first flight in 2018. Lilium announced a regional headquarters in China’s Bao’am district to establish eVTOL services in the Guangdong-Hong Kong-Macao region. HeliEastern will operate that service and signed a purchase agreement for 100 Lilium Jets. The company also announced that it will partner with Urban V to develop infrastructure in Italy, the French Riviera, and other locations for premium tourism routes. The company also announced that SKF will supply the electric motor bearings for Lilium, now undergoing final certification after two years of testing. Supernal, the AAM unit of Korea’s Hyundai Group, announced three additional partnerships at Paris. The first is with GKN Aerospace to advance manufacturing processes for eVTOL components. The second is with Qarbon Aerospace on future scaled eVTOL component assembly. The third is with UMBRAGROUP on new lightweight actuation technologies for eVTOL vehicles. These build on existing partnerships with Honeywell for avionics and BAE Systems for flight control systems signed last year. Volocopter announced that it is on track to launch its first eVTOL services in time for the 2024 Olympic Games in Paris. Plans are for three flight connection routes and two tourist round-trip flights to begin service. The company participated in the daily flying displays at the air show, and also completed a number of test flights in Saudi Arabia, which also plans to launch eVTOL service. Wisk (Boeing) announced the selection of Safran Electronics for the inertial navigation system for its Generation 6 aircraft. The Generation 6 aircraft is autonomous, and unlike the other manufacturers, Wisk has no plan B for this aircraft, as there is no pilot control, anticipating autonomous flight to be certified this decade. Wisk plans to be the operator for its autonomous aircraft but did not rule out selling aircraft to other operators at some point in the future. The Boeing acquisition of Wisk, announced a few weeks before the show, provides the company the resources its needs to complete its development plans. The Bottom Line Advanced Air Mobility has arrived, with several players approaching entry into service for their new aircraft. Paris Air Show 2023 was the first venue with a major presence for these companies to display their mock-ups and actual aircraft. With services planned to begin in 2024 through 2027, the key players are finalizing partnerships and tallying orders as this segment of the market, a dream a few years ago, is now becoming a reality.

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