Urban Air Mobility Market Overview

The rising road traffic congestion in several cities is rapidly becoming a major hurdle to economic progress. By causing long traffic jams and slow movement of vehicles. The road congestion is severely affecting the movement of commercial goods and services and people from one place to another. This is making several companies initiate the testing and trials of autonomous aerial vehicles for daily commuting. Which is, in turn, driving the expansion of the global urban air mobility (UAM) market.

The rising road traffic, especially in the highly populated urban areas, is a major factor fueling the growth of the market. According to many reports, in the U.S., people spend 90 hours, on an average, in traffic jams every year. These long traffic queues increase the traveling expenditure of Americans by more than $1,000. Furthermore, the increasing number of automobiles, particularly in the developing nations such as India. China, and Indonesia, is massively pushing up the incidence of road accidents.

Urban Air Mobility Market Size

With road accidents claiming more and more lives each year. People and governments of several countries are increasingly focusing on finding safer and faster alternatives to road transportation. Urban air mobility is one such alternative that has the ability to drastically reduce the commuting time and provide faster transportation to people. The increasing popularity of these mobility solutions is making several major companies invest huge amounts of money in the urban air mobility industry.

For example, in January 2020, Toyota Motor Corp. made an investment worth $394 million in Joby Aviation LLC. Similarly, an investment of as much as $25 million was made by Hanwha Systems Co. Ltd. in Overair Inc. in December 2019. These huge investments are predicted to facilitate the development of better and faster aircrafts for urban mobility in the future. Based on passenger type, the urban air mobility market is divided into cargo and passenger categories.

Urban Air Mobility Market Share

Of the two categories, the passenger one will exhibit huge expansion in the market in the upcoming years. As the tariffs for passenger flights will be higher than the cargo ones in the future. Geographically, the European urban air mobility market will demonstrate rapid progress in the upcoming years. On account of the huge investments being made by France and Germany for procuring electric vertical take-off and landing (eVTOL) technology for commercial air operations.

The other factors propelling the surge of the market in this region are the rapid improvements in the production capabilities of major European urban air mobility companies. The rapid globalization, and the rising trend of automation in the regional countries. According to P&S Intelligence, a market research company based in India. The urban air mobility market will exhibit huge growth in North America in the forthcoming years. Because of the rising road traffic congestion in the major U.S. cities.

Urban Air Mobility Market Trends

Hence, it can be safely concluded that the market will advance explosively all over the world and especially in Europe and North America in the years to come. Mainly because of the growing road traffic congestion in the major cities and towns and the rising requirement for faster urban mobility alternatives in the urban areas around the world.

Urbanization has taken the world by storm, and while people living in cities are provided with as many facilities as possible. It cannot be said that there are no negative aspects of advancements. As the disposable income of people is increasing. The number of vehicles on roads in growing as well. This is further causing traffic congestion on roads, majorly in urban areas. For example, 90 hours are spend on an average by people in the U.S. in traffic jams every year. Which further increased the transportation expenditure by more than $1,000.

Urban Air Mobility Market Demand

This problem can be solved by making use of aerial mobility, also known as urban air mobility (UAM). The term is utilized for referring to on-demand, automated cargo or passenger carrying air transportation services. According to a report by P&S Intelligence, the global urban air mobility market is expected to generate a revenue of $895.0 million in 2023 and $6,889.4 million by 2030, and is predicted to advance at a 33.9% CAGR during the forecast period (2023–2030). Between passenger and cargo, the demand for passenger aircraft is projected to be higher in the coming years. Air ambulance, air taxi, and airport shuttle are the different passenger aircraft types.

The tariff for passenger aircrafts is predicted to be higher than that of cargo aircraft, however. Their adoption is projected to grow due to the increased traffic congestion. These aircraft have the ability to provide intercity and intracity transportation services. Between these two. The demand for intracity air transport is expected to be higher in 2023. Since currently, aircrafts are being developed for this kind of travel. Owing to limitations in battery technology and strict regulations. This being said, the demand for intercity travel is also projected to grow considerably by 2030. Primarily due to technological advancements in motors, fuselage, and battery.

Urban Air Mobility Market Growth

This would increase the range of electric vertical take-off and landing (eVTOL) aircraft, thereby enabling them to travel to different cities. Aircrafts used for UAM can be piloted or autonomous, between which, the demand for autonomous aircrafts is predicted to be higher in the coming years. This is majorly due to the fact that autonomous aircrafts are being considered better for passenger and cargo transportation services as compared to piloted aircrafts. In addition to this, aircraft manufacturers, infrastructure providers, and airspace integration researchers are increasingly providing funds for autonomous UAM services.

When geography is taken into consideration, North America is projected to emerge as the largest urban air mobility market in the years to come. This is because of the rapidly increasing traffic congestion on roads in the U.S., which will result in a larger number of people opting for air travel services. Furthermore, last-mile and cargo services, along with eVTOL aircraft, are predicted to be provided widely in the U.S. Apart from this, the demand for these services is also expected to grow substantially in Europe in the near future due to heavy investments for the development of this technology.

Hence, the demand for urban air mobility services is predicted to increase in the coming years on account of surging congestion on roads in major cities.