Robbie Bourke
Despite the destruction that we’ve seen from COVID-19, the dream is still alive for urban air mobility.
Narrator
Welcome to the special edition of the Velocity podcast. Aviation industry experts were not able to convene in person at the Farnborough International Airshow this year. The Farnborough team brought the event to the virtual platform with the FIA Connect series of digital events.
Oliver Wyman’s Robbie Bourke was invited to participate in a session alongside Bobby Healy from Manna Aerospace and Dan Czerwonka from Zipline, taking a closer look at the challenges and hurdles that face the urban air mobility industry. Thank you and we hope you enjoy the show.
Robbie
Good afternoon, everybody. My name is Robbie Bourke, I’m a vice president at Oliver Wyman. I lead the Oliver Wyman technical division called CAVOK across the European region.
It’s my great pleasure to talk about some perspectives that we have on urban air mobility and also the challenges that are facing the industry. We’ll start off with just detail perspectives and then will look into some use cases.
One of the contexts that we have to think about at the moment is obviously COVID-19. It’s been a significant impact to the industry, the aviation industry globally, as well as challenging our everyday lives. The global health pandemic has changed our lives fairly significantly.
Despite the disruption that we’ve seen from COVID-19, the dream is still alive for urban air mobility. Over the last 12 months, we’ve seen some progress on the technology side but also lots of activity on the regulatory side as well as some detailed working through on infrastructures and new business models.
We talked last year at US 1.0 about the strong demand drivers that we have and drive the business case for urban air mobility. The first of those was urbanization. Our analysis says that 60% of people would live in cities by 2030. Road congestion has a huge impact on global GDP. €100 billion congestion cost in Europe was the estimates in 2016, as well as time sensitivity or work-life balance; our ability to be able to spend time on what we want to do.
I think one of the key questions, that we now need to answer on the back of COVID-19, is, ‘Is there a change in dynamic in our cities and will that change some of the demand drivers for urban air mobility?’ I can speak personally when I say I haven’t been to the office for five months as I know many people haven’t and I work in London, so, no, I’m not traveling there anymore. This gives me time with my family, gives me time to do other pursuits. I think some of those questions around that time sensitivity really needs to be understood.
In addition, are people going to be living in cities as much as they were before? Again, is that a trend towards urbanization going to continue? I think we need to really think about those questions as we go through the business case for urban air mobility. When we look at market disruption, we know that electrification, autonomy, and connectivity are the three key areas that need to show significant progress in order to make that business case really work.
On electrification, I’d also say probably what about other potential energy means, hydrogen, fuel cells, et cetera. So, these elements of macro disruption are really in progress. We’re seeing some excellent results in some areas and some big questions in others. In terms of the barriers to realizing the urban air mobility vision, we’ve talked many times around the key for the reliability gap and making sure that urban air mobility is able to bridge that gap to meet the aviation standards that everybody expects. Energy performance, we talked about electrification, just a moment ago. How do we really hit that energy performance standard that we need to hit?
Airspace management is a key part of being able to operationalize urban air mobility and what goes with that is infrastructure development, but I’m not going to focus on those too much today because I want to look at the two enablers. I want to change the picture here from barriers to enablers, social acceptance in autonomy.
Around social acceptance, you’ve got to think about noise as being the key element that we need to focus on. And together, these six paths are going to help accelerate and scale urban air mobility, so that it’s established as part of everyday life. One of the interesting comparisons that we often see with eVTOL with particularly taxis is helicopters. We hear about it being quieter, significantly more reliable, significantly less expensive, significantly safer. However, I think we need to check on those claims because with developments that are happening in UAM at the moment, they need to address each of those different parts.
Oliver Wyman have completed some analysis on out-of-the-box reviews on urban air mobility and that initial analysis suggests that the costs of piloted eVTOLs could be as much as $150 for a 30-minute trip for a medium-sized air vehicle. And I think that cost base puts it in a different category to what we all see is a scalable urban air mobility model.
However, you can see a significant reduction in that cost space by autonomy, by higher utilization and by increasing load factor but naturally comes with wireless air taxis but also comes with broader social acceptance. This comes back to the point of autonomy and vehicle utilization that are going to be the primary drivers for a viable mass population business model.
When we look at public acceptance without question, noise will be the driver. I think anybody across the industry that I’ve talked to are related to noise. They brought me back to, why is it that helicopters are not flying around as common as we might expect them to be, and I think helicopters can be seen as being a leading use case for urban air mobility in this context and largely is because of noise. Noise then drives lower acceptance, and that lower acceptance drives lower utilization, and that low utilization increases car costs. These are the elements I think we need to look at. And when we look at where public acceptance is going to be the highest, it’s going to be clearly in young and educated generations, but we need to make sure to bring the public along with us. We’ve talked about air taxis extensively, what we are now starting to see is the cargo UAM use cases is really starting to take some hold, really testing the boundaries of operationalizing UAM, as well as testing the regulatory environment that they need to operate in. And we’re seeing quite a number of these cases now start to really provide good test beds.
We heard in the FAA session earlier the reference to crawl, walk, run and I think following that track on cargo UAM first followed by eVTOL is going to be the successful tracks that we need to take off. What we wanted to do is look at two use cases, Manna Aerospace and Zipline. There are a number of others, but we wanted to just look at these and talk to Manna and Zipline to see what did they think was key to their ability to be able to operationalize currently in the crawl phase and also what challenges and things they need to look on the focus on in order to move forward into walk and run. We will look at these use cases now.
Bobby Healy
Hi. I’m Bobby Healy, CEO and Founder of Manna drone delivery based in Dublin, Ireland and Pontypool, Wales, where we do manufacturing. Manna is a drone delivery as a service business. We don’t just design and build a software and hardware for our platform; we also operate it. Our team roll out infrastructure to one of our partners and will operate it for them. We monitor all of the flights from our centralized mission control, but we also have people on site, making sure that everybody’s safe, in terms of operation of the aircraft. We are a small company, about 28 people today, mostly engineers, and we’re largely in the R&D phase of the business although we are live in a couple of towns at the moment.
As I said, drone deliveries is a service business planning to transform rural and suburban communities, by carrying everything from every retailer, producer, in the neighborhood to everyone in the neighborhood, carrying to two to four kilos of cargo at about 70 to 80 km/h. And then hovering when we arrived to deliver the parcel.
The biggest hurdles to operationalize a business-like Manna would be breaking that into software, hardware, hardware that flies, hardware flies that is regulated and then the government or hearts and minds. For software, that’s a straightforward problem to solve. Hardware relatively easy to solve and build as well. Drones are very standard technology, now a combination of electrical, mechanical, aeronautical engineering, get you most of the way there.
The regulatory aspect of what we’re doing is probably I won’t say the most difficult, but the most time-consuming and time-consuming not in the amount of resources that you put into it but the amount of simply iterated, time that you have to through, you know, we're running routinely, 10 000 test flights a month now to achieve the level of safety, the number of the nines of reliability that we believe that we have, or to measure them should I say and that's hard. It takes time and every failure, you reset the clock and so that's difficult. But again, black and white engineering problem that we are well able for.
Then on the other side, regulatory there’s RH Aviation Authority that we’ve been working with for a number of years. Really, I have to say a terrific supporter of the business of the drone space in general and a key part of us going so fast, so fast without risk. But so fast almost a commercial pace, I’ll be at in a regulatory context. So here we have a regulator that’s willing to let us test out of things, try are things, go through the process with them and engage fully with us to be able to commercialize the business and that’s very rare. We’re certainly ahead of most of the world already by being able to try out the things we’re trying out.
And then after that, the biggest one which is yet to come is the battle of hearts and minds is when we do roll at our service, how will people feel about it. There’s a lot of concerns around drones, honest and genuine concerns, some founded someone particularly ran privacy policy, noise levels, those kind of things. Those are the future challenges that we will see as we scale out the business, not so much the operational, but as we start to scale it up.
The next steps in Manna, scaling our business will be around widening the regulatory scope that we have access to, so, to start in small towns. In the aviation industry, there’s a term that gets rolled out a lot that says crawl, walk, run and so we’re at the crawl phase now where we’re doing small things to demonstrate our capability both functionally, technically, and on a safety level. And for us, it’s going to about that for the next 12 to 24 months. We’re going to gradually widen the scope for operations where now we’re in a town of 1,000 people, next month we’ll be in a town of about five to 10,000 people. We’re not in a rush to commercialized as business. But we’re in a rush to do as demonstrated to this business is a safe well operated airline business and that takes time. So, for us, scaling is more about increasing the scope of our operation ahead of true scaling which will be, as I said, it probably won’t start for 12 to 18 months and when it does, it will go at a breakneck speed.
My advice to the entire UAM industry, both passenger and cargo, is for everybody to proceed cautiously, to proceed optimistically and transparently. In other words, to talk a lot about our safety systems, to talk a lot about the privacy systems and how we respect privacy particularly, but also on the safety side, please don’t anyone try to race to fast. There’s a lot we have to prove, not just that the hardware fly safely. We have to prove that we can integrate together in the skies. We have to prove that we pose no air risk whatsoever, let alone the ground risk. I would caution anybody that’s trying to go to quickly, particularly with maybe off-the-shelf drones flying in public places, to tread cautiously, crawl before you walk, before you run.
Dan Czerwonka
Hello everyone. My name is Dan Czerwonka and I head Global Regulatory Affairs at Zipline. Zipline is the world’s first commercial drone delivery service operating at national scale. We started in 2016 with commercial deliveries in Rwanda and we’ve since expanded to both Ghana and the United States. We have two facilities in Rwanda and four in Ghana, one in the US for deliveries and then two more deliveries for testing and production.
For those of you who might not be familiar with our system, we actually use a small-fixed wing aircraft. It delivers up to two kilograms payload up to about 80 kilometers away. When we started Rwanda in 2016, we started with blood and today we deliver about 80% of the national blood supply outside of the capital city of Kigali. In Ghana, we now deliver from four facilities to over a thousand different hospitals and health centers and in the US, we just started delivering in North Carolina as part of the US IPP program.
One of the really interesting things that this COVID-19 pandemic has brought about is sort of an accelerated interest in contactless delivery and particularly using drones. In Ghana, actually, about three months ago, we delivered the world’s first COVID-19 test samples and that was a really interesting problem in a lot of ways, not least of which was figuring out how to work with regulatory bodies there to actually make it happen. So, we have to work closely with the Ministry of Health obviously, and we had to implement all different kinds of protocols and procedures for actually handling those test samples. And we had to work with the civil aviation authority to figure out how to actually fly those routes. And because we're carrying potentially hazardous material, we work very closely with the air traffic control there to coordinate deliveries to both the main testing labs in the country. And, it just turns out that both of those labs are within three to four kilometers of the two biggest airports in the country. So designing routes, coordinating with air traffic control in a way that doesn’t overburden them, those are just some of the kind of problems of the that we face on a day-to-day basis and have to figure out how to address those things.
What were some of the hurdles, the challenges in operationalizing a business, to overcome. When I started, I spent about two years in Africa actually building our first facility. The first two in Rwanda and then in Ghana we had to figure out, what does a drone-port look like, what does a medical facility at a drone-port look like, how do we get power to it, we’re operating in very remote areas so how do we construct them? It was a lot of trial and error and figuring things out as you go, but you constantly develop and get better. And as we started operating more and more, those operations would inform our decisions. We’ll need to work very closely with a lot of different regulators to make this happen.
The other thing I wanted to point out is that we had to figure out how to change the perception about drones because when we started, drone was a bad word. It was not a lot of positivity with the use of drones. And so, we really wanted to change that and change people's perception and let them know that drones can be used for anything, amazing thing. And so, we’re trying to be very open and transparent about our operations. We want to be really good neighbors in the airspace too. We tried to reach out to all the other airspace users our areas and let them know where we’re operating and when we operate. We’re starting to see the fruits of that labor because people are understanding now that drones can be used for great things.
What are the next steps in terms of scaling our business, also look for a problem or a challenge that’s being faced and then design something that can meet that need or fix that problem and you’ll avoid that solution looking for a problem scenario where I think a lot of early drone start up fell into where like, ‘hey, I have a new drone platform, somebody do something awesome with it,’ and it’s a gamble. The approach we took was we identified blood shortages, getting blood in a short amount of time was a real problem. We thought, well, we can get rid of roads and use drones, maybe we can get the blood there faster and save these lives or help doctors and nurses give better care. Now, several years later, we’re still taking that same approach and we’ve identified some other problems in some other areas that we think we can improve on and we also now have the benefit of all this flight data and all this operational data over the last few years. All of that can inform the design decisions for our next systems and then we’re designing to meet specific needs, not just taking guesses and things.
If I could give one piece of advice to everybody in the urban air mobility industry, it’s identify those problem areas, those things that need a solution that doesn’t exist yet and figure out how your system platforms can possibly solve that problem. Then the other thing I would say is just get comfortable with working really closely with your regulators. This is still advice I give myself and when you’re so close to your own product and your operation, you sort of take things for granted and assume that everyone knows the stuff about your business that you do. But, regulators, for example, are the third parties, they don’t know unless you explain it to them. Just communicate a lot with your regulator, your healthcare regulators if you are in health industry but particularly your aviation regulators. They’re in charge of keeping the skies safe and they need to be able to make really confident decisions about your operations. You want to get them a yes so you can fly, so you can test out and show then that you’re an innovative new product is an amazing game changer that you know it is, right. And I think that's probably the biggest piece of advice I can give.
And for regulators, if I could give you one piece of advice, it would be – and it’s going to sound silly – but it would be just rekindle that enthusiasm you had for aviation as a kid. We’re at the beginning of a new golden era of aviation and it’s a really exciting time. There’s a lot of innovative cool new things coming out and the next 50 years is going to be mind-blowing. And you guys are charged with keeping our skies safe and data shows that unmanned systems are safer than manned systems. If we are going to develop the safest skies possible, it needs to include unmanned aircrafts as well to the extent that you can find a new enthusiasm about all these kinds of technologies that are coming over your desk everyday looking for approvals. I think you’ll be able to find ways to enable them to also use the airspace but maintain that really high bar of safety that we’ve always had in manned aviation.
Yeah, that’s pretty much it from me. Wish you all the best and looking forward to seeing you over the next horizon.
Robbie
Great stuff. I think we’ll probably at a point of wrapping. While it’s still a long way to go, it’s really feeling like it’s getting traction and those cargo use cases are certainly starting to really bring it to life. Thank you for joining us for this special edition is the Velocity podcast. We invite you to subscribe so you’ll be notified when the next episode goes live. The full session recording is available on the linked website. A link can be found in the episode description.
This transcript has been edited for clarity.
