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Constraints on capital and shifting investment priorities could trigger a shakeout in the crowded eVTOL aircraft and urban air mobility sector, according to Kirsten Bartok Touw, founder and managing partner of the AirFinance group. Speaking at an April 29 NBAA-organized webinar on the future of innovation in aviation, she said companies able to attract investment before the Covid-19 emergency are now far better placed to bring their aircraft to market than competitors that still need to find funding.
“If companies have enough cash, they will be full steam ahead, but others will have to step back as they face uncertainty over where they are going, especially those who do not have a diversified cash flow,” Bartok said. “There will now be much more differentiation between winners and losers.”
According to Bartok, the fallout from the Covid-19 pandemic is likely to accelerate consolidation that will see more than 250 prospective eVTOL programs reduced to just three&nbsp;or four&nbsp;players among the independent startups. She added that a few of the leading aerospace groups will also be&nbsp;active in the fast-emerging sector, although some large companies may now re-evaluate their willingness to put more money into the technology.
“I would bet on companies that already have the cash [to advance their programs] and don’t need any more for at least another 18 months,” she stated. In her view, companies probably need to plan on spending as much as $2 billion to $3&nbsp;billion to get their eVTOL aircraft into production.
AirFinance has been working with several eVTOL companies trying to raise funds and Bartok said that it has generally been harder to get some venture capitalists to consider proposals in recent weeks. “Most venture capitalists are now trying to shore up their portfolios and ensure that they have enough cash to get through the next 24 months,” she explained. “There has been a downturn in many [venture capital] portfolios and now it is harder for them to raise funds from places like endowments and foundations.”
In her view, Airbus is one large group that is likely to remain committed to eVTOL development. This view was supported by comments made earlier on April 29 by group CEO Guillaume Faury, who told analysts that he views investments in the “decarbonization and increased digitization” of aviation as long-term priorities.
However, Bartok believes that financial pressures on rival Boeing in the wake of the grounding of its 737 Max airliner, compounded by the steep downturn in the air transport industry, could cause it to scale back its exposure in the eVTOL sector. Just last year, the U.S. group invested in startup Kitty Hawk to form a joint venture called Wisk to develop the Cora aircraft.
One company that did secure significant investment before Covid-19 wreaked havoc in financial markets was Joby Aviation, which&nbsp;<a href="https://www.ainonline.com/aviation-news/business-aviation/2020-01-15/toyota-invests-big-evtol-developer-joby">in January</a>&nbsp;completed a $590 million Series C funding round led by Japanese automaker Toyota, which invested $394 million. Kate Fraser, the company’s safety lead, told the webinar that Joby is still on track to complete type certification of its four-seat S4 eVTOL by the end of 2023. However, she added the caveat that this date would represent “an introductory launch” for urban air mobility operations, and that it would take several more years to scale up to mass transportation and add features such as the ability to operate in all weather conditions and fly autonomously.
Fraser argued that Covid-19 could tip consumer sentiment more in favor of new transportation options provided by eVTOLs that would allow travelers to bypass more crowded spaces. She also believes that rising environmental concerns will strengthen the case for electrically&nbsp;powered aircraft.
That said, the disruption to working lives evidently has affected companies trying to advance new aircraft designs, and companies have had to make adjustments to their programs. “We’re trying to stay on track [with the S4], but it could slide to the right a bit [in terms of the aircraft’s development timeline,” explained Fraser. “However, our people who have been focusing mainly on hands-on work have now had more time to provide input for the certification effort, and we’ve also been able to focus more on areas such as training and how we can reprioritize to come out of this as the best company we can be with the strongest focus being on safety.”
Both webinar speakers indicated that regulators have demonstrated significant flexibility in response to the latest public health emergency. They expressed hope that this might encourage agencies such as the FAA to be more willing to fast-track regulatory process for the new-generation aircraft. However, according to Bartok, the breakdown of trust resulting from the controversy over the FAA’s handling of the 737 Max certification appears to have undermined the degree of integration and partnership between the U.S. agency and its European counterparts at EASA.
Bartok also pointed to the U.S. Department of Defense’s recent declared interest in supporting eVTOL innovators to ensure its warfighters can benefit from the technology. Just this week at the Agility Prime event, U.S. Air Force leaders appealed to private companies to take advantage of its joint-development opportunities, such as support for flight testing.

Martha Jercinovich

eVTOL startups that raised substantial funding before the Covid-19 pandemic, such as Joby Aviation, are more likely to be able to bring their aircraft to market versus those that still need funding, according to AirFinance founder and managing partner Kirsten Bartok Touw. (Photo: Joby Aviation)

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