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Aeronautics and Autonomy: Trends, drivers and limiting factors in an emerging market

First flying taxi-pilots in Dubai and LA give already a first glimpse into the disrupting future of aeronautic mobility.

Initially driven by a few start-ups, with limited use cases (e. g. focusing on regulated regions), the topic significantly gains speed with big industry-heavyweights entering the competitive game. Autonomy has become a top-prio topic on the strategic agendas – detailing questions around Room-, Right- and Way-to-win for established players in a more and more disrupted market.

The following point-of-view provides best-in-class industry insights from IAC projects to guide companies in two significant questions:

  • What is the path of the race towards autonomy in the aeronautics sector, and
  • Which positions are being taken by its best-in-class competitors today to stay ahead in the changing world of tomorrow?

Although Autonomy is supposed to be a major disrupting force for autonomy, it`s mass breakthrough is constrained by three factors.

  • The autonomy-ready technological platform of the future needs to embrace increasing needs in terms of reliability and safety. On-board avionics, a critical technological block, will need to satisfy availability and robustness specifications much more demanding than today. Functions as Detect&Avoid, communications, navigating and collaborative mapping precision and performances will need to dramatically increase.
 
  • Additionally, although EASA’s (European Aviation Safety Agency) roadmap foresees the integration of manned drones in the airspace (U-Space) already mass-market-ready by 2028, the regulatory framework has yet to be defined.
 
  • Finally, social acceptance will, in the coming years, be the major limiting factor towards mass-market-readiness. According to UBS, half of the interviewees would not accept to buy tickets to fly in pilotless aircrafts (yet).

These factors drive our point-of-view, that autonomy’s market convergence will rather grow evolutionary, than revolutionary. From our perspective planes with a single pilot (Single Pilot Operations: SPO) will be an intermediary step on the technological roadmap. The first applications of autonomous drones “Behind Visual Line of Sight” (BVLOS) will appear in uninhabited regions, for example in linear networks monitoring.

Although this will not be to the liking of everyone, home delivery will not enter the end-user-market until at least a decade.

Leading industry experts share our perspective, that Autonomy will take an essential place in our mobility-life by 2050.

It will absorb in fine almost the entirety of today’s known market shares. That drives current strategic initiatives of established players how to preserve the existing core business, beside opening up for new business models and revenue streams.

Airbus and Boeing prepare for the appearance of SPO, expected for 2025. It’s not only on their historic market that the two giants want to impose their presence, Airbus also unveiled its Vahana and Pop Up robot-taxi plans to address the intra-urban mobility segment and expand their market “home turf”.

The aeronautics giants are not the only ones striving for the “honey pot”. Many innovative start-ups and players from the automotive world see autonomy as the strategic opportunity to diversify their traditional core activities, such as Daimler investing $25 million in Volocopter as only one prominent example.

The Tech giants are not left behind: Google committed top-prio investments up to €100 million to this draw their footmark in autonomy, Uber pushes to launch its flying taxi concept into the market in 2023. 

The area of autonomy (in addition to further technological disruptions around connectivity and electrification) will significantly enhance technical platforms with value-adding service offerings.

Surveillance and transport drones are a good example for that development.


A farmer will, for example, be able to order BVLOS drones services to monitor his crops’ health status. Revenues will be generated by service providers with direct contact to the end-user / -customer via applications and will be redistributed to a lesser extent to the other actors in the value-chain (like component manufacturers, suppliers, integrators).

 

Key players react to this, with either expanding their own portfolio with dedicated service-offerings, or teaming up with other players in the ecosystem to build strategic partnerships. Airbus and Daimler understood that getting close to the end-user is key - with Daimler buying taxi-app provider Chauffeur Privé and Airbus launching its Voom service (Helicopter urban transportation ordering platform) in Mexico and São Paulo as examples. Following the same trend, drone manufacturers such as DJI or Parrot enrich its offer with operations- and data-analytics services.

Platform integrators are in pole position to take the “driver seat” on several fronts.

By segmenting their call for tenders, they control suppliers’ powers. By mastering the vehicles of tomorrow, they acquire the legitimacy to provide a value-adding service offer on emerging segments.

Some players already understand the competitive power of this position in the value-chain. Rolls-Royce, until now pure aeronautics hardware supplier, currently develops its flying taxi solution (platform and software) – pushing strategic paradigm shift from “current-customer” to “future-competitor”.

To enter and conquer the emerging autonomy market, we see different strategic approaches.

Getting closer to the end customer on most disruptive segments is one of them. The second is obviously the capitalization of its current offers. Actors such as THALES have the skills to make their mark on BVLOS civil security applications.  Finally, it is impossible not to mention partnerships or joint ventures, which are nowadays essential levers to be at the forefront of the race. Joining forces to go faster and be stronger is the leading strategic principle here, to leverage on the “first mover” advantage. Safran for example shows this as part of its agreement with Bell on hybrid powertrains.

Final question will be, how companies can respond to these new challenges to stay ahead und drive upcoming opportunities? Therefore, how to adjust its strategic offer to secure the current market shares and open up to new business models and revenue streams – either on its own or as part of a strategic partnership?

With more than thirty years of experience in the aeronautics industry supporting leading players in strategic and operational challenges, IAC can help you identify high-potential market segments and define a value proposition leveraging on existing strengths and synergies.

A strategic roadmap structures steps to close existing capability gaps and enter the market in line with a solid business case-line-of-argumentation (need for strategic investments vs. RoI).

What are you waiting for?

Article written by Julien Vauchel, Consultant.

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