Electric air taxi industry must undergo ‘natural selection’

The number of companies in the electric air taxi industry will shrink next year as investors tighten their belts amid global economic uncertainty and focus on projects they believe will deliver, said the chief executive of a venture backed by the Boeing.

“I expect more ‘shakes’ next year,” said Gary Gysin, chief executive of Wisk Aero, in an interview with the Financial Times. He said funding for “many of these companies is running out. The question is, will they get another raise? [de capital] and will they continue, or not?”

The industry has attracted billions of dollars in recent years as investors have bought into the dream of fast, affordable transportation in the skies, although aviation regulators have yet to certify the vehicles.

“I don’t think there’s been enough attention to the business plans of the people who are actually going to operate these aircraft,” said Kevin Michaels, managing director of AeroDynamic Advisory. “Most of the attention is on the vehicles themselves and the technologies. But how can people actually make money? Can you have an Uber in the sky?”

People will double down on projects they think will actually work,” he added, saying investors have become “a lot smarter and more rational about what it takes to succeed in this market” after last year’s wave of enthusiasm, during which several companies were listed through Special Purpose Acquisition Companies (Spacs).

Gysin said he believed that ultimately only four or five companies would be left standing, and cited rivals Beta Technologies and Joby Aviation as rivals he “respects.”

He insisted that Wisk’s funding would continue, despite one of the company’s main investors, air taxi start-up Kittyhawk, announcing last week that it would be shutting down. The company’s goal was to build an air taxi that was smaller and lighter than others in the industry.

Formed as a joint venture between Boeing and Kittyhawk (backed by Google co-founder Larry Page), it received an additional $450 million earlier this year from the giant American planemaker, a majority shareholder. .

Kittyhawk’s exit from the market “hasn’t had any impact on us” because Page is “still in the game” with various investments in the space, Gysin said. Wisk does not need to find another partner, but is “open and in conversation” with other companies, she added.

The group differs from most rivals in that it focuses on autonomous flight. It should reveal its state-of-the-art four-seater vehicle early next month.

Boeing said in a statement that “Kittyhawk’s decision to cease operations has not changed Boeing’s commitment to Wisk”, adding that it does not expect the move “to affect Wisk’s operations or other activities in any way”.

Kittyhawk did not respond when asked for comment. “We have made the decision to close Kittyhawk. We are still working on the details of what will come next,” read his social media posts.

Last year, investors poured about $7 billion into the market for all types of future air mobility solutions, mostly through US-listed Spacs, according to McKinsey data. While all types of vehicles, from cargo planes to surveillance drones, are planned, nearly 75% of the money went to companies developing electric manned vertical take-off and landing (eVTOL) aircraft.

Much of that exuberance, however, has since evaporated. The industry has attracted $2.5 billion in funding this year, according to McKinsey.

Robin Riedel, a McKinsey partner who leads the future air mobility group at the consultancy, said there is still a wide range of industry players attracting funding. “Fundamentally, we’re still funding startups here,” he said.

Translated by Luiz Roberto M. Gonçalves