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Urban Air Mobility – Evolving Regulations Influencing the Growth of the Market

The increasing urban population in most megacities is going to demand an alternate mode of transportation to decrease land traffic congestion, and the best solution for daily commuters is the replacement of existing transportation with aerial transportation. A part of the future urban landscape, urban air mobility provides safe, highly automated passenger and cargo-carrying air transportation services in the metropolitan environments for piloted and autonomous aircraft systems.

Various companies have been investing directly or indirectly in the urban air mobility industry and have taken numerous initiatives in developing air taxis and personal air vehicles, as well as the necessary infrastructure such as vertiports and unmanned aircraft system traffic management systems for these vehicles to operate safely. Some of the key companies in the urban air mobility market are Lilium GmbH, Acubed, Volocopter GmbH, EHang, and Kitty Hawk.

Based on a recently published market intelligence report on Urban Air Mobility (UAM) Market by BIS Research, the market is estimated to be around $5.73 billion in 2023. The growth of the market is attributed to increasing demand for an efficient mode of logistics and transportation service and the growing adoption of urban air mobility due to environmental concerns.

During the report development, collaborations were done with various stakeholders to gain a holistic understanding of the intricacies associated with the UAM market. Following is an excerpt from the conversation between BIS Research analyst and Felipe Varon, Founder and CEO at Varon Vehicles Corporation. Access the complete interview on Urban Air Mobility (UAM)- Evolving Regulations.

Analyst: What role will UTM play for traffic management for UAM?

Felipe: UTM is a very important type of service that will probably be used in order to define these virtual structures in the airspace architecture. UTM systems are service providers that have the capability to define these virtual structures in the air. Unlike roads and other forms of physical mobility infrastructure, urban air mobility is virtual; we cannot see any lanes or pathways for the aircraft in the air. With the help of UTM and other air navigation technologies, we will be able to define the paths using precise coordinates and altitudes.

Analyst: There are several regulatory bodies for civil aviation across the world, but when it comes to eVTOLs and drones, the rules are still unclear in many countries. What are your thoughts on this? What is the timeframe that you are looking for to get a global set of rules and regulations?

Felipe: We need to separate drones from UAM. Drones are unmanned, and urban air mobility is about manned aircraft. Regardless of where the operators are (on board or on the ground, such as remotely piloted), urban air mobility will have people on board the aircraft, so by definition, UAM does not use drones. That also means that the regulations for those aircraft are different from those for drones. Drones are more mature; drones have existed for a longer time and are a thriving industry. Urban air mobility has been recently invented, and we are still working on it. The way we are approaching the UAM nascent industry is by working with the regulators. We are working very closely with the Colombian Civil Aviation Authority, we are also part of NASA’s Advanced Air Mobility workgroups, in which the FAA is involved too, and we have more than three dozen collaborations with companies, aerospace corporations, universities, and others, with whom we work on how to implement our concept of operations and airspace use. We have come up with our own airspace architecture for the Latin American region.

Together with the Colombian Civil Aviation Authority (CAA), we have devised a very simple way to initiate first operations. These first operations call for segregated blocks of airspaces that are low altitude and in which we can initiate our first operations with very specific characteristics.

Following are the characteristics:

  • These are low-altitude airspaces that are currently not being used.
  • These operations will not share airspace with other aircraft; hence, we are not mixing our operations with existing helicopters and airplanes.
  • We are not burdening any of the traditional aviation assets; we are not communicating with air traffic control (ATC), and we are not using any traditional aviation assets such as radars.


UAM will use segregated airspaces that are labeled as airspaces for urban air mobility operations; these are not airspaces for general aviation or military aviation or even recreational aviation. This is a new label, a new type of airspace. We are currently working with the aviation authorities and regulatory bodies to differentiate these airspaces for urban air mobility operations. Inside these airspaces, we are developing permanently pre-determined and fixed virtual lanes with the necessary buffer zone separations to connect our Varon Vehicles vertiports. These virtual lanes will be used by our eVTOLs to service between our vertiports, and we will orchestrate our traffic of UAM aircraft, so that the ATC is not burdened at all. Additionally, we are taking all the safety measures of not only designing an architecture that is well thought out, with proper safety measures and operational capabilities but also with all of the off-nominal situation management capabilities.

Analyst: Due to the huge growth in opportunities and revenue generation streams, several companies such as Hyundai, Airbus, Bell, Uber, along with numerous small and medium manufacturers, have entered the market recently and started their own business models and product portfolios that suits their target audience. What do you think about this competition between established aviation companies and emerging players?

Felipe: Urban air mobility is a completely new industry, such as the automotive industry was a century ago. It is not so much about aviation; UAM uses aviation as a tool to achieve its mission, but our mission is not in aviation; it is on the urban side of things. The value of urban air mobility is in the city and suburb. . There are different players and different stakeholders in every industry. In UAM, we will have aircraft manufacturers; we will have fleet operators; we will have technology providers. Today, each company is trying to find its place within the industry. There is a reason why Boeing and Airbus don’t deal with the passengers; there is a reason why they don’t own any airlines; there is a reason why they don’t own and operate airports. Designing and manufacturing real aircraft, certifying them, and then maintaining them is a very complex task. It is a very capital-intensive endeavor as well. I think we will eventually come to understand where we all fit in this new industry.

Analyst: What are your final thoughts on the opportunities driving the air taxi operations, and what are the other opportunities that will be benefited from UAM operations?

Felipe: For air taxi operations, we will have to collaborate with ride-hailing companies. We have to integrate the three components of our mobility infrastructure (fleet of aircraft, airspace architecture, and vertiports) with the platforms of ride-hailing partners. Imagine taking a passenger from their origin to their destination.

If a passenger chooses to fly as part of the trip, we will have to pick up and take that passenger to the nearest vertiport, have the aircraft ready and orchestrate the demand of many passengers. The person reaches the destination vertiport and then is picked up by a vehicle and taken to the final destination. All of this has to be done in an efficient way for it to make sense. In addition to this, we need to operate UAM in densely populated urban centers.

Think about the level of complexity in this process. We are still very, very far away from seeing this happen in reality. There are several other markets that UAM can address much simpler and faster than air taxis. Urban air mobility will not happen overnight, and it will not begin inside the cities. That is a misconception and a wrong perspective fueled by the media. Urban air mobility will happen from the outside in. We will start in the regions in the unpopulated areas. Then we will move to the suburbs, and eventually, over the years, as all this matures, we will eventually come into cities with operations inside the existing urban structures.

So eventually we will reach the air taxi market. This cannot be done by urban air mobility operators alone. It must be done together with ride-hailing companies. They already have the customer base, they deal with the Business-to-Consumer (B2C) side of the business, and they have the platforms.

*All answers have been reproduced with permission from the respondents.

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