Estimated reading time 10 minutes, 36 seconds.
Confidence in the industry. That’s how Ricky Sandhu describes the U.K. government’s investment in helping construct his country’s — and the world’s — first operational vertiport prototype.
“It’s the first time any government in the world has invested in eVTOL infrastructure, and it’s provided a huge boost confidence in the entire sector,” explained Sandhu, who is founder and executive chair at U.K.-based vertiport developer Urban-Air Port. “It’s now incumbent on us to take that seed and grow it.”
The “seed” money spent on this vertiport project is a successful example of how governments around the world can provide financial support for the development of eVTOL infrastructure, but there are certainly others.
No one expects that private industry won’t foot most of the global vertiport construction bill, but just what role governments should play in funding vertiports is “an excellent question,” said Rex Alexander, president and executive director at Indiana-based consultancy Five-Alpha, “and one that is being heavily debated at the federal, state and local levels in the U.S. right now.”
Funding risk — and reward
Returning to the “seed investment” model that Urban Air-Port has benefited from in creating its Air-One vertiport, let’s jump into some details.
It stemmed from a grant that became available to stimulate the eVTOL sector through a program called the Future Flight Challenge, launched by the U.K. government’s Business, Energy and Industrial Strategy.
“I think there were hundreds of entries with about 20 winners, and we were the only infrastructure winner,” Sandhu said. “We received £1.2 million [US$1.5 million], which was about 20% of the costs of development and construction, with the rest invested by ourselves and other partners, and the site being offered for transformation by the municipality of Coventry.”
He continues, “at this point, Air-One has been the most successful project from the Future Flight Challenge. That’s taxpayers’ money and it’s up to us to take it from there. Some of our future projects may involve joining with other governments but we’ll start with focusing on private investment. We don’t expect the U.K. government to provide any more grant assistance to us but pivoting to more infrastructure finance support to go build the networks. Their support so far has given us, and this industry, a great deal of confidence.”
Air-One, located in the city of Coventry, has successfully hosted a flight involving a 150-pound (68-kilogram) cargo drone that has never flown in such an urban area before (the flight path was cleared of traffic and people), allowed the public to view Supernal’s S-A1 air taxi prototype, and also hosted dozens of police drone flights. Police are keen to continue using the site.
Building on that success, Urban-Air Port plans to open 200 sites around the world over the next five years in agreements with Hyundai and its subsidiary Supernal, and through other private deals. Its first two orders are from Canada-based Dymond Group. Urban-Air Port is also raising capital in a Series A event that closes in mid-July.
“We’ll have news soon about a vertiport overseas with eVTOL test flights planned, but we can’t yet say where that is,” Sandhu said. “All current projects are privately-backed, but we think working with other federal or state/provincial governments through something like the Future Flight Challenge is ideal. It’s a really great model for others to follow. The Challenge was an intensely competitive process and rightly so — it’s taxpayers’ money — and in awarding us the grant, the government has taken a risk that turned out to be worthwhile. Whether this can happen in other countries I don’t know, but I’m hopeful some of them will follow the U.K.’s lead, seeing the success that we’ve had here.”
At least one U.S. state government, West Virginia, is interested in providing funding for vertiports, although the way or ways this might happen are not yet clear.
What we do know is that legislation was recently passed in West Virginia which outlines how the state will “promote the development of a network of vertiports that will provide equitable access to citizens” for cargo and passenger service, through three main avenues.
First, the state will encourage local land use authorities to ensure an adequate number and a varied location of vertiports. Secondly, it will also promote competition and equitable access by prohibiting the granting of exclusive rights to vertiport owners and operators.
Supernal, which is based in West Virginia, has reportedly lobbied hard for this protection against other eVTOL developers that may be ready to go to market before they are.
Third, West Virginia might also provide funding for the planning and construction of “public-use” vertiports.
Indeed, whether a facility is public-use or private-use, and/or publicly- or privately-owned are the two current U.S. Federal Aviation Administration (FAA) categorizations that come into play in whether vertiports may potentially receive federal funding, Alexander said. But there are complications to both accessing and using these funds.
First, for comparison, Alexander explained that of the nearly 6,000 heliports in the U.S., only 1% (58 of them) are “public use” (and 651 are publicly-owned, many by the Department of Defense or other government bodies). Public-use facilities are the only ones for which federal grant funding under the Airport Improvement Program (AIP) is available. Of the 58 public-use heliports, Alexander said that only three have ever used AIP funding.
He explained, “Additionally, when someone uses these federal grant monies, they are then subject to all of the obligations set for by federal grant assurances.”
Application to vertiports
Besides perhaps not being very likely to receive much in the way of federal funds, public-use vertiports may not be the best idea for another reason, Alexander said. He noted that “given the throughput volume this transportation ecosystem is looking to attract, public-use models could be seen as a significant challenge in achieving the throughput levels sought while maintaining a reasonable level of risk.”
That is, “public use” facilities are risky because there is no requirement for prior approval of the owner or operator to use them, and anyone who is properly certificated and flying an aircraft that is properly equipped is allowed to access the site.
Conversely, there is a much lower level of risk if a facility is private-owned and private-use.
“The owner [of such a facility] has complete oversight as to who can and cannot use the site,” Alexander explained, “and can go as far as requiring letters of agreement with all operators that include such things as minimum insurance, minimum licensing and additional education.”
However, in Alexander’s view, allowing true privatization of vertiport infrastructure will require the introduction of a new federal classification.
“Many states currently recognize the additional classification of commercial use,” he explained, “which opens up the door for a hybrid system to take root where there can be a public-private partnership. This has shown significant promise in Europe, Latin America and Asia but has failed miserably in the U.S.”
For his part, Andrew Cummins, director of business development at Archer Aviation — a company working with REEF to turn the rooftops of selected parking garages into vertiports — expects public-private investment schemes to be part of urban air mobility in the U.S., as final regulations are hammered out.
In his view, “the current expectation is that many of the initial sites will be privately financed and then once the service expands, other financing models like public-private partnerships will begin to enter the market. Archer is evaluating all of our options, including partnering with infrastructure developers, owners and operators. In many regards, we view collaboration as the key to successfully launching the industry. In fact, many current airport owner/operators are looking to invest in vertiports as it’s a natural extension of their current core business. I’m also encouraged that other early-stage companies are raising private capital to specifically address this part of the value chain.”
However, in Alexander’s view, there are also other possibilities for government funding of advanced air mobility for the sector to grow in the U.S.
He suggests that some government grant money might not be best invested in vertiports per se, but instead on the development and implementation of systems for air traffic control and weather reporting.