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As the founder and partner at SMG Consulting, Sergio Cecutta has often been a key subject matter expert in the eVTOL sector. Lending his time and expertise, Cecutta recently moderated a number of panel sessions during the AIRTAXI World Congress in San Francisco, California, last week. Vertical caught up with Cecutta during the event to get his take on the state of the eVTOL industry.
This interview has been edited for length and clarity.
Vertical: If you could sum up the top five major accomplishments or developments in 2023 so far, what would they be?
Sergio Cecutta: I would say the Joby delivery to the Air Force. It is a bit like the first customer delivery of an aircraft, so I think that is very important. More and more of these first flights in general, I think that’s very important. And I’m still waiting to see a conforming aircraft come out of a factory and fly. I’m hoping that by the end of 2023, we’ll see one.
Another one, and this is more of a preparation, but all the work that’s been put toward Paris 2024. I know it’s next year, but we need to start preparing for it this year because it might be our prom for the industry. It’s the first time that we’re coming out, so I think that’s very important.
And this is more an item that the industry is going through, but it’s the fact that capital is not as easy to raise as before. This is a painful new reality for the industry that we need to deal with.
There are a lot of big accomplishments coming in the next year or two. This year, there has been a lot of good things and a lot of little steps in the right direction.
Vertical: What are your predictions for 2024?
Sergio Cecutta: I am bullish on Paris. I think Paris is going to happen and it might be an “entry into service light.” It’s not going to be a lot of airplanes, but at the same time, it’s going to be the first time that we test how all of this comes together. That means Volocopter needs to be certified by 2024, and maybe it means the certification of one or two airplanes on the both sides of the ocean. So, 2024 might bring hopefully one vehicle certified in each of the major markets.
In 2024, I would also like to see construction of vertiports because if we want to enter service, we need to have the infrastructure for it. The last piece is going to be the first delivery to customers. If you look to the three legs of the entire ecosystem, you have to have an airplane that’s operated by someone and land somewhere.
Vertical: Which eVTOL developers do you think will win the race to certification?
Sergio Cecutta: I don’t know if I can tell you who is going to win, but because of what we do with the tracking and index, I think right now it’s probably a two-horse race in the U.S. with Beta and Joby when it comes to delivery of an electric aircraft, because Beta is going to do it with an eCTOL and Joby is going to do it with an eVTOL. In Europe, it’s definitely going to be Volocopter. I don’t think there’s anyone else that can do it in the same timeframe.
Vertical: And you didn’t mention Archer. Why is that?
Sergio Cecutta: I didn’t mention Archer because their schedule is very compressed. They still haven’t flown their full-scale aircraft. Joby and Beta have been flying for tens of thousands of hours. We think flight time is very important. While we don’t have any grounds to doubt that [Archer] will be able to make it, we think it’s a highly risky schedule. There is a lower probability that they will make it in the timing that they’re talking about.
Vertical: You talked about the U.S., and Europe. What about Asia-Pacific? Would that be EHang?
Sergio Cecutta: EHang, yes, but I would say specifically China. I think EHang is a China aircraft for China. It might find a home in countries that are aligned with CAAC [Civil Aviation Administration of China]. But for sure you won’t see it in any country that follows western regulations for the simple reason that if you follow regulations aligned with EASA [European Union Aviation Safety Agency] or FAA [Federal Aviation Administration], you can’t certify an autonomous aircraft.
Vertical: Do you think EHang is going to have to modify its aircraft if it wants to certify in the U.S. or Europe?
Sergio Cecutta: I think they need another airplane if they want to certify with EASA or FAA. I mean just the rotors that are exposed at leg level, that’s not going to happen.
Vertical: What about EHang’s other VT-30 model? What do you think about that model coming to the western regions?
Sergio Cecutta: The other model seems to have taken a backseat to the certification of the [EH216]. The other model is more promising because it’s more of a jack-of-all-trades. However, it’s kind of stuck in limbo. I’ve asked many times for updates, but again, rightfully so, their focus right now is on getting to 216 into service.
Vertical: We talked about eVTOL developers that might win the race. What communities do you think will win the race?
Sergio Cecutta: We see two different types of communities. We see what we call the “prom queens,” the large cities that everyone wants to be at, and then the smaller cities that want to have the service in place.
If you look at the larger cities, most of them have bigger fish to fry than advanced air mobility. For example, [Los Angeles] in 2028. While we think that it would be a great place to start eVTOL services, LA has a big problem with homelessness, so that needs to be solved before we figure out the other stuff.
The interesting part about the smaller cities is they might not be the cities in which you’re going to make bank, but these are the cities that are removing all the obstacle out of your way to make the service happen.
At the same time, you will see a lot of these services being catalyzed by a specific event, so the Olympics in Paris. In Rome, you have the Jubilee that will bring a lot of pilgrims to the city [in 2025]. Milan [Italy] is talking about the Winter Olympics in 2026. Osaka [Japan] is talking about the World Expo in 2025. It seems like we’re hitching a ride on these specific events in order to jumpstart the service in a specific city.
Vertical: We’re familiar with all the major eVTOL developers — the ones that dominate news headlines. What eVTOL developers do you think should receive more attention?
Sergio Cecutta: Overair — I think they’re doing a lot of good work. They’re getting ready to roll out a full-scale prototype, and that’s very important because they have proven that their slowed-rotor technology works in itself but they’ve never put it on a vehicle. It’s going to be very important to put it on a vehicle and fly it.
Electra deserves a little bit of a spotlight because they’ve been very conscientious in the steps that they’ve taken with the Goldfinch. It’s still a subscale, however, it puts together a lot of these technologies and it finally proves eSTOL. I mean we’ve done eSTOL in the past, but we’ve never done it with electric propulsion.
If you’re not looking at just passenger transport, then Elroy Air. They would provide capabilities that are very much sought after in the cargo/logistics arena. The beauty of [their aircraft] is it can transport the right loads far away without a pilot. There is really no equivalent right now.
Vertical: I’ll throw one out there. What about AutoFlight?
Sergio Cecutta: AutoFlight — it’s an interesting company. It’s the only company from China that’s trying to bridge the divide between the geopolitical blocks. The smart thing that AutoFlight is doing is using China for the things that China does well, and then using the West for the things that the West does well.
They are basically developing a big cargo unmanned eVTOL and that’s great for the Chinese market because it can be certified. At the same time, using the same platform, they want to do a passenger aircraft with two versions — one for China with Chinese avionics, and then one for Europe/U.S. with Western avionics.
It goes around whatever the restrictions are between the two blocks. It’s an interesting approach that no other Chinese OEM [original equipment manufacturer] right now is pursuing.
Vertical: Can you highlight a key issue in the eVTOL industry that isn’t getting as much attention as it should?
Sergio Cecutta: It’s important to think about production because in the end, if you don’t make them, you’re not going to make any money. There is a lot of emphasis on [partnering with] the automotive side of the house. However, while automotive is awesome at volume, a car is not an airplane. Cars can come out of a plant with quality defects, but that would never fly in the aerospace side, because quality defects mean you’re violating your production certificate. The airplane needs to be fixed.
It’s good to learn from the automakers, but I don’t know if putting the whole thing in the hands of an automaker is the right strategy. Beta shows you that you don’t need an automaker to be able to build a facility, and they are the only one with a large-scale facility.
Vertical: What are the biggest challenges for eVTOL developers beyond certification?
Sergio Cecutta: I would say number one is public acceptance, and to tell you the truth, I prefer to use the words public adoption. It is a market that has what we define as push demand, as in there isn’t a customer that wanted it. It’s a technology that has opened a new way for customers to move.
We need to do a better job to make people understand what these [aircraft can] do, and it’s not just an ESG [environmental, social, and governance] play. It’s also the fact that there’s significantly less noise. It’s a different flight profile than a helicopter.
Because at the end of the day, this is not about the FAA approving you to fly and then you can fly into SFO into LAX or into New York. Each and every city will have to approve you to fly, and there’s a lot of cities.
Vertical: Can you tell us about SMG Consulting’s AAM Reality Index and AAM Infrastructure Readiness Index? What was the catalyst behind developing those, and what trends are you seeing in the sector?
Sergio Cecutta: The catalyst was an internal need to understand the movers and shakers in the market, and then we thought that maybe a lot of other people had the same questions. It seems like they did, so it enjoyed the relative success.
There are two trends that we’re seeing. The first is it’s taking more time to do the things we think we need to do. There’s still a lot of optimism — let’s use the most positive word — when it comes to some of the schedules.
The other trend is capital. If you look at where the money has gone this year, the money has gone to the same people that already raised a lot of capital. Why? Because they’re better understood than some of the smaller one.
Vertical: We recently learned the FAA reauthorization has been extended to Dec. 31. Are you surprised? What key issues does the FAA need to address to facilitate AAM?
Sergio Cecutta: The fact that we haven’t received a full authorization for the usual four-year term talks about the divide in Washington. I’m not surprised there is a lot of division in Washington.
I think the FAA’s change to power-lift was unexpected, but at the same time, now that we’re on that road, the FAA is going through the documents with a sense of urgency. While the FAA has said that they will not get in the way of certifying these aircraft, I always caution the fact that these companies have agreements, not contracts with the FAA.
The FAA works for us, the flying public, and they need to deliver to us a safe vehicle. Their goal is not to make companies money, so they still need to go through the same rigor, but I think it’s very comforting the fact that they said, “We are not going to get in your way by dragging our feet when it comes to developing the regulations.”
Vertical: What are your thoughts on the FAA’s proposed special federal aviation regulation (SFAR) for pilot training and operations? What issues are you hearing from companies?
Sergio Cecutta: The regulations were a first draft, and they were developed, as always with new regulations, by taking what’s already out there and modifying it. That doesn’t take into account the technology available in all of these aircraft. We need to develop tailored regulations for eVTOLs without failing on safety.
The dual-power control for training, I think that’s a very hot topic coming from all the OEMs. If you look at SFAR from the point of view of certification, the same problem is going to be with the 30 to 45 minutes for reserves. Again, those were meant for airplanes that fly for hours. Is it really logical that an airplane that flies eight minutes needs to have 30-minute reserves?
These are some of the things that we need to look at. However, if you look at it from the point of view of the regulator, they don’t have any data.
Vertical: Are you optimistic these issues will be resolved?
Sergio Cecutta: I think so. Not to diminish the safety impact, but we want the U.S. to be one of the countries that is out there at the front edge of this revolution. In order to be at the front edge of the revolution, you need to understand the revolution.
Vertical: Is there anything else you want to tell the eVTOL community?
Sergio Cecutta: It is imperative on all of us to spread the word [about eVTOLs] because it helps make a large part of the population understand this. Our goal is not to become a vertical business jet for the few. The goal is for us to say, “Should I take an Uber? Should I take a subway? Should I bike? Or should I take an eVTOL?” In order for that to become part of our daily vocabulary, we need to make sure that everyone knows about it.