Electric vertical takeoff and landing (eVTOL) air taxis are years from being commercially available, but that’s not keeping people from asking: How much will passengers be asked to pay to fly on these new aircraft?
Altogether, investors have been betting billions of dollars on eVTOL companies like Joby Aviation, Lilium, Volocopter and others that are promising to build an entirely new form of convenient, safe, and environmentally friendly urban transportation.
Some, like Archer Aviation, are projecting that on-demand, electric air taxis could be flying short hops over Los Angeles, Paris, and other major cities as soon as 2024.
According to company executives, investor materials and a NASA study, each eVTOL passenger might pay from $2.25 per mile to as much as $11 per mile, depending on several unpredictable factors.
But are these projections realistic—or simply optimistic?
“You can’t sell any of this stuff if you don’t make optimistic projections,” said Robert Mann of R.W. Mann & Company, a longtime aviation industry consultant, former airline fleet planner and aeronautical engineer.
There are more than 150 emerging eVTOL startups, according to industry reports. Morgan Stanley recently named Joby Aviation an early standout, calling it a “pre-revenue company with the potential to disrupt aviation. However, we recognize that the company has a long runway to commercialization.”
To be fair, eVTOL companies are taking on historic challenges, says Robin Riedel, a partner at management and consulting firm McKinsey & Company, who analyzes and tracks disruptive aerospace and air transport industries.
“They’re trying to build some of the largest aerospace manufacturing companies ever [by units] and some of the biggest airlines ever [by number of departures],” Riedel told . “They’re trying to build integrated mobility platforms, like the ride-hailing platforms we have today. And they’re trying to do all of that in record time.”
Morgan Stanley acknowledged that for one company to build both an airline and an aircraft manufacturing business simultaneously “is challenging and extremely capital intensive.”
So, making educated guesses about passenger prices for a new transportation industry that’s trying to do so much might be asking a lot.
Nonetheless, if and when the eVTOL industry gets off the ground, there are several key factors that will influence the price passengers will pay:
The industry needs to think more about end-to-end pricing, say experts. How will passengers travel to and from eVTOL takeoff and landing points, aka vertiports? Walking? Uber or Lyft? To get a fair and accurate idea of what the entire journey will cost, the so-called “first mile and last mile” should be included in the pricing. Customers need to be able to compare the price of the entire trip.
“We really do care about the last mile,” Archer co-CEO Adam Goldstein told FLYING. “Our whole value proposition is saving people time. So location really will matter here.”
Building a large network of vertiports could drive passenger prices higher. However, Archer and Joby are trying to offset some of that cost by partnering with parking garage company REEF in a plan to retrofit existing parking decks into conveniently located vertiports.
Joby aims to solve the end-to-end equation with help from its partnership with Uber. (Joby acquired the Uber Elevate startup in 2020.) Joby air taxi passengers would piggyback off Uber’s existing rideshare app to hail ground vehicles for the first and last miles.
Morgan Stanley offers a few details, saying Joby’s “vision for ridesharing is multimodal, including both car and aircraft elements… Joby plans to coordinate rideshares that will drive customers to and from Joby’s skyports.”
That strategy could help Joby fill more seats in its aircraft, further driving down passenger prices.
On-Demand Rideshare: Does it Make Sense?
It remains to be seen if on-demand ridesharing can generate enough revenue to keep expensive eVTOLs in business.
Several eVTOL startups are envisioning their businesses as rideshare hailing services that offer quick 25-mile flights on demand. Passengers would order flights to destinations of their choice at departure times of their choice. These point-to-point, on-demand flights would whisk them above congested urban landscapes to their destinations in a few minutes, avoiding gridlock on the ground.
But experts warn there may be problems with the on-demand, rideshare model. The aircraft will be very expensive to build—estimated prices per unit range from about $1 million to more than $3 million. To pay for these aircraft, the number of flights and passengers—aka utilization—must be consistently high.
“If you want to get high utilization, you have to fly a scheduled network,” Riedel says. “You cannot fly point to point on demand.”
Let’s take a look at how major commercial airlines do it. They gain revenue to pay for their airplanes from passengers who purchase flights on a scheduled network of established routes. Roughly, airlines could pay in excess of $300 million for a new widebody jet. Carriers typically share the cost of their fleet with hundreds of passengers on each flight, during thousands of flight-hours per year, for about 25 or 30 years.
Compare that with an eVTOL airline that would share the cost of its fleet over less time with fewer flights and only a handful of passengers per flight. The math doesn’t work, says Richard Aboulafia, veteran commercial and military aviation consultant and vice president of analysis at Teal Group.
“It’s all a recipe for carnage.”
A network of scheduled eVTOL flights might garner enough passengers to pay for these expensive electric aircraft over time, but there’s a problem with that, too. Scheduled networks become less interesting to customers, Riedel says. “If it’s on a schedule, I have to adjust my life to the schedule, and my willingness to pay goes down.”
Archer Aviation says each of its eVTOLs will fly more daily flights than “a typical livery car,” making “approximately ten 25-mile trips each day.” Archer is aiming to fly “up to 25 of those same trips per day. Higher adoption rates will help bring down pricing further,” according to the company website.
Investors have crunched their own numbers about how much eVTOL companies need to scale their airlines in order to achieve viable utilization. According to a Joby investor deck, utilizing 300-plus aircraft in Los Angeles alone, could generate more than $500 million in annual revenue. Morgan Stanley’s research estimates that Joby needs to grow its entire fleet to about 1,900 aircraft in its first decade of commercial operations.
Also, there may be hidden factors at play that lengthen the journey, says Mann. There will be a safety briefing before takeoff. (Instructions about seatbelts, emergency exit plans, etc.) Passengers may have to wait for inbound aircraft to arrive. There may be delays while batteries are recharging or being replaced with fresh batteries.
In reality, what initially seemed like a short flight across down might take the better part of an hour, Mann says. “And in that same hour, you could have gotten into a black car livery service and driven there, on most days.”
Actually, there is a vertical takeoff and landing, on-demand air taxi currently in service that offers real-world comparisons.
Launched in 2014, Blade Urban Air Mobility is available in New York, Los Angeles, Chicago, and other cities. Keep in mind, Blade uses fossil fuel-burning helicopters. But what Blade shares with the eVTOL is vertical flight and on-demand rideshares from established takeoff and landing zones.
Within 30 minutes after booking on Blade, you can fly between Manhattan’s West 30th Street Heliport (KJRA) and John F. Kennedy International Airport (KJFK) for $195 per seat in about five minutes. Distance: About 19 miles by car and about 14 miles by air. If you need end-to-end pricing, you can also include an SUV for the first and last miles of your journey. By the way, Blade has started working with several eVTOL manufacturers as part of a plan to transition to electric aircraft.
Blade’s price point appeals more to the business traveler, not the everyday commuter, Mann says. Electric air taxis might find their core customers in a similar demographic. “Early adoption will be at the high end of the economic spectrum,” says Mann.
So, how much would electric air taxi passengers really pay? In a recent LinkedIn post, Riedel crunched a few numbers to make an educated guess about the actual price per passenger for an imaginary 30-mile eVTOL flight.
He started with an estimated price per passenger per mile: $3.30 on a 25 mile trip = $82.50. Next, he multiplied that by all four passenger seats on a typical eVTOL aircraft ($330). Assuming (generously) that 75 percent of available seats will be filled on each flight, Riedel divided $330 by 75 percent of the seats (3) and he came up with a rate of $110 per passenger for a 25-mile flight.
Next, he compared that number with a typical basic rideshare rate (~$1.50 per passenger, per mile) and a pricier black car livery service rate (~$3.75 per passenger, per mile). He applied these rates to the same mythical destination—25 miles as the crow flies. He assumed car travel on the ground would be less of a straight line than flying. Due to roads, he estimated the same destination would require a bit longer route, say, 30 miles.
Final result of Riedel’s number crunch:
- Basic rideshare cost: $45
- Black car livery service cost: $112.50
- eVTOL projected cost: $110
In this imaginary scenario, an eVTOL flight would be more comparable to a black car livery service, not a basic car rideshare.
Paying for Pilots
Here’s another hidden potential cost to keep in mind: Emerging eVTOL airlines say they plan to rely on the existing pool of available commercial pilots for their workforce. Most of these pilots are trained to fly traditional jet airliners in high-altitude conditions, not electric-powered rotor technology at low altitudes, which is the eVTOL profile.
Training pilots to fly eVTOLs would cost money. Also, with so much talk now about pilot shortages, it begs the question: Would there be enough pilots to fly these new fleets of eVTOLs? If so, will economic supply and demand allow pilots to command premium salaries? These hidden costs would be factored into passenger prices, experts say.
‘Ridiculously Successful Unicorn’
With so many hurdles to overcome before reaching success, why have so many people been investing so much money in eVTOL companies?
“A lot of people are willing to place hundreds of $10- or $20-million bets in the hope that one becomes a ridiculously successful unicorn that makes you rich,” says Aboulafia. The problem is, “that’s not usually how aviation is funded.”
In the end, Aboulafia doesn’t see eVTOL transforming urban transportation and creating an entirely new era of aviation.
“When the smoke clears after scores and perhaps hundreds of bankruptcies, we should have some interesting technology that could be disruptive to the civil rotorcraft industry,” Aboulafia predicts. The new technology that results from all of this, he said, might help double or triple growth in the rotorcraft business.
Mann offers a more optimistic, yet measured view.
“Over some time frame, a lot of the goals surrounding eVTOL will come true—but not necessarily all of it,” Mann said. “So thus, the realized costs may not really be as low as industry leaders are predicting.”
Riedel says in general, the technology and transportation goals theoretically can work.
“But given the early stage of this industry, I think we should still expect half or more of these companies not to make it in the long run, ultimately.”
Currently, several companies, including Joby and Archer are moving steadily toward FAA certification for their eVTOL aircraft. Joby has flown its prototype and Archer is expected to fly one by the end of this year. In Europe, Lilium, Volocopter and others are moving closer to certifying their eVTOLs with EASA. Volocopter briefly flew a two-seater demonstrator at the AirVenture airshow in Oshkosh, Wisconsin, this past summer.
A Joby manufacturing facility is currently under development in Marina, California, according to Morgan Stanley. Archer tells FLYING it is looking at potential locations in three states to build a manufacturing plant.
Archer Co-CEO Goldstein said the company’s goal is to launch its service “at the end of 2024.”
“Overall, we want to make an experience that consumers can love.”
That sounds good. But it’s still too soon to know which consumers will be able to afford it.