Advanced Air Mobility Market Size, Share & Trends Analysis Report By Maximum Take-off Weight, By Component, By Application, By End-user, By Operating Mode, By Type, By Product, By Propulsion Type, By Range, And Segment Forecasts, 2023 - 2035

Report Overview

The global advanced air mobility market size was estimated at USD 8.15 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 24.6% from 2023 to 2035. The innovation and developments in electrical propulsion systems are anticipated to be a key factor for the market’s expansion as it allows companies in reducing carbon emissions and saving costs on fuel. Similarly, modern aircraft are capable of vertical take-offs, which solves the issue of landing and take-offs in remote areas. Such factors are fuelling the growth of the market. In addition, the trend of quick transportation and fast cargo delivery to customers is expected to attract companies to invest in advanced air mobility (AAM) aircraft.

For instance, according to McKinsey & Company, Inc., the future air mobility industry received aircraft orders worth around USD 26 billion in 2021, of which approximately 80% of orders were for pilot-operated AAM aircraft. Similarly, the growing trend of air transportation has led to an increase in new players entering the market. The entry of startups has thereby resulted in new and innovative solutions for both enterprises and private consumers. Furthermore, companies are significantly increasing their production capacity to meet the growing demand for AAM solutions while continuing to support market growth. In certain markets, government initiatives and investments in the sector are expected to be a significant factor in the market’s growth.

For instance, in September 2022, the Economic Development Administration (EDA) in the U.S. awarded approximately USD 40 million to the organizations involved in the development of the Tulsa Regional Advanced Mobility (TRAM) Corridor. Such government initiatives are expected to attract further investments by private players, given the potential of the advanced air mobility (AAM) market.Moreover, the technological developments and integration of modern equipment, such as IoT devices, in the AAM industry are expected to accelerate the market’s growth. Companies in the AAM sector are anticipated to utilize IoT hardware and software in integration with low-latency 5G networks to facilitate efficient communication and function between aircraft systems.

Similarly, the technological push is expected to help achieve the ongoing development of air taxis. Thus, advancements in technical aspects of the Advanced Air Mobility (AAM) industry are expected to add to the demand for aerial passenger transport solutions.Furthermore, the outbreak and spread of COVID-19 have adversely affected the market. Considering the impact on various industries that fall under different categories of the AAM value chain, for instance, OEMs, end-users, and others, the size of the market was negatively affected during the pandemic. In addition, due to the pandemic, the market had seen a decrease in demand for AAM solutions across the world due to the government-issued lockdowns and flying bans. However, the demand for AAM aircraft and technologies has increased post-pandemic due to the sudden rise in demand for travel.

Component Insights

The hardware segment accounted for the largest market share of 84.7% in 2022. The segment dominance can be attributed to the growing demand for AAM hardware, such as electric motors, batteries, sensors, rotor blades, and airframes, among others. Moreover, the development of new battery designs is expected to help reduce AAM aircraft weight for better maneuverability. Similarly, the introduction of new lighter electric motors is expected to help increase the flight range of AAM aircraft. This, in turn, is expected to add to the segment growth over the forecast period.

The software segment is anticipated to grow at the highest CAGR of 26.4% over the forecast period. Due to the ongoing technological development, AAM manufacturers are using advanced software to ensure safe and efficient flights. In addition, the trend of artificial intelligence and machine learning in software development is expected to increase the demand for AAM software. Likewise, the trend of fully autonomous flight operations using modern software in conjunction with modern technologies is expected to boost segment growth.

Range Insights

The intracity (20km - 100km) segment recorded the highest market share of 92.6% in 2022. The segment’s dominance can be credited to the growing development of vertical take-off and landing solutions due to the lack of large spaces for landing in urban environments. Moreover, the increasing vehicular traffic in modern cities is expected to push people toward AAM solutions. Lastly, the scalability factor for AAM companies is predicted to drive segment growth, as people are more likely to travel within city limits. The intercity (above 100km) segment is anticipated to grow at the highest CAGR of 32.2% over the forecast period. The segment is expected to grow due to the need for efficient and less time-consuming travel between long distances. AAM solutions are expected to reduce intercity travel times and fuel consumption due to the trend of air taxis. This, in turn, is expected to drive the segment growth.

End-user Insights

The commercial segment accounted for the largest share of 69.9% in 2022. The growing trend of aerial deliveries by e-commerce businesses is expected to cause a rise in commercial applications for AAM solutions. For instance, in May 2023, Amazon.com, Inc. completed hundred cargo aerial deliveries by its Prime Air department. Similarly, the development of passenger AAM aircraft fleets for transportation services by private companies is anticipated to drive the segment’s growth.

The government & military segment is expected to grow at a CAGR of 22.9% over the forecast period. The segment growth is attributed to the growing applications of AAM solutions that include firefighting & disaster management, search & rescue, maritime security, border patrol, police operations, and traffic monitoring, among others. AAM aircraft provides law and order personnel with swift responses and safe evacuation processes, this, in turn, is expected to drive market development. In addition, complex rescue and emergency operations have seen the growing deployment of AAM solutions as they offer safety and timely response options.

Product Insights

The rotary blade segment accounted for the largest revenue share of 73.5% in 2022. The demand for rotary blade AAM solutions is expected to increase due to their unique capability to hover and maneuver with agility while maintaining visual observation of specific targets for prolonged periods. In addition, AAM aircraft with rotary blades can be operated in small and confined spaces with no special requirement for take-off and landing, as such devices possess the ability to do vertical take-off and landing. Moreover, rotary blade AAM solutions offer easier control than hybrid and fixed-wing counterparts, which is anticipated to be a key factor for segment growth.

The hybrid segment is anticipated to grow at the highest CAGR of 27.3% during the forecast period. This segment growth is attributed to hybrid AAM solutions having features of both fixed-wing and rotary blades, making them more advantageous in terms of efficiency and practicality. Moreover, hybrid AAM aircraft can enhance efficiency and power by integrating the capabilities of batteries & fuel and can fly for long periods with heavier payloads, even in severe weather conditions.This is expected to drive segment growth.

Operating Mode Insights

The remotely piloted segment accounted for the largest share of 59.1% in 2022 due to its wide usagefor various commercial purposes, such as aerial photography, agriculture applications, delivery services, and infrastructure monitoring. Moreover, the trend of manual operation is anticipated to drive the segment growth as a pilot operates the device remotely using a console. The demand is also attributed to the capability of the remotely operating pilot to intervene in times of emergency.

The fully autonomous segment is projected to grow at a CAGR of 27.6% from 2023 to 2035 owing to the rising trend of autonomous AAM operations. Moreover,these AAM solutions can perform operations with no human intervention from take-off to landing entirely on their own, relying on onboard sensors, algorithms, and the implementation of artificial intelligence. This, in turn, is anticipated to drive the segment growth.

Maximum Take-off Weight Insights

The <100 kg segment accounted for the largest revenue share of 80.7% in 2022. The growth of the segment is attributed to the advantages of AAM aircraft with up to 100 kg take-off weight, such as flexibility, affordability, and convenience. Moreover, the take-off weight makes the AAM aircraft suitable for a wide range of applications while adhering to stringent regulations. Similarly, these AAM solutions are capable of maneuverability in compact areas while maintaining efficient flying capabilities that are expected to add to the segment demand.

The >300 kg segment is expected to grow at a CAGR of 25.8% over the forecast period. The segment growth is attributed to the capability of these AAM aircraft to carry heavy equipment foruse incommercial applications that include agriculture, delivery & logistics operations, among others. In addition, the popularity of these solutions increased during the pandemic as they were used in delivering medical and healthcare supplies. The aircraft were widely used to carry emergency equipment and supplies during critical operations, such as search & rescue and disaster relief operations. This, in turn, is expected to fuel the segment's growth.

Type Insights

The drones segment accounted for the largest market share of 76.8% in 2022. The segment growth is attributed to the growing applications of drones in industries, such as agriculture, media & entertainment, and logistics.The dominance of the segment can also be attributed to the presence of autonomous drones. The vertical take-off and payload capacity of drones are also among the key factors responsible for segment dominance.

The air taxi segment is expected to grow at the fastest CAGR of 28.4% over the forecast period. The segment growth is attributed to the ongoing vehicular traffic congestion issues in urban locations. Similarly, the growing demand for time-saving solutions is anticipated to be a driving factor for air taxi development. The shift from purchasing vehicles to using cab-hailing applications, such as Uber and Lyft, is also anticipated to drivethe air taxi segment growth.

Application Insights

The cargo transport segment accounted for the largest revenue share of 17.7% in 2022. The dominance of the segment is attributed to quick and efficient deliveries of goods to the homes of customers. The trend of one-day deliveries, often offered by e-commerce companies, is driving the use of AAM solutions for cargo transport. In addition, companies are using AAM solutions for cargo transport to remove warehousing bottlenecks and enhance supply chain optimization.

The surveillance & monitoring segment is expected to grow at a CAGR of 22% over the forecast period. The segment growth is attributed to use cases like monitoring, surveillance, and security that are likely to emerge in sectors with high rates of crime. AAM solutions, such as autonomous drones, are widely used for search and rescue operations for tracking elevated infrastructure that might have damaged electrical cables and unstable roofs in dangerous and inaccessible positions, and search & rescue missions. These drones are fitted with high-resolution cameras and sensors to assist in surveillance & monitoring tasks.

Propulsion Type Insights

The hybrid propulsion type segment is expected to grow at the highest CAGR of 26.7% from 2023 to 2035. The segment growth is attributed to the AAM solutions utilizing a combination of different power sources for momentum. This segment typically combines an electric motor with an additional power system, such as a combustion engine or fuel cell, to provide a cost-effective power and flying solution. This results in improved flight performance along with increased operational efficiency, which is expected to drive segment growth over the forecast period.

The electric propulsion type segment accounted for the largest revenue share of 71.1% in 2022. The segment dominance is attributed to the popularity of electric AAM products using rechargeable batteries. This segment has gained notable popularity and widespread adoption due to various advantages, such as rechargeable battery-powered operations, a safer flying environment, quiet operations, improved flight efficiency, longer flight times, and easy maintenance, among others. This, in turn, is expected to further drive the segment growth over the forecast period.

Regional Insights

North America accounted for the largest revenue share of 38.2% in 2022. The aviation and defense sector, particularly in the U.S., is seeing increased adoption of AAM solutions in the form of drone technology. The Federal Aviation Administration (FAA) of the U.S. has been testing different UAS technologies at various airports over the past few years, hence furthering the growing demand for the product. In addition, the U.S. Army, along with other members of the North Atlantic Treaty Organization (NATO), was using these programs in war-torn areas of Syria and Afghanistan, leading to a rise in product sales across the region.

The Asia Pacific region is expected to grow at a CAGR of 26.3% during the forecast period. This growth can be attributed to an increase in funding from the government for the development of aviation and defense infrastructure in different countries, majorly China and India. Asia Pacific is also a region with major political conflicts; hence countries in the region constantly try to keep their security systems and forces up to date. For instance, China has a political dispute with India, and hence the nations have started to strengthen their forces and defense infrastructure by deploying AAM solutions.

Key Companies & Market Share Insights

The key players use strategies, such as partnerships, acquisitions, ventures, innovations, R&D, and geographical expansions, to solidify their industry position. Companies are also focusing on improving their product offerings to better suit the changing needs of users to stay competitive. For instance, in February 2023, Skyway Technologies Corp. partnered with Moonware Inc. to develop infrastructure for efficient modern advanced air mobility (AAM) solutions. Some major players in the global advanced air mobility market include:

• Airbus S.A.S.

• Aurora Flight Sciences

• Bell Textron Inc.

• The Boeing Company

• Guangzhou EHang Intelligent Technology Co. Ltd.

• Embraer S.A.

• Joby Aviation

• Lilium GmbH

• Neva Aerospace

• Opener, Inc.

• PIPISTREL (Textron Inc.)

• Terrafugia

• Vertical Aerospace Group Ltd.

• Volocopter GmbH

• Wisk Aero

• Workhorse Group, Inc.

Advanced Air Mobility Market Report Scope

Global Advanced Air Mobility Market Segmentation

This report forecasts revenue growth and provides an analysis of the latest trends in each of the sub-segments from 2018 to 2035. For this study, Grand View Research has segmented the global advanced air mobility market report based on component, application, end-user, product, type, maximum take-off weight, operating mode, propulsion type, range, and region:

• Component Outlook (Revenue, USD Million, 2018 - 2035)

  • Hardware

    • Aerostructure

    • Avionics

    • Flight Control System

    • Propulsion System

    • Others

  • Software

• Application Outlook (Revenue, USD Million, 2018 - 2035)

  • Cargo Transport

  • Passenger Transport

  • Mapping & Surveying

  • Special Mission

  • Surveillance & Monitoring

  • Others

• End-user Outlook (Revenue, USD Million, 2018 - 2035)

  • Commercial

    • E-Commerce

    • Commercial Ridesharing Operators

    • Private Operators

    • Medical Emergency Organizations

    • Others

  • Government & Military

• Product Outlook (Revenue, USD Million, 2018 - 2035)

  • Fixed Wing

  • Rotary Blade

  • Hybrid

• Type Outlook (Revenue, USD Million, 2018 - 2035)

  • Air Taxis

  • Drones

  • Others

• Maximum Take-off Weight Outlook (Revenue, USD Million, 2018 - 2035)

  • <100 kg

  • 100 - 300 kg

  • >300 kg

• Operating Mode Outlook (Revenue, USD Million, 2018 - 2035)

  • Remotely Piloted

  • Partially Piloted

  • Fully Autonomous

• Propulsion Type Outlook (Revenue, USD Million, 2018 - 2035)

  • Gasoline

  • Electric

  • Hybrid

• Range Outlook (Revenue, USD Million, 2018 - 2035)

  • Intracity (20 km - 100 km)

  • Intercity (Above 100 km)

• Regional Outlook (Revenue, USD Million, 2018 - 2035)

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

    • Italy

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa

    • Saudi Arabia

    • UAE