Huge Potential for AAM in Australia, NEXA study reveals

There is huge potential for advanced air mobility (AAM) in Australia, with Sydney and Melbourne, in particular, having strong business cases for the new technology, delegates heard at the Australian Association for Uncrewed Systems’ (AAUS) AAM Summit, which is taking place in Melbourne this week.

Australia in general has a “unique opportunity” as it is right-sized to launch AAM operations, with the South East of the country, especially Sydney and Melbourne, having the opportunity to get ahead of the rest of the world, says Michael Dyment, Managing Partner at US investment bank NEXA Capital Partners.

NEXA conducted a “deep dive” into the urban air mobility ecosystem and its potential long-term profitability in more than 80 cities around the world, including Sydney and Melbourne. It looked at each city’s current transportation issues, congestion, population density, airports, transportation infrastructure, regulations, business aviation, GDP, local politics, per capita income and other factors that would contribute to a city’s likelihood of being an early or late user of eVTOL aircraft.

Sydney and Melbourne both have “very exciting opportunities”, says Dyment. Potential revenues for AAM in Greater Sydney and its suburbs over the period 2022-2045 are estimated at USD$4 billion based on five user cases – on-demand air taxi, airport shuttles, regional air mobility, medevac and business aviation. With a return on investment of 3.14, Dyment says private capital can be attracted for infrastructure capital expenditure, predicting before the end of 2024 initial investments will be made in AAM implementation.

Forecasts for Greater Melbourne and its suburbs are even larger, at USD$5.2 billion for the five user cases between 2022 and 2045, with a return on investment of 3.6.

There are seven steps to secure infrastructure capital, says Dyment. These are to develop a business case for AAM; build a consortium of players representing each value chain; secure the metro concession from required levels of government; engage experienced financial advisors and investment banks; take the business case to the engineering and planning level; secure offtake agreements and finalise phase one infrastructure; and build initial infrastructure and begin phase one passenger and cargo operations.

Dyment says regional air mobility is the most likely initial user case, operating flights a couple of hundred kilometres. He foresees “tens of millions of dollars” being invested in AAM infrastructure over the next few years. ENDS