Demystifying #eVTOL adoption involves learning a couple of simple things about the airline industry. Some are textbook deets of which one is knowing there are two main cost drivers for an airline: the acquisition or lease of aircraft and the operational expenses which becomes more complex delving into specifics like route planning and fleet selection.
#Airlines that thrive amidst the fluctuations, influenced by global economic cycles, are those that consistently maintain low operating costs. However, they must not compromise on #Safety and Ops integrity to retain or grow customer confidence, presenting a paradox where low cost implies higher risk, and vice versa.
Industry professionals I respect advocate for acquiring new aircraft, arguing that the total ownership cost (a blend of financial and operational costs) is more favorable compared to used aircraft providing advantages in maintenance costs, fuel efficiency, reliability and operational efficiency. This is logical, yet here I propose a shift in mindset: consider that engines certified as 'overhauled' perform as well as new. Similarly, aircraft undergoing C-check operate optimally, thus narrowing the performance gap between new and 'in-service' aircraft.
Applying this low cost-high risk insight to eVTOLs, one might question, "Why design to such sophistication?" when market acceptance is unproven. Over-engineered for safety or uniqueness hinders market entry.
Investing in 'new' demands significant capital, justified only by lower operational costs in a proven market. Negotiations on indirect costs like residual value insurance, taxes, and parts availability are made with informed decisions, while direct costs like ground handling, crew salaries, and advertising have similar impacts on both new and used vehicles.
For eVTOL operators, initial Ops costs are expected to be high, as all expenses will be novel. At the start, operators should focus on cash flow not profits; minimize upfront expenses to avoid heavy recurring financial or maintenance obligations.
I predict eVTOL depreciations might follow a steep curve over three to four years, reaching a residual value of 20%, avg'd 24.6% per year. By analyzing the correlation between aircraft value, age, and economic cycles, a model for asset financing can be adapted for eVTOLs.
Historically, the aviation sector's health mirrors global economic trends, with policies often dictating aircraft replacement every seven to ten years as the high-value period in their lifecycle. Consider why imported cars into tropical Africa come with heaters, or ag-drones have features for sense+avoid when their operational height is restricted. This highlights a tendency towards feature overload in tech transfer.
Reflecting on past mistakes of the #VLJ hub-'n-spoke era, there's a rush towards heavy upfront investments but, if the model is flawed, the consequence will be high OEM turnovers. Understanding these principles is crucial for the sustainable adoption of eVTOL.