Consultant Insight: Startups pique interest in electric aviation solutions

Aviation startups are emerging to further the long-needed transformation as the airfreight industry continues to embrace changes brought by online booking platforms from WebCargo, Cargo.one and others. Among the changes are those surrounding sustainability and last-mile speed. Aviation is responsible for about 12% of all carbon dioxide (CO2) emissions from transport sources and 2% of all human-induced CO2 emissions, according to the Air Transport Action Group (ATAG). [caption id="attachment_69752" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] While we have seen a growing interest in electric trucks and last-mile delivery vehicles for years, we are finally seeing the same interest emerge from the airline industry. By 2035, the aviation industry will be 25% hybrid or fully electric, according to estimates by UBS bank. And by 2040, the value of the “electric air taxi market” will have reached $1.5 trillion, Morgan Stanley estimates. Half of all global flights are shorter than 500 miles, according to online publication Quartz . For airlines, the rise of electric and hybrid aviation opens the possibility of new routes currently covered by car, truck and train. This emerging market sector is already garnering support from industry heavyweights. Earlier this week, United Airlines announced an investment in Archer, an electric plane startup that makes a plane capable of vertical takeoffs and landings and carrying as many as four passengers up to 60 miles. In addition to United's investment, the airline placed a $1 billion order for 200 Archer aircraft, with options for an additional 100. "By working with Archer, United is showing the aviation industry that now is the time to embrace cleaner, more efficient modes of transportation," United CEO Scott Kirby said in a statement. There are still a few questions surrounding opportunities for this market, including questions around pricing, government regulations and, most crucially for our industry, what “electric air taxis” could mean for cargo transport. As e-commerce grows as a percentage of total U.S. retail sales, the demand for faster, sustainable last-mile delivery options are increasing. Startups Airflow.aero and Metro Hop are hoping to address this concern by focusing on electric planes in supply chains’ middle mile. Airflow.aero is looking to provide electric cargo airplanes to move goods in payloads of up to 500 pounds into cities from regional distribution centers. Among the benefits of this model are the ability to expand same-day and next-day delivery service to more areas, lower inventory carrying costs by consolidation at the regional level and save 632,000 pounds of CO2 per aircraft annually over today’s methods. Metro Hop, meanwhile, is focused on utilizing electric cargo planes from warehouses to last-mile-delivery vans. Among the benefits, according to the company, are reduced congestion on highways and interstates and faster last-mile delivery times. For example, Metro Hop suggests that, under its operating model, one could place an order in the morning and receive it that afternoon, with delivery costing potentially half of the current overnight solutions. However, concerns about pricing at scale and government regulations will apply to both electric cargo planes and passenger planes. As such, once regulations are in place — which could take several years — shippers will need to run cost and time comparisons between electric planes and electric trucks to determine the best fit for their supply chains.

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