- UAM needs to meet healthy demand and supply requirements for a viable market
- Important economical parameters to look at in companies - Revenue/seat mile, cost/seat mile. A lot of assumptions on network structure, operational profile, and vehicle productivity are made here
- Cost is a function of labour, energy, land & navigation taxes, flying material depreciation, cleaning, passenger services, maintenance, advertising, and the sales channels used
- Operators seek to maximize the difference between price and unit costs (higher price and lower costs)
- UAM implementation costs will be high because autonomous operations will happen later and passenger rights will apply to first and last-mile users
- UAM implementation prices will be reduced because exclusivity contracts between vehicle manufacturer, vehicle operators, and vertiport infrastructure access will be contested. Also, price premiums due to hub dominance will be under scrutiny
- In massification (regular scheduling of services based on predetermined routes and vehicles are shared with unknown passengers, like share taxis), lower prices → higher asset usage → higher absolute costs → lower unit costs
- In on-demand services, it’s the opposite of massification
- Higher prices charged lead to higher costs - Network size, service frequency, land and onboard amenities are all increased with higher price and they require higher costs
- Cost structure refers to the absolute and relative values of fixed and variable costs. UAM firms decide cost structure although it’s subject to economical regulations in the future
Neither massification, nor on-demand business models are intrinsically superior (in terms of profitability). While prices in the massification business model tend to be higher, so are costs. The difference between price and unit cost thus cannot be ignored. False