Market Introduction

The global advanced air mobility (AAM) market was valued at USD 12 billion in 2024 and grew at a CAGR of 21% from 2025 to 2034. The market is expected to reach USD 80.73 billion by 2034. The increasing urban congestion will drive the growth of the global advanced air mobility (AAM) market.

Advanced Air Mobility (AAM) is an aviation innovation concept that combines new technologies of aircraft, digital infrastructure and regulatory as well as moving people and products safely and sustainably over cities and even in rural areas. This new mobility scenario implies using electric or hybrid-electric vertical take-off and landing (eVTOL) aircraft, unmanned aerial vehicles (UAVs or drones), and other types of increasingly advanced aircraft that may have little or no requirement of runway infrastructure. AAM is supposed to be an addition to the current transportation systems and help decongest them, most especially in heavily populated cities and towns, and enhance access in the remote, or underdeveloped areas. The major parts of AAM are more advanced propulsion systems, batteries, lightweight materials, automated flight control, air traffic management system, and ground structure such as vertiports and charging systems. AAM includes an array of areas of operation including Urban Air Mobility (UAM), that is passenger or cargo transportation to distances of a few kilometres; Regional Air Mobility (RAM), passenger or cargo transportation to longer distances within cities or between cities; and autonomous drone cargo delivery, transport of medical supplies, and emergency rescue services. AAM is on the verge to reinvent air travel by having less environmental impact, fewer noise levels, and enhanced operational flexibility.

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Recent Development

• Nalwa Aero, India's first eVTOL developer, and Urban-Air Port, a world leader in Advanced Air Mobility (AAM) infrastructure, announced a historic agreement to join the Indian market. This is Urban-Air Port's first cooperation with an Indian eVTOL OEM. In line with governmental regulations and the rising demand for air travel, this strategic, long-term partnership seeks to build multimodal, scalable, purpose-built infrastructure to support India's quickly increasing aviation industry. Thanks to this unique partnership, Nalwa Aero is now one of Urban-Air Port's chosen VTOL Partners in India, and Urban-Air Port is now Nalwa Aero's preferred Infrastructure Partner. Through the combination of Urban-Air Port's state-of-the-art vertiport infrastructure and Nalwa Aero's ground-breaking NALWA 5X eVTOL aircraft, the firms will open in-line-of-sight business potential and accelerate the growth of India's AAM ecosystem.

Market Dynamics

Drivers

Technological innovation and increasing investment in the industry – the upsurge in the core technologies like the electric propulsion system, high-density battery, autonomous flight, and lightweight composite materials are one of the key drivers. These developments have enhanced the performance as well as the efficiency and safety of electric vertical take-off and landing (eVTOL) aircraft and unmanned aerial vehicles (UAVs) and has made their commercial application all the more possible. At the same time, new entrants in the industry, including aerospace giants, technology startups, and automotive makers, have been escalating research and development-related operations in the AAM sector owing to strategic collaborations and investment schemes. This investment boom is fast-tracking prototyping, certification trials and launching test flights within city and regional corridors. Reduction in the price of electric aviation technologies, especially batteries and power management system is also augmenting the market’s growth. Such cost effectiveness increases the economic viability of AAM operations particularly in contrast to conventional rotorcraft aircraft.

Restraints

Technological barriers and financial constraints – among the most common limiting factors include the immature state of technologies that will be needed to feed the vessel including high-density batteries, autonomous navigation systems, and electric propulsion technologies among others. Even though they are developed quite fast, lots of those systems remain at the development stages and cannot be used commercially at a large scale straight away. Short range, low transport capability and operation in situations with unfavourable weather negatively affect the practical use of AAM aircraft. Moreover, the development and production of advanced aircraft is expensive, as are the costs of erecting infrastructure to support vertiports and charge stations; both of which are huge financial impediments to competition, particularly among those firms who haven not gained a foothold in the industry yet. The other significant constraint is readiness of supporting infrastructure and systems. The cornerstone aspects such as the real-time air traffic management system customized to work on the low level, standardized charging systems, maintenance facilities are yet to be implemented. The security and consistency matters are also not solved.

Opportunities

Changing urban dynamics – among the most noticeable is the ever-growing congestion in most of the major cities in the world that have necessitated an urgent need of other alternative transport that is faster and more efficient. AAM is the answer because it will allow short-haul flights that would not run on conventional road networks and would hence greatly improve connectivity and travel time. Furthermore, the emergence of e-commerce and the need of providing fast last-mile delivery also increases the rate of implementation of drone-based logistics and cargo transportation, as AAM is appealing to companies with urgent and flexible delivery connection needs. Receptive policy moves and governmental support are equally making a significant impact. Organizations like the Federal Aviation Administration (FAA) and the European Union Aviation Safety Agency (EASA) are currently developing systems to enable AAM to merge with the current airspace framework, and numerous governments are investing in proof-of-concepts, studies, and groundwork. Another significant driver is the increasing focus towards controlling climate change. With the world demanding decarbonization in industries, AAM, through its electric and hybrid-electric planes, provides a clean and easy replacement of traditional transportation methods. In addition, the occurrence of a public health crisis, such as the COVID-19 pandemic, demonstrated the benefits of unmanned aerial vehicles to deliver medical supplies and respond to emergencies and further proved the feasibility of AAM.

Segment Analysis

Regional segmentation analysis

The regions analyzed for the market include North America, Europe, South America, Asia Pacific, the Middle East, and Africa. North America emerged as the most significant global advanced air mobility (AAM) market, with a 40% market revenue share in 2024.

The United States, Canada, and Mexico form the largest global Advanced Air Mobility (AAM) market due to the synergy between technological leadership and supportive regulations and an excellent industry investment. The United States has particularly become the ground zero of AAM innovation, with several startups and larger aerospace companies busy working on electric vertical take-off and landing (eVTOL) aircraft, autonomous drones, and their supporting infrastructure. Joby Aviation, Archer Aviation, Wisk Aero, and Beta technologies are the best firms racing in the world to develop and test the AAM platforms that will be used to execute passengers and cargo transportation. Enhancing this bustling ecosystem is a large amount of venture capital investment and partnerships between the government and the corporate world as well as the cooperation with automotive and technology companies. Regulatory bodies such as the Federal Aviation Administration (FAA) are also becoming active by building the possible future of AAM by creating airworthiness standards, pilot certification requirements, and the plans of integrating urban airspace. Efforts like the NASA Advanced Air Mobility National Campaign are also fast tracking AAM technology development and testing by combining government and industry with academia. What is more, the developed aerospace infrastructure, a skilled workforce, and robust R&D in North America will serve as the stable backgrounds towards AAM growth. The trend of urban congestion in the U.S. great cities as well as the rising awareness about environmental issues is making the cleaner, faster and more efficient forms of transportation highly marketable.

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• The MLT Aikins aviation group provides their clients in every area of the aviation business with strategic solutions and useful insights by utilizing a special blend of extensive legal experience and first-hand aviation knowledge. Our in-house legal experts frequently assist clients in creating all-inclusive solutions for financing, taxation, regulatory compliance, aircraft sales, and dispute settlement. Our team frequently provides strategic advice on a wide range of aviation-related issues to airlines, financial institutions, aircraft lessors, manufacturers, insurers, and regulatory agencies. They assist their clients in navigating the daily complexities of the industry, from partnership agreements and fleet acquisitions to regulatory compliance, restructuring, and employment-related issues.

Vehicle type Segment Analysis

The vehicle type segment is divided into electric vertical take-off and landing (eVTOL) aircraft, fixed-wing aircraft, hybrid aircraft and drones/unmanned aerial vehicles (UAVs). The electric vertical take-off and landing (eVTOL) aircraft segment dominated the market, with a market share of around 40% in 2024. Electric Vertical Take-off and Landing (eVTOL) aircraft have become the most dominant segment of the entire Advanced Air Mobility (AAM) market across the globe because of the versatility, sustainability, and innovative technology. Contrary to other conventional aircraft, eVTOLs will depart, hover, and land vertically and require no runway to operate, even in heavy urban traffic by using so-called vertiports or rooftop pads. They are especially useful as short to mid-range within-urban and between-city transportation, which is a principal point of interest to AAM. This superiority of eVTOLs is also supported by the fact that they utilize electric propulsion thus offering zero emissions during flight and much less noise in comparison with helicopters which is an objective that fits into global sustainability and noise regulations agenda. Increased attention to urban air mobility, air taxis, and carbon emissions-free on-demand ride-sharing flying services has led to an influx of investment in eVTOLs. Companies which are specifically aiming at eVTOL innovation, including the big aerospace firms and the start-ups Joby Aviation, Archer Aviation, Lilium and Vertical Aerospace, have partnerships with automotive companies and technology suppliers. Moreover, eVTOL aircraft are to become increasingly popular in the environment of regulation, with several prototypes that are being tested and undergoing pre-certification in the U.S and Europe. Low costs of maintenance and improved safety in long-term perspectives are implied by their simplified mechanical architecture that involves the reduced number of moving parts compared to more conventional rotorcraft.

Mode of operation Segment Analysis

The mode of operation segment is divided into autonomous, piloted and remotely operated. The autonomous segment dominated the market, with a market share of around 55% in 2024. The leadership of the autonomous mode of operation on the market of the Advanced Air Mobility (AAM) can be attributed to the efficiency, safety, and ease of scaling. They rely on state-of-the-art sensors, artificial intelligence (AI), and real-time data processing to fly without human pilots. It does not only save operation cost through the elimination of the onboard crew but also increases precision, uniformity, and responsiveness in flight operations. These systems are able to autonomously explore a complex urban environment, avoid static obstacles, and operate dynamically in airspace, and as such are ideal candidates to many use cases, including cargo delivery, surveillance, mapping, and emergency response. The desire to have fast and contactless delivery, which became particularly evident in the time of the COVID-19 pandemic, has contributed to the rapid spread of using autonomous drones in the last-mile delivery of goods and in terms of transportation of medical supplies. Some of the world providers of logistics and technology services have invested so much in autonomous aerial systems as a way of enhancing speed, eliminating human error and further reaching their services. There is indication that as the continual advancements in AI and machine learning technologies make their way into autonomous AAM vehicles, they will become the standard of operational model, particularly on cargo and unmanned services, making them the leaders of air mobility solutions in the next generations.

End Use Segment Analysis

The end use segment is divided into passenger transport, cargo delivery, emergency medical services, military & defence and inspection & monitoring. The passenger transport segment dominated the market, with a market share of around 58% in 2024. The passenger transport has now become the leading form of the global Advanced Air Mobility (AAM) market due to the high demand in faster and compact ways of movement within a metropolitan region and inter-city locations. The conventional transport is rapidly becoming obsolete as the population increases and the congestion in the cities as well as inadequate ground infrastructure fails to accommodate the ever-increasing need to travel faster and conveniently. AAM with the help of electric vertical take-off and landing (eVTOL) aircraft provides a transformative solution to short- and medium-haul air transport of passengers without any road traffic and about 90 percent time savings. This can be satisfactorily associated with the vision of urban air mobility (UAM) that envisions on-demand air taxis and reshapes the means of transportation of people within and across cities. Some of the major aerospace and technology firms, including Joby Aviation, Archer Aviation, Lilium, and Volocopter are also highly investing in the passenger AAM of the market, with a significant number of eVTOL prototypes already in the process of flight testing and certification. These commercial opportunities of AAM passenger explain why many different interests including government agencies and individual investors have shown quite serious interest in it. It is also obvious that the further development of batteries, autonomous flight, and the integration of air traffic make such aircraft safer, quieter, and more affordable, which is essential to popularize them. In addition, governments and cities around the world are in a development stage to explore AAM as an instrument to advance urban mobility, minimize carbon emissions and harness sustainable transportation objectives. Passenger transport will continue being the main usage of AAM in the nearest future with its potential to provide low-cost point to point air travel in the congested areas.

Some of the Key Market Players

• Airbus
• Archer Aviation
• Autoflight
• Beta Technologies
• Boeing
• EHang
• Embraer (Eve Air Mobility)
• Joby Aviation
• Lilium
• Vertical Aerospace
• Volocopter
• Wisk Aero

Report Description