Villacarrillo, Bruchsal The “ATLAS” flight test center in Andalusia: The small white Lilium jet, which with its darkened black windows is reminiscent of an oversized insect, stands on a runway between extensive olive plantations. It’s a quiet morning.
The jet’s 36 rotors start up, it sounds as if someone had started a huge industrial vacuum cleaner. The plane climbs a few meters vertically, jumps forward a little and flies away. Soon all that can be heard from the jet is a whoosh, like a distant highway.
Lilium didn’t show anyone his jet in action for a long time, fans and critics alike had to trust the advertising material. “First of all, we wanted to achieve a certain speed,” says Lilium boss and co-founder Daniel Wiegand. “If we were just floating around here in front of you, you would probably have criticized me: But it has to fly forward,” he says at the demonstration of the jet.
Because for the fast forward flight, the Lilium jet has to turn its engines on the main wing from a vertical position to a horizontal one after take-off. This changes the airflow on the wing and provides lift, like in an airplane. The company first had to test the complex process.
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The words of the 37-year-old Lilium boss Wiegand often sound like defensive speeches. Aviation experts doubted his concept of a plane with 36 engines and sealed rotors. The short seller Iceberg Research even claims that the promised range of 250 kilometers cannot be achieved with the jet.
The Lilium model has so far had 36 engines.
(Photo: IMAGO/Cover Images)
Since Lilium from Oberpfaffenhofen has collected hundreds of millions of euros and is traded on the US tech exchange Nasdaq, the company has been under even more scrutiny.
Hundreds of start-ups around the world are developing new aircraft designs, promising the mobility concept of the future with their air taxis. The management consultancy Roland Berger estimates the market potential up to 2050 at 90 billion US dollars annually.
Competition: Volocopter and Lilium want to change mobility
In Germany, the main focus is on the competing approaches from Lilium from Bavaria and Volocopter from Baden-Württemberg. Volocopter has raised less capital so far, but is now considered a favorite, also because of the loud criticism of Lilium. Volocopter also has the more ambitious schedule and wants to put its air taxis into operation as early as 2024.
The Lilium CEO wants to further reduce the number of engines in the Lilium seven-seater.
(Photo: Lilium)
Volocopter is used to dealing with spectators and has shown its own aircraft at numerous public demonstrations, for example in Singapore. In Bruchsal in Kraichgau, where the company is based, the temperatures are almost Andalusian on this Monday in mid-July.
In the air-conditioned simulator in the Triwo Technopark, it seems as if the schedule could work out: the multicopter called “Vocity” takes off gently, controlled only with a sidestick, the rest is done by the software. The two-seater with its 18 electrically operated rotors could hardly be controlled otherwise.
Preparations: It’s still time to test, test, test
The software also plays a major role at Lilium. “In principle, the pilot steers the aircraft only with intention,” says Lilium co-founder and chief engineer Matthias Meiner at the presentation in Spain. Lilium has carried out almost 30 test flights here in the past few weeks under constant weather conditions by remote control.
Pilot Andreas Pfisterer sits at the edge of the runway on a semi-open trailer with a rather spartan dashboard and two gear levers, between four Lilium engineers, in front of desks and monitors. The Lilium employees speak of the “Ground Control Station”.
Flight taxis are not yet permitted for manned flights. Lilium wants to change that quickly, its jet for seven people including the pilot should come onto the market in 2025.
Schedule: Volocopter wants to be the first to launch in 2024
The competition from Bruchsal wants to be faster. Your two-seater is scheduled to fly at the start of the 2024 Olympic Games in Paris. A digital clock on the wall of the small canteen in Bruchsal counts backwards: the engineers have just over 700 days left.
“We are working on being the first on the market,” says Florian Reuter, CEO of Volocopter. But the plan is also realistic on the part of the European Aviation Safety Agency (EASA). Last year, EASA forecast that the first air taxi pilot projects in the EU could be ready for the market within three to five years.
The Volocopter boss already wants to transport passengers at the Olympic Games in Paris 2024.
(Photo: Volocopter)
Lilium, on the other hand, takes a year longer than originally planned, also to implement some changes. Among other things, the company wants to reduce the high number of 36 engines to at least 30 by 2025. Lilium boss Wiegand says: “We really planned how many hours we had to do which activities before approval, and then we came to this conclusion.” He admits that there is still a risk with the 2025 deadline.
The two German suppliers Volocopter and Lilium are facing the same challenge, as Manfred Hader, senior partner and aviation expert at Roland Berger, explains: “When in doubt, certification takes longer rather than shorter, that’s what experience teaches us.” Especially with a fundamentally new technology . “There may be a need for adjustment, which means additional loops.”
Approval: Experienced managers should convince air traffic control
Lilium boss Wiegand, however, praises the EASA. The authority “defined an aircraft class in a really well structured way, worked out the corresponding operating requirements with the industry, defined a pilot’s license and the means of compliance”, i.e. the necessary evidence. The American counterpart FAA will now probably follow the regulations of the Europeans. “From my point of view, they did an extremely good job.”
For the hot phase of certification, the two rivals prefer to rely on experienced staff. Lilium’s Daniel Wiegand and Volocopter’s Florian Reuter are both stepping down from their senior positions. Former Airbus manager Klaus Roewe will take over the position of CEO at Lilium next week. “Now we’re getting into the phase where we need someone who has already done the industrialization and approval of the plane,” says Wiegand.
>> Read about this: Air taxi start-up Lilium hires new boss from Airbus
Reuter also hands over the management of Volocopter to a former Airbus manager in September: Dirk Hoke should use his experience to help get the approval. Christian Bauer, Volocopter’s Chief Commercial Officer, is confident: “When we started in 2010/11, the risk was 100 percent. I would say today it is still ten percent.”
Business model: Market forecasts have dropped
But even if both companies get approval for their air taxis, the business model must also be viable. Marketing will be the second challenge for the companies and their new bosses. Roland Berger expert Hader says: “Some of the market forecasts that were made a few years ago were at a moon level. I see these estimates being revised down year after year.” There are applications for air fares, such as airport-to-downtown traffic, between-city traffic, and even rescue operations. “But there will be a trench warfare for the market.”
Some of the start-ups have chosen different concepts. Volocopter focuses more on short-haul routes, Lilium wants to connect cities with an operational range of 175 kilometers between which there is no good train connection.
Both air taxi companies want to offer their own connections as well as sell models.
(Photo: Bloomberg)
As a first step, Volocopter wants to use partnerships with the business airline Netjets to transport passengers with chauffeurs through the air – business travelers, commuters and tourists.
Volocopter and Lilium have similar business ideas: They want to operate their own routes, but also want to sell their planes to other providers. Both proudly refer to pre-orders that have already been received. There are 450 at Volocopter, Lilium calls the number 470 – but all of these are non-binding commitments.
Financing: Lilium only has enough money for one year
A third big unknown remains funding. In times of uncertainty due to rising interest rates and the war in Ukraine, investors are particularly critical of business models where the timeline to profitability is long and uncertain.
But the capital requirement is huge. “A certification can quickly cost an eight to nine-digit amount, i.e. up to a billion euros,” says Hader. Anyone who is still in the early stages of certification could face serious problems.
To date, the experts at the Lufthansa Innovation Hub have not seen any significant decline in investments in air taxi companies by venture capitalists. “In the first half of 2022, almost 780 million US dollars were invested in air taxi companies,” says Lennart Dobravsky, head of the TNMT knowledge platform at the Lufthansa Innovation Hub.
That would allow us to expect similar figures for the year as a whole as in the record year 2020 and probably significantly more than the almost billion US dollars in 2021. The situation is worse for listed air taxi companies. They have lost a whopping 49 percent of their stock market value since the beginning of the year – significantly more than the rest of the travel and mobility start-ups, says Dobravsky.
The situation at Lilium is particularly critical. The company started last fall with a share price of ten dollars on the stock exchange, at the turn of the year it was around seven dollars and at the end of July it was well under three dollars. “Publicly listed air taxi companies will not be able to hide behind their visions forever. In the medium term, a path to profitability is being demanded that very few will be able to deliver,” says Dobravsky.
According to Wiegand, Lilium then needs two more rounds of financing to enter the market. Currently, the money is only enough for about a year. Discussions with investors are already underway. Meanwhile, both suppliers are preparing for series production. Volocopter recently took over DG Flugzeugbau, a Bruchsal-based company with experience in building gliders and using carbon fibers. Volocopter hopes that this will provide a quick and, above all, inexpensive solution for series production.
>> Also read: Air taxis and zero-emission drives: This is how aircraft manufacturer Embraer is reinventing itself
The main news from Lilium concerns battery technology. In June, it was possible to validate externally that the partners Customcells and Zenlabs can provide a battery that “both achieves the performance and stores the energy that we need for this 250 km physical range, which we always aimed for when entering the market ‘ Wiegand says.
A look through the darkened windows shows: Lilium’s demonstrator is still flying with a forklift battery, which takes up a large part of the cockpit. A four-minute test flight lowers the charge level to just 66 percent.
Last but not least, the battery technology will decide whether the air taxi companies really take off or whether their visions are too far ahead of the times and the technology.
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