3 key commercial hurdles to launching electric aviation in Europe

3 key commercial hurdles to launching electric aviation in Europe
Jun 25, 2021

Realizing the vision of electric aviation in Europe will take hard work, coordination, and cooperation.

Suddenly we are all aware of electric aviation. Europe is taking a leading role in sustainable aviation, powered by electric aircraft (“EA”). Startups are launching radical designs for new electric vertical takeoff and landing (“eVTOL”) aircraft. A new era of flight is unfolding, transforming the way we travel, spurred by electric aircraft that provide better operating economics—all within this decade. That is the vision. However, to make the vision a reality in Europe is going to take hard work, coordination, and cooperation.

New aircraft technology, both fixed wing and tilt rotor, is relatively close. Multiple original equipment manufacturers (OEMs) have built prototypes and are currently in flight. Other OEMs will be following with a wide range of aviation solutions that have adoption potential. While battery technology is still the limiting factor regarding what is possible, current generation lithium-ion batteries are powerful enough to support short-haul aviation (500 miles or less) and will be the basis of launching the first generation of EAs. This first wave could prove crucial to domestic European aviation at a time when countries, such as France, are looking to impose flight restrictions on short-haul routes in favor of less carbon intensive alternatives.

But proving aircraft technology is only the first step in launching EAs. And how quickly EA move from prototype to market reality will be defined by what we, as industry stakeholders, do to support this effort. Already there is a groundswell of ideas, policy definition, and regulatory revision underway. But to make the vision a reality in Europe, there are three key commercial hurdles to tackle: (1) aircraft certification, (2) ground infrastructure, and (3) equipment purchase incentives.

European aircraft certification

The European Aviation Safety Agency (EASA) is responsible for aviation regulation and certification for European Union member states and countries in the European Free Trade Association (EFTA). Following the UK’s withdrawal from the European Union, the UK is no longer a participant of EASA and the UK’s Civil Aviation Authority (CAA) holds responsibility for aviation regulations in the UK. The CAA has created a Regulation Sandbox that partners with stakeholders to test new concepts, including electric aircraft, not covered by existing regulation.

The impetus for more sustainable aviation is strong, with an industry-wide plan to achieve net-zero CO2 emissions by 2050. Existing certification and regulations requirements were written for aircraft of a different generation era and technology, and as the emerging electric aviation sector sees continued development, regulators are working to adapt requirements for the electrically powered aircraft.

EASA publishes Special Conditions (SC) if existing regulations do not include suitable safety standards for a product. In April 2021, SC E-19 was published to support the certification of electric or hybrid propulsion systems. Given the lower energy density of current battery technology compared to conventional aviation fuels, that can be a limiting factor on the range of electric aircraft compared to existing aircraft. To increase the range of electric aircraft, some OEMs are conceptualizing hybrid propulsion systems. This SC aims to account for the broad range of propulsion systems being developed. For the certification of vertical takeoff and landing (VTOL) aircraft, EASA published SC-VTOL-01 in 2019, which covers certification of VTOLs of up to nine passengers and maximum takeoff mass of 3,175kg, and there is some alignment to existing CS-23 and CS-27 standards. This was followed up in May 2021 with the publication of MOC SC-VTOL, providing guidance on certification compliance. EASA has made encouraging strides for the certification of electric aircraft, and in June 2020, awarded the world’s first type certification for an electric aircraft, a process that took less than three years to complete.

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We call for a pooled certification funding concept from multiple OEMs to address common operating control challenges.

To maintain this unprecedented pace of EA certification, governments and the private sector must jointly increase the level of funding to EASA and the CAA. This new transportation revolution needs public and private collaboration to happen at an unprecedented scale. Performance test data must be streamed from the OEMs with coordinated involvement of regulator and individual OEM test teams. But there are also common elements of new aircraft and ATC technology that must be proved out across the industry. In the UK, for example, the CAA Regulation Sandbox was developed to ensure regulators work closely with other stakeholders from the onset. We need more innovative thinking and funding approaches to continue to build on this early success—enabling innovation and speed-to-market while also ensuring rigorous certification standards.

Besides EASA, other regulators are also developing regulations for electric aircraft. The FAA, for example, is working to update Part 135 regulations for VTOL aircraft. China is also making moves in parallel—the Civil Aviation Administration of China (CAAC) is actively working on the certification of VTOL aircraft. In addition to regulators working with stakeholders in their jurisdiction, it would be prudent for regulators to facilitate multi-lateral collaboration on the certification of this novel technology.

Key takeaway: Achieving timely certification of electric aircraft will require:

  1. Expedited access to OEM test data
  2. Standardized certification development guidance, based on work conducted with initial EA prototypes
  3. Increased certification funding and resources, to be paid for by a joint OEM contributed pool
  4. Bilateral agreements (e.g. FAA/EASA/CAAC tec) that encourage greater collaboration with other regulators

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Ground charging infrastructure

Unlike petroleum-based aviation, electric aviation will require completely new ground infrastructure to be installed at airports. Electric aviation replaces the traditional economics of fixed based operators and airports fueling aircraft with new economics and return on investment. For a substantial period, electric aviation, sustainable aviation fuels (SAF), and even hydrogen-based aviation fuels will be operating side-by-side and must be addressed by the market to achieve decarbonized objectives.

If we are to get electric aviation in the air, the ground charging infrastructure must be in place at airports and non-airport locations in advance of the routes being flown. So building a ground charging network is a must—yet the payback for this advanced investment is uncertain. The level of activity during the demonstration or proving out phase of EAs will be relatively low. Further, advances in battery technology and fast charging stations may well make the initial investment obsolete shortly after installed. There is additional uncertainty arising from whether investments should be focused on fast charging infrastructure, or whether battery swap storage is a more practical near-term investment, yet these investments, and airfield reconfigurations, must be made in advance to launch this industry.

Smaller regional airfields are likely to become testbed locations for EA, which makes sense from safety and demand perspectives due to lower density air traffic and population areas. But even before the pandemic, these airports typically lacked the financial resources to make investments that are unlikely to provide a near-term return, meaning without government subsidiaries or support from the OEMs, investment in this space is likely to fall short.

The same rationale and level of support needed to develop EVs and solar must be applied to electric aviation to incentivize growth and continued development.

This has been a similar challenge for solar and for development of an electric vehicle (EV) charging network. Governments at the European and national level extended a combination of grants, loan guarantees, subsidies, and other incentive support to these technologies.

Key takeaway: Financial support and investment in ground charging infrastructure from OEMs and governments for first-mover airports is vital to realize the vision of electric aviation in Europe.

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Operator incentives

A final hurdle to the launch of electric aviation is creating profitable operator business models. Being able to fly an EA is one thing. Being able to operate it profitably in competition to existing petroleum-based aviation is another. OEMs must convince operators that EAs are commercially reliable and financially attractive. While direct operating costs for EA will be significantly less to operators—factoring in fuel, maintenance, and no expected payments to the EU Emissions Trading Scheme (ETS) due to zero operating emissions—ownership costs of new technology aircraft, particularly for launch airlines, will be daunting. Manufacturing the first-generation aircraft will be costly, and until EAs can be produced at significant scale, the price per copy may well be economically nonviable.

Assuming that early EA adopters will face additional startup costs to prove the operational concept, operating out of prime airports may not be viable when adding on expensive landing fees. If airport operators genuinely want to push forward the green aviation agenda, waiving these fees would be a step in the right direction. London Heathrow Airport has taken this approach and announced that the first electric-hybrid aircraft to operate regular services at the airport will not pay landing fees for the first year.

The European Commission’s Green Deal clearly sets out the aim to have no net emissions of greenhouse gases by 2050, while also identifying aviation as one of the fastest-growing sources of greenhouse gas emissions. To mitigate this, the commission and other parties have introduced various emissions taxes such as the ETS. Given EA will be zero emissions in operations, it should be exempt from the EU ETS. However, countries such as the UK have introduced Air Passenger Duty (APD), which is paid per passenger for aircraft of 5.7 tons or greater. To incentivize EA, early adopters may be exempt for a limited period. Even still, these exemptions may not be sufficient to level the initial playing field and further incentives from the EC and regional governments may be required to support takeoff.

Obsolescence is also a major risk for launch airlines. Commercial aircraft traditionally have had very long lives, with only incremental changes in technology over 20-30 years. Electric aviation is in its infancy—with major leaps in technology and functionality anticipated. The ownership risk in adoption of this technology is very real, and the public sector needs to address it.

Key takeaway: The EU and UK have committed to reducing CO2 emissions and electric aircraft are a vital component to achieve this for the aviation sector. First movers will take on greater risk as the sector continues to develop at a fast pace, and therefore should receive incentives to account for this risk. This will also align with first-mover incentives provided to other decarbonizing technologies (e.g., solar, wind power, EVs).

The public and private sectors must join forces to address each of these areas. By marrying the creativity of the private sector with the long-term perspective and decarbonization goals of the public sector, we can achieve something truly revolutionary in flight transportation.

Meet the authors
  1. Eliot Lees, Vice President and Managing Director, Clean Transportation

    Eliot specializes in aviation due diligence, valuation, business planning, and infrastructure-related development. View bio

  2. Nishaan Rama, Manager, Aviation

    Nishaan is an experienced management consultant, advising clients on commercial due diligence, business planning, market strategy, and demand forecasting. View bio