Unmanned Airspace‘s latest global UAS traffic management (UTM) market report, published today, forecasts the market for UTM systems and services will be worth USD1.8 billion between 2024 and 2028. This is a considerable drop in the previous forecast of USD2.6 billion, estimated for UTM expenditure between 2023 and 2027.
“There are eight major sources of revenue for UTM service and infrastructure suppliers,” said Philip Butterworth-Hayes, the report’s author, “of which funding from government-backed research agencies is by far the largest (see box – “sources of funding for the UTM industry)”. However, this will start to tail off from 2026. But revenue from supporting commercial BVLOS services and new advanced air mobility passenger services in cities will only start to generate major regular income streams from 2027 or 2028 onwards. For the UTM industry, this is a potentially serious funding black hole.”
Most industry experts are predicting that 2024 will be the first year that drone operators will be able to exploit the commercial potential of beyond visual line of sight (BVLOS) missions, at scale. But many, probably most of these will be in rural locations where UTM systems will not be required. Developing complex eco-system for urban drone operations will take longer, due to the institutional complexities involved with integrating many different stakeholder interests and responsibilities.
Anyway, according to the report analysis, income from operational UTM service provision for more extensive drone operations will be the weakest of all potential revenue generators over the next five years.
“The report highlights the extent to which the UTM and U-space industries have pivoted towards urban and advanced air mobility sectors, away from drones,” said Butterworth-Hayes. “There is considerably more revenue potential in developing airspace integration work with vertiport and urban AAM system developers than supporting long-range drone missions, where the business case for UTM services is not entirely clear.”
“Arguably the most important development for the UTM sector in 2023 was the news in August that the EHang Unmanned Aircraft Cloud System (UACS) had been officially approved by the Civil Aviation Administration of China (CAAC) for trial operations. EHang UACS features functions of management of airspace, flight plans and operators, etc., enabling cluster management of multiple aircraft within the same airspace, according to the company. But it is still unclear whether regulators in Europe and North America will be prepared to see UTM services bundled along with command-and-control and flight operations, as the CAAC has allowed. If they do, then the revenue potential for eco-system-based UTM service provision will be eroded even further.
“The key question for many in the UTM sector is: will governments start to roll-out their national UTM programmes in 2024? So far this year only Lithuania, Norway and Israel have announced nationwide UTM programme launches and there were only two national programmes announced last year. Clearly, many are holding back because of uncertainties over regulations, standards and investment requirements. No wonder so many UTM infrastructure and service provision companies are pivoting towards the eVTOL sector.
“By 2027, if there are no major incidents, the UAM market will start to expand from trial to commercial operations,” said Butterworth-Hayes. “We have identified 35 cities planning to build UAM eco-systems over the next three to five years, of which 25 have yet to specify a UTM service partner. But the urban UTM sector is a highly complex market. Not only are eVTOL OEMs (such as EHang and Eve) developing their own UTM mobile platforms but most vertiport manufacturers have either developed their own approach and departure path airspace design capabilities or linked with UTM service suppliers to provide this service. These different UTM configurations will need to be integrated into the wider eco-system.
“In 2023 the roll-out of networks of sensors on a national scale to track all low-flying aircraft in low level airspace began in earnest, with Germany, Singapore and the UK announcing new programmes in this area.”
| Sources of funding for the UTM industry
Even though the initial stages of the commercialisation of the global UTM market is not expected before early 2024 there are eight current and potential revenue streams for UTM infrastructure and service providers: · Developing a national UTM programme in a commercial contract with a regulator/ANSP · National government and inter-governmental funded research · Prototype UTM service within a defined drone eco-system (eg a port) · Income from operational UTM infrastructure provision · Income from operational UTM service provision · UTM-as-a-service for drone and eVTOL operators/OEMs · UTM partnership in vertiport-focused AAM eco-system · Consultancy and other revenue streams – from defence contracts, private landowners, airports etc. |
| The Unmanned Airspace UTM market report – a unique source of detailed UTM market information
Our latest 463-page edition of The market for UAV Traffic Management Services – 2024-2028, gives the world’s most comprehensive, accurate and validated guide to market forecasts, opportunities and future developments for the global UAS air traffic management (UTM) sector. Readers will be able to access: · Details of plans and progress on UTM programmes in 54 countries · Details of potential new UTM market opportunities in urban air mobility programmes. The report identifies 35 cities/regions planning to develop UAM eco-systems in the next two to five years, requiring UTM services. · Forecast revenue for eight core UTM services: developing a national UTM programme in a commercial contract with a regulator/ANSP; national government and inter-governmental funded research; prototype UTM services within a defined drone eco-system (eg a port); income from operational UTM infrastructure provision; income from operational UTM service provision; UTM-as-a-service for drone and eVTOL operators/OEMs; UTM partnerships in vertiport-focused AAM eco-systems; consultancy and other revenue streams – from defence contracts, private landowners, airports etc. · A comprehensive overview of the results of UTM research and trials in all parts of the world, with an understanding of how these will impact revenue earning potential for UTM companies. · Analysis of high level forecasts for the drone and AAM/UAM industries. We look at top-down forecasts for drone deliveries and expenditure and analyse the drivers for more complex services supported by UTM systems across the world. We take a deep dive into the regulations and standards, identifying where and how these are accelerating UTM deployments or, in many cases, holding them back. The forecast is available for €723/$880/£650 for a single copy of the report or €1,335/$1,638/£1,200 for an updated subscription (the most recent issue of the report available plus two updates over a 12 month period). To find out more about this service – please send an email with your contact details and information request to the editor, Philip Butterworth-Hayes, at philip@unmannedairspace.info |
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