The document discusses advanced air mobility and whether it represents hype or a game changer. It notes that the industry experienced strong growth and funding from 2012 to 2021 but has since seen valuations plummet and funding decline sharply. This represents a typical hype cycle as the industry now separates promising projects from those that are less viable. For advanced air mobility to truly succeed, more funding is needed to focus on certification and overcoming technical challenges, while ensuring sustainability, customer experience, and use cases that can significantly reduce airline emissions like regional air mobility. Visionaries who can advance their technologies during this challenging period have the potential to emerge successfully on the other side.

1. 1
Kolin Schunck
Sr. Manager Strategic Innovation & Intelligence
Future & Sustainable Aviation
10.05.2023
ADVANCED AIR MOBILITY:
HYPE OR GAMECHANGER?

2. 2
The world is about
two groups:
Doubters who reject
innovation and
Visionaries proving
doubters wrong

3. 3
Doubters believed:
“Heavier than air
flying machines are
impossible”

4. 4
Visionaries
Didn’t Listen!
With the Wright
Brother’s proving
doubters wrong

5. 5
Nor have Visionaries in
aviation stopped to
shift boundaries:
They showcased the
possibility of traveling
faster than the
speed of sound

6. Are we entering the
next transformative
era in aviation with…
Advanced Air
Mobility?

7. 7
Advanced Air Mobility projects experience strong growth
Note: Only including developments with first flights after 2010 and major electric
concepts; excluding UAVs and purely recreational developments
Source: Roland Berger, Lufthansa Innovation Hub
Known electric and hydrogen-propelled aircraft developments by announcement date [cumulative #]
[All-electric propulsion, hybrid-electric propulsion, hybrid propulsion]
2012
Pre-2009 2013 2015
2009 2010 2011 2014 2016 2017 2018 2019 2020 2021 2022
~395
10x

8. … a Funding-Craze
Sweeping Markets …
Boeing bets on air taxis with
$450m Wisk funding Delta Airlines will invest up to
$200 million in Joby
Aviation to create a ‘home-to-
airport’ air taxi service
Stellantis to build Archer eVTOL
aircraft with $150M strategic
investment
Lilium announces successful
closing of $119 million
capital raise to fund continued
development of new electric
aircraft
Heart Aerospace raises $40
million in funding incl. United
Airlines as investor
Selection Only

9. 9
…with an industry
experiencing…
golden times and
high level of
attention

10. 10
The leading 10 Advanced Air Mobility companies have secured aircraft orders from
various industry players, amassing an estimated order book value of $23 billion
Note: Data as of December 31, 2022; some firms not represented due to different business model
approach. For example: Joby Aviation; assumption for order book value: $2.5M per aircraft
Source: Press Research, Lufthansa Innovation Hub
640
432
432
410
330
300
2,770
15,619
1,312
1,400
Archer
Eviation
Beta
Regent
Lilium
Heart
1,200
Ehang
Vertical
EVE
Total orders
Electra
Top 10 advanced air mobility companies
by disclosed # of order book receipts
35%
13%
16%
16%
17%
1%
Share of orders [in %] by type of customer
Airlines
Cargo
Corporates
Charter/Leasing
Government
Undisclosed
$ Billion
Order Book Value*
mostly LoIs/Options
23

11. 11
Source: Press Research, Lufthansa Innovation Hub
A sophisticated
partnership network
has emerged among
diverse stakeholders
within the AAM
industry
Partnerships in the Advanced
Air Mobility ecosystem
[Selection]
Aviation Players Automotive Players
Aerospace & Defence
Players
Startups

12. …until realism by many
market participants
kicked in…
causing funding
numbers to
plummet and
valuations to
nosedive

13. 13
Venture capital investments in AAM startups hit their peak in 2021 and have since been on a
downward trajectory, with 2023 projections anticipated to reach a new low not seen since 2020
Note: all investment announcements considered as of May 09, 2023; projection 2023: $1.5 to $2B,
decline of 44% to 58% vs. 2022 (reference: overall VC funding declined 42% in Q1 2023 compared to Q1 2022
Source: Pitchbook, Inc., Lufthansa Innovation Hub
6 28 56 192 362 455 635 648 580
7 5
10 10
24
35
48
65
77
101
83
121
90
25
2022
2021
2020
2017
2016 2019
2015
1,002
2014 2018
1,719
2013
2012
2011
3,515
7,772
2010 2023
10
Investment activity in Advanced Air Mobility & Electric Aviation
[Disclosed funding ($M), deals (#)]

14. 14
Shareholders of publicly traded AAM companies unloaded their shares, resulting in an
almost 85% plunge in the aggregated AAM stock prices since their initial public offering
Note: Stock market performance, with new SPACs (incl. those that have announced their intent to list) are
incl. the day after their target announcement to exclude the "first-day-po"-effect; data as of 30 April, 2023
Source: Roland Berger (adapted), Yahoo Finance, Lufthansa Innovation Hub
AAM SPAC Stock Returns
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
Time of IPO Announcement via SPAC Time of IPO
Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
Archer Aviation
Jan. Feb. Mar.
Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan.
2022
2021 2023
Joby
Aviation
Lilium
Vertical
Aerospace
Lilium
Archer
Aviation
Vertical Aerospace
EVE
Air Mobility
EVE Air Mobility
Joby
Aviation
-85%

15. 15
As valuations experience a meltdown, more than $21 billion has been wiped out over
the past 24 months
Note: includes publicly-listed AAM players only; 2023: 1st Quarter
Source: Yahoo Finance, Lufthansa Innovation Hub
Total Public Air Taxi Players
USD 27.92 bn
1st half 2021
Total Public Air Taxi Players
USD 9.98 bn
1st half 2022
Total Public Air Taxi Players
USD 6.37 bn
1st half 2023
USD 10.09 bn
USD 6.79 bn
USD
4.43 bn
USD
4.41 bn
USD
2.20 bn
Market
Capitalization
USD 29.64 bn
Market
Capitalization
USD 23.80 bn
Market
Capitalization
USD 24.83 bn
USD 3.30 bn
USD
0.60 bn
USD
1.20 bn
USD
0.90 bn
USD
1.50 bn
USD
2.63 bn
USD
0.53 bn
USD
0.23 bn
USD
0.64 bn
USD
0.42 bn
USD 1.92 bn
USD 2.48 bn

16. …resulting in a shift
towards realism and the
subsequent downturn
Hype?

17. 17
No, we are experiencing a typical hype cycle that is now separating the wheat from the chaff
Note: Electric aviation are aircraft with a mission >500km and pax capacity >19
Source: Roland Berger (adapted), Pitchbook, Inc., Lufthansa Innovation Hub
EXPECTATIONS
TIME
Technology
Trigger
Peak of Inflated
Expectations
Trough of
Disillusionment
Slope of
Enlightment
Plateau of
Productivity
Advanced
Air Mobility
Production
Prototypes Testing in real life Certification Operations
1st Gen
Operations
Next Gen
Demonstrator
Digital
Infrastructure
Physical
Infrastructure
Mobility
Integration
Aircraft
vehicle
Mass
Market
Niche
Market
Services
Aircraft
vehicle
Electric
Aviation
Collapse

18. Now Is The Moment to
Roll Up Our Sleeves And
Make Progress

19. The Sustainability
Promise
The Investment
Requirements
The Great User
Experience
In addition to addressing the technical challenges,
other aspects must not be overlooked
Invest
Green
Customer
1
2
3
Technical
∞
Certification
Top priority above all; not
in scope in the following

20. 20
Billions of dollars have already shaped a new industry, but as we face a decline, even
more funding is necessary to truly prosper by focusing on the most promising projects
Note: all investment announcements considered as of May 09, 2023; projection 2023: $1.5 to $2B,
decline of 44% to 58% vs. 2022 (reference: overall VC funding declined 42% in Q1 2023 compared to Q1 2022
Source: Pitchbook, Inc., Lufthansa Innovation Hub
6 28 56 192 362 455 635 648 580
7 5
10 10
24
35
48
65
77
101
83
121
90
25
2022
2021
2020
2017
2016 2019
2015
1,002
2014 2018
1,719
2013
2012
2011
3,515
7,772
2010 2023
10
Investment activity in Advanced Air Mobility & Electric Aviation
[Disclosed funding ($M), deals (#)]

21. 21
Most investments have gone into the electric aircraft - other building blocks have been
heavily underfunded, with the question remaining unanswered: Who should fund it?
Share of VC Investments by Sub-Segment [as %]
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2018 2022
2020
2019 2021
2016
2015 2023
2017
Digital Infrastructure Physical Infrastructure AAM Aircraft
Air Mobility Services
Note: all investment announcements considered as of May 09, 2023
Source: Pitchbook, Inc., Lufthansa Innovation Hub

22. 22
If sustainability is of
paramount importance,
then …
we need to focus on
use cases that bolster
the decarbonization
efforts of airlines, with
RAM offering the
most significant
leverage
Only minor impact on the decarbonization balance sheet of
an average operating airline
31%
44%
21%
20%
23%
6%
52%
80%
40%
60%
100%
20%
0%
Departing flights CO2 emissions
4%
0-500km 500-1,500km 1,500-4,000km >4,000km
Note: UAM: <100km and 2-4 Pax; RAM 1.0: <300km and 4-8 Pax;
RAM 2.0: >300km and <19 Pax; RAM 3.0: >500km and >19 Pax
Source: IATA, Lufthansa Innovation Hub

23. 23
To improve the AAM customer experience, we must streamline airport shuttle services
that offer limited time savings while substantially adding to the traveler's inconvenience
Note: The train alternative would lead to 8 changes and take 55-65 min.; for European/Asian
regions that may look different due to advanced high-speed rail network
Source: Google Maps, Archer Aviation, Lufthansa Innovation Hub
Illustrative case for an Airport Shuttle trip from Union Square (New York City)
to EWR Int’l Airport using an AAM aircraft vs. ground mobility
Alternative
Origin
First-mile
(ground)
Last-mile
(ground)
Departure Parking
≅ 5 min. ≅ 35 – 60 min.
≅ 5 min.
≅ 5 min.
≅ 50 –
75 min.
Drive
≅ 2
Changes
Destination
Airport
Shuttle
Origin
First-mile (ground) Last-mile (ground)
AAM aircraft flight
Vertiport Departure
≅ 15 min.
≅ 5 min.
≅ 10 min.
≅ 5 min.
≅ 15 min.
≅ 50
min.
≅ 4
Changes
Security Destination
Simplified Depiction

24. 24
Regional Air Mobility presents a significant time benefit but also creates extra inconvenience
for travelers; thus, improving this aspect is essential for a better overall experience
Note: The train alternative would lead to 6 changes and take 3 hr 46 min.; for European/Asian
regions that may look different due to advanced high-speed rail network
Source: Google Maps, Archer Aviation Lufthansa Innovation Hub
Illustrative case for an Inter City trip from Union Square (New York City) to
Downtown Washington D.C. using an AAM aircraft vs. ground mobility
Inter City
Origin
First-mile (ground) Last-mile (ground)
AAM aircraft flight
Vertiport Departure
≅ 15 min.
≅ 10 min.
≅ 90 min.
≅ 10 min.
≅ 10 min.
≅ 2 hr
15 min.
Arrival
Shuttle ≅ 6
Changes
Destination
Alternative
Origin
First-mile
(ground)
Last-mile
(ground)
Departure Parking
≅ 5 min. ≅ 4 hr 5 min.
≅ 5 min.
≅ 5 min.
≅ 4 hr
20 min.
Drive
≅ 2
Changes
Destination
Simplified Depiction

25. Conclusion With A Twist

26. 26
We are experiencing a
typical hype cycle
…and entering a bear
market as witnessed
in many other
industries before

27. 27
History has shown us similar patterns in industries, with Amazon, now one of the most successful
tech companies, having experienced hype, followed by a bear market landing and bull market surge
Note: Similar patterns can be seen with the blockchain technology and other
Source: Macrotrends, Lufthansa Innovation Hub
Historical Stock Price [in USD]
[Timeframe: 1997 until 2010]
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
16.05.97 16.05.98 16.05.99 16.05.00 16.05.01 16.05.02 16.05.03 16.05.04 16.05.05 16.05.06 16.05.07 16.05.08 16.05.09 16.05.10
Dot.com Bubble 7 Years for Recovery
believed in their vision and used the time to advance their technology and
products, becoming one of the most successful firms today
-94.13%
0
10
9
8
7
6
5
4
3
2
1

28. 28
History has demonstrated
that these challenging
times provide
opportunities by …
... letting go of ideas
that do not function
and support those
that are truly
innovative,…

29. 29
with Visionaries who
use the time now, …
to progress their
technology, product,
and work on eliminating
the obstacles amid
challenging times…

30. 30
possessing the potential
for rebirth and growth
…like a phoenix rising
from the ashes

31. To become the next
Amazon-like success
in aviation!
The hype has
subsided; now,
resilience and focus
are crucial for
becoming a true
game-changer

32. 🫵 Ask Me Anything!

33. 33
Kolin Schunck
Sr. Manager Strategic Innovation & Intelligence
Future & Sustainable Aviation
Lufthansa Innovation Hub
Tel.: +49 160 979 298 17
Kolin.Schunck@lh-innovationhub.com
Connect on
Previous Experience
Your
Contact
Previous Education

34. 34
Thank you!
Kolin Schunck
Sr. Manager Strategic Innovation & Intelligence
kolin.schunck@lh-innovationhub.com
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