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Exploring economic feasibility for airport shuttle service of urban air mobility (UAM)

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  • Hae Choi, Jong
  • Park, Yonghwa

Abstract

UAM is a new concept of mobility that expands the two-dimensional transportation system to three dimensions using a personal air vehicle (PAV). This study explores the economic feasibility of the UAM airport shuttle service from two perspectives. First, this study estimates the fare of UAM services to attract customers. The UAM service should maintain a competitive price to convert existing transportation users into UAM users. This study used Incheon Airport (ICN) ground transportation data to estimate a competitive fare based on the multinomial logit model. The pricing range at which UAM services can obtain users from Seoul Station to ICN is estimated to be 96 to 108 USD, assuming the new service reduces traveling time by 30–40 min compared to taxi service. The comparison with professional institutions indicates that the 96–108 USD price range is feasible. However, according to a simulation based on the discounted cash flow (DCF) method, other approaches to increase economic feasibility are required. Second, this study reviewed operational policies to improve the economic feasibility of UAM shuttle services from two perspectives. The first is a service perspective that introduces new services or enhances the current service level. The internalization of CNS (communications, navigation, and surveillance) and UTM (unmanned traffic management) services can be a new business area, including premium routing. The second is introducing a dynamic pricing policy. Segmented pricing, time-based pricing, and changing market conditions strategies can practically strengthen the economic feasibility. Operating an airport Vertiport providing a dedicated path for UAM passengers can allow UAM operators to charge more on a premium passenger segment by shortening airport procedure time. Because it can avoid the uncertainty of road congestion, there is plenty of incentive to set higher fares during peak times with severe congestion. In addition, by creating a market environment in which multiple operators participate, the operators can share the burden of infrastructure construction and operation, which account for more than 80% of the total operating costs, increasing the economic feasibility of services.

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  • Hae Choi, Jong & Park, Yonghwa, 2022. "Exploring economic feasibility for airport shuttle service of urban air mobility (UAM)," Transportation Research Part A: Policy and Practice, Elsevier, vol. 162(C), pages 267-281.
    • Handle: RePEc:eee:transa:v:162:y:2022:i:c:p:267-281
    DOI: 10.1016/j.tra.2022.06.004
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