Mixed Signals from Public and Private Sectors at AUVSI New England Summit
The Advanced Air Mobility (AAM) industry faces a funding shift as venture investment declines but public interest rises. At the AUVSI New England UAS and AAM Summit in Cambridge, Massachusetts, experts gathered to discuss the state of AAM funding. With a conference theme of “If We Build It, Will They Come?”, the panel explored why private investors hesitate and how public funds may play a crucial role in supporting AAM infrastructure and operations. The conversation offered a grounded perspective on the future of AAM, highlighting both the challenges and the opportunities that lie ahead in achieving widespread adoption and integration.
The Funding Landscape: Private Sector Caution, Public Sector Interest
Moderated by Dr. Kerry Buckley from MITRE, the panel included industry leaders discussing a notable shift. After a nearly 50% drop in venture funding from 2022 to 2023, venture capital in AAM has continued to decline in 2024. In contrast, government interest and investment have accelerated globally, including in the U.S., where states are beginning to test pilot programs.
This shift creates an apparent contradiction in signals. Jim Graham, Senior VP at Delta Connection and CEO of Endeavor Air, spoke to the challenge of integrating AAM into established aviation systems. “We need to meet the same reliability and safety standards as main airlines,” Graham emphasized, adding that for AAM to succeed, it must operate in all weather and handle steady passenger flow, like today’s airlines. He noted that while AAM can enable new travel routes, achieving full reliability remains a significant hurdle.
Different Visions for AAM: Public Needs and Commercial Goals
The diversity of AAM’s potential applications complicates the investment landscape. Jeff Breunig, a Senior Manager at MITRE’s UAS and AAM sector, noted that each state may pursue different use cases, from commercial to public services like medical transport in remote areas. “If you’ve seen one state, you’ve seen one state,” Breunig remarked, highlighting the broad spectrum of AAM’s potential applications across the U.S. He also acknowledged that the industry’s viability depends on meeting local demands and ensuring that service delivery matches public needs.
For investors like Stacy Swider of Mass Ventures, the appeal of AAM lies in its potential to address mobility needs while balancing risk and reward. Swider advised companies to “bite off one thing at a time” and aim to establish a steady revenue stream before expanding. “You need protectable IP, a competitive edge, and a solid team,” she noted, underscoring the importance of sustainability in AAM ventures. As Swider pointed out, AAM’s primary competition isn’t other AAM companies but established travel options like cars and trains, which offer high reliability and affordability.
Infrastructure and Operational Challenges
Graham and Breunig agreed that AAM must offer a seamless user experience to succeed commercially, requiring dependable infrastructure. Graham noted the need to establish cost-effective routes with consistent service, which means “flying all day long, back and forth.” He highlighted the importance of keeping operating costs manageable and integrating AAM within existing air travel hubs, a complex task given the current congestion at major airports.
Swider added that AAM’s infrastructure challenges extend to building viable vertiports and training a workforce that can sustain high-tech operations. She questioned whether certain locations could support charging stations and fire safety measures for electric AAM vehicles, adding that clear public acceptance will be necessary. Swider suggested that companies could explore traditional engines as an entry point before transitioning to electric—a simpler, potentially profitable path while the technology matures.
Breunig raised an audience question about AAM’s potential to address the transportation gaps in rural areas. For communities that can’t support 50-seat aircraft, AAM may provide much-needed connectivity, he noted, though this will require strong partnerships with state and federal governments. Swider echoed the importance of these collaborations, noting that some small communities could benefit from public-private partnerships to help bridge the “white space” of unmet demand.
A Path Forward: Public Funding and Long-Term Viability
The panel concluded that while AAM holds great promise, it will likely take time and continued public investment to achieve commercial viability. Current technology limits must be addressed for AAM to become a mainstream travel option.
The industry’s future may depend on partnerships between governments and private entities to build the necessary infrastructure and support early operations. With state and federal funding, AAM may one day reach the scale needed to become a viable transportation alternative in the U.S. However, until companies can deliver the reliability and affordability required, the question remains: if we build it, will they come?
Read more:
Want DRONELIFE news delivered to your inbox every weekday? Sign up here.
Miriam McNabb is the Editor-in-Chief of DRONELIFE and CEO of JobForDrones, a professional drone services marketplace, and a fascinated observer of the emerging drone industry and the regulatory environment for drones. Miriam has penned over 3,000 articles focused on the commercial drone space and is an international speaker and recognized figure in the industry. Miriam has a degree from the University of Chicago and over 20 years of experience in high tech sales and marketing for new technologies.
For drone industry consulting or writing, Email Miriam.
TWITTER:@spaldingbarker
Subscribe to DroneLife here.
