"Yeouido to Incheon Airport in 20 Minutes"… Outlook for the Domestic UAM Market

[Asia Economy Reporter Suyeon Woo] Urban Air Mobility (UAM), which can reach Incheon Airport from Yeouido within 20 minutes, is expected to fly over domestic airspace starting in 2025. UAM, a three-dimensional transportation mode, is anticipated to alleviate the chronic traffic congestion in the metropolitan area by flying over urban airspace.

In June, the government announced plans to introduce the three-dimensional transportation mode UAM domestically from 2025 and to operate unmanned fully autonomous UAMs by 2035. The initial commercial fare for the Yeouido~Incheon Airport route (approximately 40 km) is expected to be around 110,000 KRW, somewhat more expensive than premium taxis. However, once autonomous flight is implemented, fares are expected to drop to about 20,000 KRW per 40 km, making urban air travel cheaper than regular taxis.

Considering the time required to establish domestic UAM safety standards and certification, the earliest commercialization is targeted for 2023, with at least 2025 as the planned launch year. The market is expected to expand significantly around 2030 to 2035. According to investment bank Morgan Stanley, the global UAM ecosystem market, currently valued at only 7 billion USD, is projected to grow at an annual rate exceeding 30%, reaching 1.474 trillion USD by 2040.

Global company Hyundai Motor Group has already presented a blueprint to capture the UAM market and is focusing on developing Personal Air Vehicles (PAVs). The 'Smart Mobility Solution' applied to the future city envisioned by Hyundai is summarized by the concepts of UAM (Urban Air Mobility) - PBV (Purpose Built Vehicle) - Hub (Mobility Transfer Hub).

The plan is to travel within the city by riding a vertical takeoff and landing capable UAM, then transfer at a mobility hub to a shuttle-type PBV for short-distance travel to reach the final destination. In this scenario, UAM is the most critical mobility solution, with priorities on eco-friendliness, low noise, safety, and economic efficiency.

Earlier this year, Hyundai Motor Group unveiled the PAV concept 'S-A1', developed in collaboration with Uber. Hyundai Motor Group is the only global automaker to have formed a strategic partnership with Uber regarding PAVs. Once the basic technology is completed, Hyundai is expected to apply mass production technologies specialized for large-scale manufacturing to secure production leadership. Previously, Hyundai Motor Group Vice Chairman Euisun Chung forecasted that the future portfolio would consist of 50% automobiles, 30% PAVs, and 20% robotics.

Industry experts anticipate that the technologies applied to PAVs, such as motors, batteries, and lightweight materials, overlap significantly with electric vehicle technologies, suggesting strong competitiveness for the Korean automotive industry. Furthermore, from a long-term perspective, producing high value-added UAMs domestically could emerge as a new growth engine for South Korea, a manufacturing powerhouse.

Ko Taebong, Head of Hi Investment & Securities Center, stated, "UAM production represents an unmissable opportunity that could be a 'game changer' for both the domestic automotive and aviation industries." He added, "Given the many overlaps with electric vehicle-based autonomous cars and production processes, Korea's potential is sufficient."