Cyrus Sigari is betting on another aviation revolution

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Cyrus Sigari, Co-Founder JetAVIVA:

"This segment isn’t going away.  Too many smart people are working on the problem set, and capital markets are frothing at the mouth for an opportunity to help launch the future of airborne human transport."

Cyrus Sigari has already been through one much-hyped aviation revolution – the birth of very light jets. After graduating in aeronautical engineering, he joined Eclipse Aviation in 2003 as propulsion systems engineer to work on the initial development of the Eclipse 500. He then moved into sales selling 50 Eclipse 500s in one year.

Sigari then co-founded jetAVIVA, now one of the largest brokerages of pre-owned aircraft, particularly of smaller jets.  Sigari’s co-founder, Ben Marcus, also co-founded Airmap, the world’s leading airspace-management platform for drones.  The two of them are no strangers to rapidly advancing technologies and aviation.

JetAVIVA has grown fast – partly through acquiring other brokerages,  but for the past 18 months, Sigari has also been closely watching another aviation revolution: electronic vertical take-off and landing (eVTOL) aircraft.

Q. JetAVIVA had a record year in 2017, why are you looking at eVTOLs?

As CEO, my job is to not just look one year ahead, but five to 10 years ahead as well.  In the age of exponential technologies, one year in today’s terms is the equivalent of five years of innovation 20 years ago. Things are changing -- fast. 

eVTOL represents the first exponential technology wave to hit aviation since the advent of the jet engine in the early 1940s.  With the convergence of electric-distributed propulsion, advanced control systems, the sharing economy and the heft of some of the world’s largest corporations (i.e. Boeing, Airbus, Uber, etc.), eVTOL is bound to give aviation a pathway to impact an order of magnitude of people on earth as compared to the status quo. 

This segment isn’t going away.  Too many smart people are working on the problem set, and capital markets are frothing at the mouth for an opportunity to help launch the future of airborne human transport.

Q. Was the very-light jet market over-hyped or a victim of the great financial crisis?

It depends on what one considers hype versus the actualisation of something big.  In my opinion, the VLJ craze caused a significant number of new entrants and technologies to be developed.  Since 2007, when the first VLJs began delivery, close to 1,600 jets have been delivered to include the Eclipse, Mustang, Phenom 100, SF50, HondaJet, and Phenom 300.  I include the Phenom 300 in the math as I don’t believe we would have seen the Phenom 300 from Embraer had we not concurrently seen the Phenom 100. 

While the numbers are well below what some had hoped for the segment, 1,600 jets are still a lot of planes! 

The ongoing economic and operational impact of these fantastic machines is serious business.  While the GFC definitely slowed this whole thing down, I do think expectations were far too high based off of the myriad of challenges any/all manufactures were facing: funding, certification, training, production limitations capability, market size etc.  In the end, the ironic outcome of all of this is that it was the consumer who benefited the most, as pricing from the OEMs was predicated on a much-higher throughput than what was actualised thus far (with the exception of the SF50).

Q. Do you see similarities with the VLJ hype of 2005 and eVTOLs now?

100%.  It’s almost identical except - this seems a lot more likely and way bigger as a totally opportunity segment.  If you look at Uber’s math on the market possibility of eVTOL - it believes that the cost of taking an UberAIR flight will be LESS than an UBER X within 10 years. According to Porsche/VW, starting from a small base of privately owned units in 2025, the market for urban passenger drones is estimated to grow quickly at about a 35 percent CAGR (Compound Annual Growth Rate) to reach $21 billion by 2035 for intra-city mobility. 

Looking at the evolution of mobility over time, the year 2025 will see a $1 billion market for passenger eVTOL aircraft and an installed base of 500 units. By 2030 those numbers will rise to $4 billion and 2,000 units, until they reach $21 billion and an installed base of 15,000 passenger drones in 2035.

Q. The big winners in VLJS were existing manufacturers – Textron and Embraer – do you think it will be different with eVTOLs?

In the longer term - it will be the big guys that win.  Boeing, Airbus, Textron, etc. 

Being that the Boeing acquisition of Embraer is looking promising, I’d likely take Embraer out of the running.  However, in the short-term, I think there may be some opportunity for some smaller OEMs that are able to come up with truly differentiating technology that can be licensed or sold to major manufacturing players.  Otherwise, a general commoditisation of competing similar technologies.  

If there is one thing to be gleaned from the graveyard of failed aviation/automotive upstarts it is the following: certifying a machine is hard.  Producing lots of certified machines for paying customers is really, really hard. 

Q. When VLJs were first announced much of the focus was on air-taxi companies – which ordered thousands. In reality, about 10% are now operated by air-taxi companies. Do you see a similar trend with Uber Elevate, where the bulk of the market will actually be individuals?

I would characterise much of the eVTOL market to model that of Tesla.  When Tesla was first announced, Elon Musk laid out an ultimate vision for the Model 3 (the everyman’s electric car for $40,000) that first required the development of the very expensive and niche roadster, to the somewhat expensive but still-niche Model S and Model X, to now the $40,000 Model 3. 

While initial hype/excitement around eVTOL will be around air-taxi, in the near term actual demand is likely to come from units bought by high net worth individuals, units that are fully piloted with production numbers maybe in the region of a few hundred a year industry wide for a few years.  Assuming that gate passes safely by, we can expect a pretty rapid ramp-up to a few thousand a year, to tens of thousands of units produced per year over the next 10 to 20 years.

Q. When do you expect the first eVTOLs to be certificated for customers?

Early 2020s.

Q. Is there one you are particularly keen to fly in or own?

Well, being that there are close to 70+ eVTOLs in development, it’s hard to choose just one!  But if there was one, I’d say the product being developed by Joby has my greatest interest.  While there isn’t much publicly available information about it - what I have seen/heard about it makes me want one.

Q. As a keen pilot, how do you feel about autonomous flight?

I think autonomy is great: as both an aviator and a consumer.  While there will be a chasm to cross on the pathway to complete autonomy, when it is achieved it will open the flood gates.  Autonomy is really a requirement for eVTOL to become pervasive and I don’t think it’s really as far as off as most people think.  While I love to fly, flying is “hard”.  The difficulty of flight makes it less possible for more people to experience it.  I think that in the long run autonomy will make flight cheaper, easier, and faster for everyone.