Macroeconomics of AG-EVTOL segment.

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Below is presented an estimate of fuel demand by AG-EVTOL segment based on the following assumptions:

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1. The anticipated combined fuel economy of AG-EVTOL prototype is 26 MPG; factual average annual miles per light-weight vehicle in 2019 in the US is 13,500mi.

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2. The amount of AG-EVTOLs that will be used for a weekday air-commuting (city – suburb) constitutes around 15% of a number of light-weight vehicles (cars, SUVs). This percentage was assessed under assumption that the annual cost of the air-commuting service is $23,000, see below. The average national air-commuting round-trip distance is 200mi; the number of air-commuting days in a calendar year is 230; average annual miles per AG-EVTOL is [200*230/13,500], i.e. 3.4 times of that of an average light-weight vehicle in 2019.

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3. The amount of AG-EVTOLs that will be used for a weekend air-commuting (visiting a certain destination on weekends, such as traveling from NYC to Sarasota, Fl for weekends, or from San Francisco to Los Angeles) takes up 3% of a number of light-weight vehicles. This number was assessed under assumption that the annual cost of a weekend air-commuting service is around $27,300, see below. The average national weekend air-commuting round-trip distance is 2,100mi.; the number of weekend air-commuting events in a calendar year is 26; average annual miles per air-vehicle is [2,100*26/13,500], i.e. 4.04 times of that of an average light-weight vehicle in 2019 .

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With the average national light-weight vehicle fuel economy in 2019 of around 26 MPG, the gasoline consumption by highway transportation and AG-EVTOL vehicles can be assessed as follows:

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0.4*1*1+1*0.15*3.4+1*0.03*4.04=1.03,

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where the three terms on the left hand part of the equation pertain to AG-EVs, weekday air-commuting AG-EVTOLS, and  weekend air-commuting AG-EVTOLs, accordingly; the first multiplier of each term is the relative fuel consumption, i.e. (Fuel economy/26 MPG); the second multiplier of each term is the relative amount of vehicles, i. e. (Number of AG-EVTOLs/Number of light-weight vehicles); the third multiplier of each term is the relative annual average miles per auto- or air- vehicle, i.e. (Annual average miles per a light-weight vehicle or AG-EVTOL in 2019/13.500mi).

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The estimate shows that under the model’s input assumptions, the AG-EVTOL segment will fully recoup reduction of hydrocarbon fuel consumption caused by AG-EVs. The underlying cause is that AG-EVTOL segment will provide people with an entirely new opportunity of safely regularly traveling for long distances with high speed and without “breaking a bank”.

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Microeconomics of AG-EVTOL business

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The affordability of weekday and weekend air-commuting derives not only from AG-EVTOL’s impressive fuel economy, but also from moderate cost of such air-vehicles. The power-plant of AG-EVTOL prototype based on Lilium’s jet is only around two times more powerful and stores around two times more energy than a powertrain of 2020 Tesla 3 Long Range AWD Performance (Tesla’s 340 kW*2 vs Lilium’s 650 kW; Tesla’s 75 kWh*2 vs Lilium’s 144 kWh). The Tesla 3’s retail price of $56,000 allows for assuming that once AG-EVTOL prototype is launched into mass production, its price will not exceed $250,000.

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The new sector will take on a large portion of conventional short- and medium-haul aviation due to lower prices and greater convenience and flexibility of services.

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1. AG-EVTOL needs neither a runway nor an airport.

2. AG-EVTOL’s per seat fuel efficiency for 4-seat configuration of [235.22/26/4], i.e. 2.26 L/100 km, is substantially the same as that of 2017 Boeing 737 MAX 9 of 2.28 L/100 km for distances 926–1,267 km.

3. Since AG-EVTOL’s overnight cost per seat is [250,000/4], i.e. $62,500, and that of Boeing 737 MAX 9 is [128,9/220], i.e. $586,000, the overnight cost per seat of AG-EVTOL is [586,000/62,500], i.e. 9.4 times lower than that of the 737 Boeing.

4. AG-EVTOLs will be autonomously navigated though  broadband-connected low-orbit satellites constellations, such as SpaceX’s StarLink, Kuiperor, LeoSat, or Geespace. Accordingly, personnel associated costs of an AG-EVTOL fleet operator will be lower that that of any conventional airline.

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Distance specific cost of an air-commuting by AG-EVTOL is expected not to exceed $0.5 per mile. Since a cabin of the AG-EVTOL is not air-pressurized, the air-vehicle will sustain much more flight cycles than conventional aircraft and will remain in service for at least 20 years. If the an AG-EVTOL would provide weekday air-commuting services for two clients (one client may be one or two persons) and weekend air-commuting services for one client (one or two persons), its yearly specific flying distance would be [200*230*2+2100*26], i.e. around 146,600 mi. With the cost of fuel of $2.6 per gal, and air-vehicle’s fuel economy of 26 MPG, amortization- and fuel- associated costs will be [$250,000/20/146,600+$2.6/26], i.e. $0.185 per mi.

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The specific operating cost, such as administrative expenses, maintenance, cleaning, insurance, public landing pods related costs, navigation, etc. are not expected to exceed $0.125 per mi. Specific profit is estimated at $0.19 per mi, i.e. around $27,800 annually. Accordingly, the price of one a year weekday air-commuting package for one client is estimated at [200*230*0.5], i.e. $23,000, and that of a weekend air-commuting service for one client at [2100*26*0.5], i.e. $27,300.

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Gate-to-gate flight time  between New York, JFK and Sarasota, Bradenton airport is around 3 hours. Typically, Manhattan residents board a taxi at least 2.5 hours prior to flight’s departure time from JFK. Accordingly, door-to-door trip takes around 6.5 hours, if time between aircraft’s landing and getting from an airport to a final destination is estimated at one hour.

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Since a flying distance between JFK and Sarasota is 1,050mi, then taking the same flight by AG-EVTOL from one of landing pads in Manhattan to one of landing pads closest to client’s house  will take [1,050/188+1], i.e. 6,6 hours, if a client choses to have two 30 minutes stops during the flight. Since AG-EVTOL for a weekday air-commuting is to be designed in “sleeping coach for two persons” configuration, the passenger(s) will be able to sleep during night flights.

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This example shows that a weekend air-commuting by AG-EVTOLs within the range of around 1,050 mi is in all aspects superior to conventional short-haul flights. In respect to farther distances it is superior, as well, except for a door-to-door travel time. For many people flying by AG-EVTOLs for longer distances would, nonetheless, be the better choice due to exceptional convenience, including an opportunity to choose the nearest of many landing pods, enjoy full-fledged sleep during the night flight, ability to adjust departure and arrival times; cheaper prices. Also, since AG-EVTOLs are expected to cruise at altitudes of several hundred meters, the pressure and air humidity in a cabin would be much healthier than these in a conventional aircraft, where pressure is around 20% below the normal level, and air is dry.

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For pseudo medium-haul routes, i.e. the medium-haul routes with several short stops for passengers’ convenience,  the specific flight cost substantially goes down, because the annual flying distance goes up. For example, if AG-EVTOL was taking 2,600 mi one way flight from JFK to San Francisco six days in a week, its annual flying distance would be [2,600*365*(6/7)/200,000], i.e. 0.8 m mi, which is around 5 times greater that of weekday air-commuting by AG-EVTOL.

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An AG-EVTOL for pseudo medium-haul flight would need to flight faster. Increasing its power from 144 kW to 200 kW would boost the speed from 188 MPH to around [188*sqrt(200/144)], i.e. 220 MPH, and reduce fuel economy to  [220/(200/0.6)/33.7)], i.e. 22 MPG.

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With the cost of fuel of $2.6 per gal, and air-vehicle’s fuel economy of 22 MPG, the specific amortization- and fuel- associated costs would be [250,000/20/800,000+2.6/22], i.e. around $0.135 per mi. The specific operating cost, such as administrative expenses, maintenance, cleaning, insurance, public landing pods related costs, navigation, etc. would not expected to exceed $0.09 per mi, i.e. $68,000 annually. Specific profit would be estimated at $0.075 per mi, $60,000 annually. The overall specific cost would be [0.135+0.09+0.075], i.e. $0.30 per mi.

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A flight between New York, JFK and San Fransisco with up to three, 30 minutes stops, would take [2,600/220+3*0.5], i.e. 13.3 hours. We assume that many people would prefer to take advantage of  AG-EVTOL with 2 sleeping coaches to fly from Manhattan to San Francisco so as they could have a full-fledged rest during a round trip night flight for the [(2,600*2*0.30/2], i.e. around $780, instead of spending sleepless nights in cramped economy class of a conventional aircraft for substantially the same price.

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The development of AG-EVTOL segment is crucial for a national economy because it will become an affordable, fast, and safe means of transportation in times of pandemic crises, when conventional aviation flights are likely halted.