AAM Spotlight: Duncan Walker, Skyports CEO

The top-rated company in the AAM Infrastructure Reality Index, London-headquartered Skyports, has emerged as a leading innovator in advanced air mobility (AAM). Following a more than $110 million capital raise in April, founder and CEO Duncan Walker sat down with the AAM Report to discuss the company’s plans for vertiport development and drone services. A partial transcript follows:

AAM Report: Skyports recently completed one of the largest capital raises ever for a vertiport startup. Does this signal to you that investors are starting to get serious about AAM infrastructure?

Walker: What’s most exciting is this was the first time we’ve seen real capital flowing into what I call the supporting ecosystem for AAM. We’ve seen a ton of money going into Joby and Archer and Eve and the others, and that’s great. But without all the other pieces—the infrastructure is obviously key, but also airspace management, maintenance and repair, pilot training—unless all that comes together on time, then there isn’t going to be much of an AAM industry.

Especially as we see vehicle manufacturers starting to get through certification, I think this latest capital raise gives investors the confidence to put money into building out the adjacent businesses that support the ecosystem and make it all tick. So hopefully this is the start of a trend; otherwise we’ll see big gaps in this industry before long.

AAM Report: How will the money be used?

Walker: On the infrastructure side, it’s largely allocated toward our vertiport rollout in Dubai and the wider Middle East. We’ve got the contract with the Road and Transport Authority (RTA) to provide infrastructure for Dubai. That will be the first public commercial network anywhere in the world. We’re a long way down the road with that design and development work, and we’ll start building the first sites during the course of this year.

That money will not only be used for Dubai, but also the next markets we roll out into, such as Ras Al Khaimah, another emirate in the UAE. We also see momentum in the likes of Abu Dhabi, Saudi Arabia, and in Asian markets like Korea and Japan, as well as the U.S., particularly up and down the East Coast.

We also have money allocated for the drone services business. It is way less capital intensive than infrastructure when you’re leasing drones versus building vertiports, but it still requires a good amount of capital. That money is all about growth and scale, mainly with our existing projects. We’re doing a number of exciting projects, whether it’s oil rigs in the North Sea, delivering vaccines to villages in the Democratic Republic of Congo, or flying over the UK doing mail delivery. It’s gathering a lot of momentum, and the extra money will help us expand that work.

Skyports recently was the top ranked vertiport company in SMG Consulting’s AAM Infrastructure Reality Index. What are your views on the competitive landscape of this industry?

I don’t think it’s a great outcome if we are the only player in the market. We believe that the scale of the opportunity is big enough that there needs to be lots of different players around the world. Even in an individual market, you don’t want one company owning all of the vertiports. Having more players creates network effects and it shows scale and momentum. So if we look out in five years’ time and we’re the only vertiport player out there, it’s probably not a success story.

Looking at our competition, I think you see some large groups, including large airport operators, who do have lots of resources and capital to draw on. But many of those groups are more jurisdictionally focused and less global in nature–in Paris or Rome, for example. And then on the other side, there’s a whole bunch of undercapitalized players, and frankly, I don’t see how they’re going to survive, just like we see with the vehicle manufacturers. Every time there’s a new technological revolution, it always starts with a lot of players who eventually consolidate into fewer, more dominant ones. I think we’ll see that play out among vertiport startups as well.

Skyports recently opened a new vertiport testbed in Bicester, England. What is to be gained from another testbed? Haven’t we seen enough of those already?

It’s true there are a lot of testbeds out there, and for technical integration purposes, you only need to do it once in one place. Many of these are government-backed programs, and each government wants to understand how this technology relates to their home country. So we’re part of programs building testbeds in Japan, in the UK and elsewhere. That’s all fine and good. Do we get incremental technological benefit from doing those? No, not really. Does it make us an incumbent and allow us to transfer some of our skills and knowledge from various jurisdictions around the world to any other place? Absolutely, yes.

But to your point, yes, we’ve done enough testbeds. What we’re more interested in now are projects that can serve as stepping stones to permanent operations. If it’s just a showcase for a week only, we’re probably not interested. Some of these demonstrations can be valuable, but unless there’s a permanent commercial operation after it, we’re not going to invest much time and energy there. So yes, there are loads of testbeds, and objectively speaking we don’t need any more. But if it can be a way to get into a jurisdiction on a government-backed program that can form part of a future commercial network–which is actually the case in Bicester–then it’s not a one-and-done sort of wasted effort; it’s a long-term investment.

Returning to the drone services business, are there any new trends you’ve picked up on in that industry?

There’s a few things moving that are enabling that market. One is regulations becoming more permissive for beyond-visual-line-of-sight flights, which is what we focus on. Those regulations open up more market opportunities in more places around the world, so we’re trying to scale as quickly as we can to get a good presence in each of those markets.

The other thing that’s progressing–frankly, a bit slower than we’d hoped for–is drone technology. We’re beginning to see the first of the bigger drones come through, carrying higher payloads, which is good because most of our customers, in particular on the delivery side, want to carry higher payloads. That will be a real enabler, and everything we have built in drone services has always been geared up to be able to fly as broad a range of drones as possible. So we’ve spent a lot of time onboarding new vehicles into the fleet and using them to serve our clients.

We’re looking for a world where the technology is perfect and easy to use, and we’re not quite there yet. In a sense that’s good for us, because it creates a barrier to entry. But it’s bad for the industry as a whole, because there is so much opportunity that is still being held back by the regs and the tech, which limits what we’re able to do for our customers and for communities.