December 2004
Is America the Right Place to Rollout the Skycar?
Raising money for the development of what we now call the Skycar has been a continuous battle ever since I began work on the predecessors of this VTOL aircraft nearly 40 years ago. At the onset of the project the space program was getting underway and there was tremendous enthusiasm for innovative and exciting technologies. Many Americans saw the world changing and a few hearty souls wanted to be a part of the process. Since then we have seen the dawn of the computer revolution, men have walked on the moon, and the Cold War came to a whimpering close.
The slow, gradual and evolutionary path the Skycar has taken has provided our supporters and critics with lots of time to examine the underlying business potential of this new type of aircraft. Many of our investors tell us why they think we will be successful. They describe the benefits of the Skycar over other aircraft. They tell us that the world is ready for and needs a new transportation alternative. They extol the features of our technology and provide long lists of features that the both the military and civilian customer will undoubtedly want to incorporate. They can clearly see a future with fundamental changes brought about by the Skycar.
When we examine the market potential we see that the Skycar is designed to be easier to fly, have a lower life cycle cost, higher-speed, and be more fuel-efficient than a light helicopter. Yet it maintains almost all the advantages of a helicopter and many of those of a light airplane. Some of the likely roles for the Skycar are in air charter services, emergency services (air ambulance), and high-value cargo transport. For example, as an air charter aircraft it could be quite effectively used transporting personnel to/from offshore oil platforms. Based on our current design, the Skycar would be much faster (2 to 3 times) and have twice the range of most light helicopters used for this function now.
US manufacturers sell approximately 500 helicopters every year, and recent studies indicate an upturn through 2008. US aircraft manufacturers also sell between 3,000 and 5,000 new private aircraft every year, adding to the over 200,000 privately owned aircraft in yearly operation in the US. This is not a huge market, but if we can position the Skycar as an alternative to the majority of light planes and helicopters it would give us a good size initial market opportunity in the US alone. Ultimately, the combined features of VTOL, high-speed operation, and automated flight control may open up larger market opportunities, and create a demand that will support a very strong sales per year, but this is something we will have to wait and see. But it is important to recognize that the US may not be our biggest market opportunity.
The Chinese government has said that it would like to promote the economic development of Western China. The problem they face is that Western China does not have a strong highway or railroad system. In this situation it makes sense for the Chinese to look to aviation for economic development. Building airports is faster and less expensive than developing extensive highway and rail systems, and the Chinese understand this, so that's what they are currently planning to do. But building an air traffic control system to manage Skycar air traffic might be even less costly and faster to implement. Instead of following through with announced plans to expand their airport infrastructure by building nearly 100 new airports over the next six years, they could invest this capital into commercialization of the Skycar, a network of small vertiports, and a complementary air traffic control system. This could provide them with a revolutionary new transportation system that could move people and light-cargo effectively, utilizing on-demand routing and scheduling.
Airborne transportation could boom overnight in Asia, and ultimately grow significantly. And we believe the benefits associated with a Skycar-based transportation solution are simply too great for countries like China to ignore for long. As we have stated before, we believe that Skycars are to transportation as cell phones were to communications. The Skycar provides the technology that could enable a region to leap-frog over the time and expense of putting in roads, bridges and tunnels and the restrictions that these "brick and mortar" systems impose by going directly to an airborne solution. Rail and roads will still be required to move heavy materials, food and goods. But where the "package" is one to three persons (besides the pilot), or a set of objects that can be moved in smaller, lighter units (say 1,000 lbs or less), then the Skycar is the perfect carrier. (Total estimated net payload of the M400 is 750 lbs and 1,250 lbs for the M600.)
With existing avionics, reasonably well-trained Skycar pilots could immediately start moving in and out of urban centers safely, augmenting existing transportation. As technology advances and if our predictions are true and we are able to implement more automated navigation and flight control, the Skycar itself can have a nearly fully automatic "autopilot". Right now more and more of traditional piloting skills are being augmented or done completely by various technologies, so we believe that the job of being a pilot will get easier and flying in a Skycar will be safer because of less dependency on pilot skill.
America is proud to be a leader in many of today's most advanced technologies, but it appears that countries that have a greater need and are willing to break new ground are positioned to move ahead. More and more each day, it looks to us that America is not the most fertile environment for the introduction of the Skycar, but Moller International's obligation to provide long term growth and profitability is going to keep us searching for greener pastures. One way or another, we are determined to be successful.
Shape up and fly right! Ya bastards!
