Advanced Air Mobility nears launch but legal readiness is unsettled -- Part 1

Q: How do you make a small fortune in aviation?

A: Start with a large one.

- old American proverb

Advanced Air Mobility (AAM, sometimes Urban Air Mobility or UAM) refers to an emerging class of aircraft which are typically electrically powered vertical take-off and landing (eVTOL) platforms. Other types of aircraft, including conventional take-off and landing (CTOL), short take-off and landing (STOL) and hybrid turbine-electric platforms are also in development.

AAM aircraft are typically highly digitized and automated "fly by wire" platforms which are projected to be capable of autonomous or remotely piloted operation. AAM aircraft driven by electric or hybrid electric motors potentially offer helicopter-level performance at much lower noise levels, carbon emissions and operating costs, as well as greatly simplified and cheaper maintenance.

The market for AAM has been projected to exceed $70 billion over the next 10 years. Accordingly, AAM original equipment manufacturer (OEM) startups have formed strategic partnerships with legacy aviation and transportation companies. Corporate teams are forming, and the race to commercialize AAM operations is shaping up to be something of a scrum.

For example, Joby (NYSE: JOBY) has partnered with Uber and Toyota. Joby has also secured an investment from Delta Airlines.

Archer (NYSE: ACHR) has announced a funding and contract manufacturing commitment from Stellantis, the world's fifth largest automaker. Archer has also partnered with Southwest Airlines and United.

Wisk is a fully owned subsidiary of Boeing, which has reportedly also made an investment in Archer after the settlement of litigation between Archer and Wisk.

Eve Air Mobility was launched by Embraer, maker of regional jets and business aircraft. Embraer allegedly still owns 90% of Eve.

Note that, apart from Embraer, these are U.S.-based programs. Summarizing all AAM programs worldwide is beyond the scope of this review, which will mostly deal with projected U.S. OEMs and operations. Significant strides towards AAM are being made in other markets, particularly the EU and China, but until current trade tensions are resolved, we will not assume that foreign AAM platforms will make inroads in the U.S.

Apart from the OEM's strategic partnerships, potential AAM routes and markets are emerging. Joby has secured exclusive rights to operate air taxis in Dubai for six years and anticipates carrying its first passengers in 2026. Joby also recently acquired the air taxi business of Blade Air Mobility, including its substantial helicopter operations in the New York area.

Archer has begun test flights in Abu Dhabi, plans an AAM network here in Los Angeles, and has been selected the official air taxi provider for the 2028 Olympics.

Another AAM provider, Beta Technologies, has been installing electrical charging stations for electric aircraft and EVs at legacy airports in the U.S. Beta anticipates initial operation of its CTOL aircraft in passenger and cargo operations in Florida and Utah, respectively.

In short, multiple AAM programs appear to be approaching initial operational capability (IOC). Donald Trump's June 6 executive order, "Unleashing American Drone Dominance," directed FAA, etc. to "establish the eVTOL Integration Pilot Program (eIPP) [. . .] to accelerate the deployment of safe and lawful eVTOL operations in the United States." The order suggests that at least five U.S.-based eVTOL pilot programs should be ready to commence by the third quarter of this year, and the FAA's Screening Information Request soliciting program proposals was issued Sept. 12, 2025. Proposals were due Dec. 11, and selections are due by March 11. Per the executive order, eIPP operations are to begin "within 90 days after the date on which any agreement for a pilot project is established." That would mean AAM/eVTOL operations will begin somewhere in America by this summer.

Is all of this for real, or is it just part and parcel of the "hype cycle" that fuels the funding of any new technology? Many of the preceding AAM market reports are based on OEM news releases and related coverage in the aviation industry press. That sort of reporting may be biased by "the thrill of the new" at least. Pressure to fund this next transportation revolution may also generate what Alan Greenspan politely referred to as "irrational exuberance," or what lawyers are bound to call "forward looking statements" under U.S. securities laws.

New aviation initiatives are known for delay, if only because safety always (or at least, usually) comes first. We can't assume that the technological, commercial and political agendas currently at play in AAM will go according to plan or stay on schedule. AAM may have heat and momentum, but its actual rollout could still run into hiccups.

That being said, AAM programs really do seem to be coming towards IOC in the 2026 to 2028 timeframe. The progress being made isn't just hype or a pipe dream. This isn't The Jetsons; we aren't talking about flying cars. These are real airplanes, and they're moving past prototypes. They are flying, and FAA-type certification is under way. A lot of money has been spent by major corporations, and they want to see ROI. Finally, the political will seems to be there; the Trump administration is not only business friendly, but well versed in publicity stunts, and it seems to be promoting AAM.

So, from a lawyer's perspective, the question presented is: assuming the airplanes will be ready as advertised, is the legal machinery necessary to support AAM operations in place?

At this juncture, the answer is yes and no. Top-down initiatives (for example, from the FAA) are well in progress. They appear to be well conceived and executed, pending any improvements that must be garnered from actual experience.

By contrast, bottom-up and middle market solutions are still evolving, where they exist at all. Until AAM platforms are certified, there can be no AAM operations. Until AAM operations literally take off, we won't really know what the necessary paperwork looks like.

In short, the legal machinery necessary to make AAM operational is developing nicely. The regulatory pieces are coming together. However, the legal work necessary to commercialize AAM is still relatively inchoate. We only have a vague idea of what AAM transactions will look like. This series of articles will assess the work yet to be done.

Part 2 of this series will summarize the current state of U.S. AAM regulation. Part 3 will address potential methods for structuring AAM commercial operations, largely based on the current FAA regulations governing the operation of other types of business aircraft. Part 4 will discuss the contractual and transactional tasks that AAM should typically require. Part 5 will attempt to forecast potential AAM litigation scenarios and risks.

Please fasten your seatbelts. This may be a bumpy ride.