Advanced Air Mobility (AAM) Market Size, Share, Growth, and Industry Analysis, By Type (Parallel Hybrid, Electric, Turboshaft, Turboelectric) By Application (Cargo, Passenger), and Regional Insights and Forecast to 2033

• 

  Request a Free sample to learn more about this report

ADVANCED AIR MOBILITY (AAM) MARKET OVERVIEW

The global Advanced Air Mobility (AAM) Market size was approximately USD 9.9 billion in 2024, is expected to rise to USD 13.42 billion in 2025, and is forecasted to reach USD 77.03 billion by 2033, expanding at a CAGR of about 23.7% throughout the period.

The Advanced Air Mobility (AAM) market is a paradigm shift in the aviation sector, revolutionizing city and regional mobility through hybrid and electric aircraft systems. It will enhance point-to-point connectivity, alleviate congestion, and optimize logistics using clean aviation technologies. Powered by advances in battery storage, autonomous systems, and infrastructure growth, AAM integrates innovative aircraft design and intelligent air traffic control solutions. Governments, private sectors, and technology innovators are heavily investing in R&D to facilitate deployable and safe scales. With increasing interest from passenger mobility and logistics, the industry is approaching real-world deployment, making the sky a viable space for short-haul travel. As infrastructure and regulatory environments become more sophisticated, AAM will transform the mobility future.

COVID-19 IMPACT

Advanced Air Mobility (AAM) market Had a Positive Effect Due to Higher Demands During COVID-19 Pandemic

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

The COVID-19 pandemic significantly affected the development and trajectory of the Advanced Air Mobility (AAM) market. On the other hand, the disruptions in the supply chain as well as workforce shortages pushed forward production timelines as well as test prototypes in nearly all companies. Budget realignments and lowered venture capital funding in early 2020 further resulted in short-term funding issues. Conversely, the pandemic foregrounded the requirements for flexible, independent, and touchless ways of moving people positioning AAM as a future-ready and pandemic-hardy solution. Operators capitalized on the slowdown by turning attention toward cargo use cases, with a focus on carrying medical supplies and vital logistics, which were mission-critical amidst lockdowns. This pivot worked for stakeholders to reconsider AAM's broader value proposition beyond commuting. Also, the need for decentralization drove the demand for regional air mobility, thus creating a long-term growth potential for the sector.

LATEST TRENDS

Integration of eVTOLs into Urban Air Mobility Networks to Drive Market Growth

One of the most robust trends in the Advanced Air Mobility (AAM) industry is the adoption of electric Vertical Take-Off and Landing (eVTOL) planes into urban air networks. They are being developed to transport cargo and passengers over short distances within high-density cities. Companies are collaborating with city planners, regulators, and infrastructure companies to develop vertiports and air traffic control systems to bring these operations to life. The trend is also towards having high emphasis on reducing noise, zero-emission flying, and remote-controlled or unmanned flights. Demonstration flights and pilot schemes have already started being implemented in some cities of the world with tremendous developments in store. With eVTOLs transitioning from theoretical to real scenarios, integrating into smart city development will alter how cities will run transportation with an emphasis on speed, safety, and sustainability.

Request a Free sample to learn more about this report

ADVANCED AIR MOBILITY (AAM) MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Parallel Hybrid, Electric, Turboshaft, Turboelectric:

• Parallel Hybrid: Parallel hybrid power systems integrate a conventional engine with an electric motor so that aircraft can change or mix power sources based on flight requirements. In the AAM sector, this hybridization adds range, lowers fuel usage, and meets sustainability objectives without sacrificing reliability. It is especially beneficial in applications where all-electric power is not yet possible because of battery constraints. Most developers employ parallel hybrids as a bridge solution prior to going to entirely electric fleets. Their modularity also facilitates upgrades and retrofits more easily, bridging the gap between current and future aviation systems.

• Electric: Electric propulsion is leading the way in AAM innovation, pushing environmental and operating advantages. These systems produce no emissions during flight, minimize noise pollution, and save on operating costs. Advances in battery technology, including increased energy densities and quicker charging, are making electric AAM cars increasingly possible. Electric aircraft are especially suited to urban use because they are quiet and produce fewer environmental effects. Startups and leading aviation firms are placing great emphasis on this segment, with numerous players introducing fully electric models that are suited for short-haul passenger transport and cargo distribution. Their simplicity and environmental friendliness fit well into the ambitions of smart cities and green mobility.

• Turboshaft: Turboshaft engines, which in the past were employed in helicopters, are scaled in AAM to deliver power-to-weight ratios, particularly suitable for larger sizes or those which require extended endurance. Turboshaft engines yield reliability, withstood through generations, and a quicker refuel compared to electricity-based alternatives. In AAM, they typically find application within hybrid-electric configurations to aid in flight duration while maintaining capability for vertical takeoff. Though less green than electricity-powered alternatives, turboshafts remain important during early deployment stages, particularly in areas with no electric infrastructure. Introducing them enables companies to achieve performance targets while making phased shifts towards cleaner options.

• Turboelectric: Turboelectric systems use a gas turbine to generate electricity, which propels electric motors for propulsion. Such a system bridges the gap between electric and conventional propulsion by improving fuel efficiency and enabling distributed propulsion architectures. Turboelectric configurations have improved energy management, weight distribution, and design freedom for aircrafts. In the AAM market, they are ideally suited for medium-range missions on which battery-electric systems would be insufficient. They are drawing interest because of their potential to allow scalable, multi-rotor configurations and are seen as an important step toward completely sustainable flight without compromising performance.

By Application

Based on application, the global market can be categorized into Cargo, Passenger:

• Cargo: The cargo segment is a fast-expanding application segment in the AAM market, fueled by the need for faster, more agile, and environmentally friendly logistics. AAM cargo aircraft, especially electric and hybrid drones, are being designed to carry parcels, medical equipment, and industrial products over short to medium ranges. These aircraft have benefits like less reliance on ground infrastructure, faster delivery, and access to remote locations. Logistics firms are working with AAM startups to test practical usage scenarios, particularly in rural or traffic-choked city areas. Cargo-oriented AAM platforms also encounter fewer regulatory issues than passenger flights, expediting their rollouts.

• Passenger: Passenger transportation is one of the most expected uses of AAM, aimed at urban air taxis, regional air mobility, and on-demand travel services. Companies are conceptualizing aircraft with safety, minimal noise, and zero emissions to provide intra-city and inter-city flights more conveniently and efficiently. These cars plan to reduce travel time by a considerable margin while lowering environmental impact. Public and private investors are funding pilot programs, vertiport development, and route planning to make passenger AAM a reality. Although regulatory and certification hurdles still need to be overcome, the momentum toward safe and scalable passenger services is growing rapidly across several regions.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.

Driving Factors

Rising Urban Congestion and the Need for Alternative Mobility to Boost the Market

Urban congestion is a worldwide phenomenon, causing increased travel times, emissions, and network stress. They have prompted new transport technology increasing Advanced Air Mobility (AAM) market growth. By using the airspace for city-to-city transportation, AAM decreases road congestion and provides new transport corridors. Congested areas can be served by AAM vehicles because of the vertical takeoff and landing nature of the vehicles, without requiring large runways. Mobility companies and urban developers consider AAM a critical element in smart city plans. With the urbanization process ongoing, the need for efficient on-demand air transportation continues to increase, fueling investment in AAM.

Advancements in Propulsion and Battery Technologies to Expand the Market

The cost of operation and emissions are brought down by propulsion technology and battery performance improvements making AAM even more feasible. Electric and hybrid propulsion technologies improve in strength and lightness as well as increase efficiency and distances traveled with lesser emissions. They have improved next-generation batteries offering higher energy density and faster recharge times, thus allowing the car to make more trips in the same amount of time. All these technologies decrease the cost of operation and fit into global initiatives for sustainability. Furthermore, converting interest into module and scalable propulsion technologies made it simpler to convert airplanes to new use, either freight or passenger transportation. More R&D on energy storage technology and light material will further increase AAM scalability and efficiency.

Restraining Factor

Regulatory and Airspace Integration Challenges to Potentially Impede Market Growth

The most profound constraint in the Advanced Air Mobility sector is the absence of a logical and uniform regulatory landscape. Since AAM aircraft constitute a new class of aircraft, they need custom-designed airworthiness certifications, pilot qualification standards, and flight rules. In addition, the integration of these aircraft with current airspace among commercial planes, helicopters, and unmanned aerial vehicles is complicated. Regulatory authorities must still create policies for low-altitude, high-frequency flight. In the absence of intelligent global standards and facilitating infrastructure, commercial deployment of AAM may be delayed, impacting investor moods and schedules of the industry.

Opportunity

Emergence of Regional Air Mobility (RAM) for Underserved Areas to Create Opportunity for the Product in the Market

One of the biggest opportunities in the AAM market is developing Regional Air Mobility (RAM) services, specifically for remote and underserved regions. These areas tend to have inefficient transportation systems, and thus are prime targets for short-haul, on-demand air transportation. RAM stretches the limits of AAM from urban areas by linking smaller towns, islands, and rural villages. This not only enhances access but also benefits local economies, tourism, and the provision of healthcare. With the development of battery and hybrid-electric technology, local AAM networks can provide affordable, sustainable substitutes for conventional ground or regional air travel

Challenge

Infrastructure Limitations and High Setup Costs Could Be a Potential Challenge for Market

The biggest danger to the AAM market is the absence of specialized infrastructure such as vertiports, charging stations, and maintenance centers. It is so expensive upfront with long lead times for approvals, and dealing with local governments makes it more cumbersome. Urban hubs are surrounded by deficits of room and zoning issues that make incorporation of takeoff and landing bases difficult. Without proper infrastructure, even the best-of-breed AAM vehicles can't function or expand. This constraint decelerates service credibility, customer adoption, and overall industry momentum, primarily in those cities with legacy transport systems and regulations.

• Request a Free sample to learn more about this report

•  

ADVANCED AIR MOBILITY (AAM) MARKET REGIONAL INSIGHTS

North America

North America, and particularly the United States Advanced Air Mobility (AAM) market, is leading the as far as innovation, regulation development, and investment are concerned. Many startups as well as established aerospace firms are conducting flight tests and pilot programs across several states. Groups like the FAA are working closely with industry to develop certification frameworks, airspace integration strategies, and operational safety standards. Public-private partnerships have contributed significantly to creating initial infrastructure in the form of vertiports and test corridors. The United States is further augmented by a strong military and defense R&D, which subsidizes civilian AAM programs indirectly. Such progressive thinking makes North America a global hub for the development and implementation of AAM.

Europe

Europe keeps pace in AAM with a keen focus on environmental sustainability and local connectivity. The European Union is financing various projects under its green transport and urban mobility policies that favor AAM as part of its climate agenda. Germany, France, and the UK are centers of some of the technologically advanced and innovative AAM players based on government-backed schemes and pan-European collaborations. In addition, Europe has a well-developed aviation regulatory agency (EASA), which is actively developing standards for safe AAM operations. The continent is also investigating rural and cross-border AAM applications to complement conventional rail and road transport.

Asia

Asia's AAM market is expanding significantly with urbanization, government initiatives, and strong tech ecosystems driving the expansion. China, Japan, and South Korea are making huge investments in electric and hybrid aircraft technologies. China's magnitude of manufacturing and government-backed infrastructure projects make it a major force behind AAM growth. Japan is working on air taxis for event and tourism applications, and South Korea is building AAM-specific corridors for commercial use. In addition, densely populated Asian cities present a challenge and opportunity-making AAM an indispensable part of future intelligent regional and city mobility solutions.

KEY INDUSTRY PLAYERS

Key Industry Players Shaping the Market Through Innovation and Market Expansion

The most enthusiastic about innovation, scalability, and long-term ecosystem creation in the Advanced Air Mobility space are the leaders. Joby Aviation, Archer, and Beta Technologies are leading the pack in flight testing quickly, while others such as Wisk and Kitty Hawk are focused on autonomous flight technology. These players are not just developing future-proof aircraft but also companion infrastructure development and collaboration with city planners for early adoption. Sabrewing and Elroy Air are also considering cargo solutions, which represents a big logistics opportunity. These companies are also all adding value to the hullabaloo on enhanced safety measures, airspace incorporation, and acceptance of AAM solutions by the public.

List Of Top Advanced Air Mobility (AAM) Market Companies

• Sabrewing Aircraft Company (United States)
• Airflow (United States)
• Overair (United States)
• Elroy Air (United States)
• Electra (United States)
• REGENT (United States)
• Kitty Hawk (United States)
• Joby Aviation (United States)
• Archer (United States)
• Wisk (United States)
• Beta Technologies (United States)

KEY INDUSTRY DEVELOPMENTS

May 2025: Vertical Aerospace revealed that it is creating a new hybrid-electric version of its VX4 aircraft to establish its commercial and operational capacity. Its hybrid model will enable longer-range flights as well as higher payloads, making it more suited for logistics and defense applications. It is a major move to establish AAM capabilities beyond short-range passenger transport. Vertical Aerospace is working with premier aerospace partners in advancing system certification and uptake of next-generation hybrid propulsion technology. The innovation reflects increased industry interest in flexibility, longer capability, and cross-industry use of AAM solutions.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis considers both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

The research report delves into market segmentation, utilizing both qualitative and quantitative research methods to provide a thorough analysis. It also evaluates the impact of financial and strategic perspectives on the market. Furthermore, the report presents national and regional assessments, considering the dominant forces of supply and demand that influence market growth. The competitive landscape is meticulously detailed, including market shares of significant competitors. The report incorporates novel research methodologies and player strategies tailored for the anticipated timeframe. Overall, it offers valuable and comprehensive insights into the market dynamics in a formal and easily understandable manner.