South Korea is witnessing an intense battle between domestic and foreign companies vying to dominate the urban air mobility (UAM) market. The government's roadmap for commercializing drone taxis by 2026 has accelerated efforts from various sectors to offer urban air travel services, significantly reducing travel time in downtown Seoul.
LG Uplus, a telecommunication company, has joined forces with Kakao Mobility, GS Caltex, Jeju Air, Pablo Air, and Vertical Aerospace to participate in the government's K-UAM Grand Challenge project. The consortium plans to develop a transport management system, utilizing LG Group's expertise in battery and motor technologies. Vertical Aerospace will produce electric vertical take-off and landing (eVTOL) aircraft for the group.
Kakao Mobility will leverage its Kakao T mobile app data, while GS Caltex will build vertiports at its gas stations. Jeju Air, South Korea's only low-cost carrier in the UAM market, will oversee overall flight control. LG Uplus aims to provide high-quality telecommunication services both on the ground and in the air.
The competition is expected to intensify with Volocopter, a German UAM company, setting up its Korean subsidiary to offer air taxi services starting 2024. Although Volocopter expressed its intention to cooperate with Kakao and other Korean firms, its decision has sparked concerns about the local market's competitiveness.
South Korea's major telecommunication companies, SK Telecom and KT, have already engaged in a heated competition for dominance in the UAM market. SK Telecom has organized a consortium with Hanwha Systems and the state-run Korea Airports Corp., signed a partnership with Joby Aviation, an eVTOL aircraft manufacturer, and developed a UAM system optimized for South Korea.
KT formed a consortium with Hyundai Motor, Korean Air, Incheon International Airport Corp., and Hyundai E&C to leverage Hyundai Motor Group's manufacturing and construction capabilities, as well as Korean Air's expertise in developing unmanned aircraft. Supernal, the automotive group's UAM unit in the US, has also announced plans to establish vertiports and introduce its first eVTOL by 2028.
Critics point out that South Korea's UAM industry still lags behind those of other developed countries, calling for eased regulations for domestic companies to capitalize on the rapidly growing market. According to Morgan Stanley, the global UAM market is expected to grow to $322 billion by 2030 and $1.47 trillion by 2040.
As the competition heats up in South Korea's urban air mobility market, industry experts stress that companies with competencies in batteries and ICT need to seek opportunities from the global UAM market. The government should ease regulations on flights in the capital area and data sharing to boost the UAM industry.