France-based company Airbus is moving to the skies in a whole new way. As a leader in the airline industry, Airbus is constantly researching ways to differentiate themselves from their competitors. Their latest venture is an autonomous flying car that will be used to circumvent gridlocked streets.
CEO Tom Enders announced his company’s plans at the 2016 DLD conference in Munich, claiming they would have a prototype ready to fly a single passenger by the end of this year. Project Vahana is being developed under a division of Airbus named A^3 in Silicon Valley. Rodin Lyasoff, the CEO of A^3 thinks it’s possible to have their project on the market and used by millions within the next decade.
Initially hitting the market, this type of service will be quite costly to the public and would only attract the interest of a few high net worth individuals. Enders believes it’ll quickly become widespread with limited costs of infrastructure or maintenance. The company plans on offering this service via an app similar to Uber but it’ll need to operate on a much more intricate level. A^3 is building an ecosystem that’ll allow their flying cars to seamlessly interact and move without disrupting one another. Uber has been fine-tuning their service, UberChopper for over a year now. They’ve partnered with several helicopter companies in the past, depending on location and event, including Airbus at last year’s Sundance Film Festival. The two companies have clearly exchanged ideas.
Within a few short months, these vehicles will begin taking flight. Technology doesn’t seem to be an obstacle to A^3, pointing out most of the parts necessary are already available. The company stated there is one notable issue with current technology, that cameras may be able to avoid other cars in traffic but are nowhere near advanced enough for sensing airborne objects. Related: Despite Trump’s Rhetoric: U.S. Needs OPEC Oil
Enders also points out the flying cars need to be powered by clean energy adding to the difficulties in development. If Airbus were successful this would mean a whole new form of travel potentially substituting traditional gas powered transportation. Demand for gas at the pump and ultimately crude could see a significant decrease in the next few years if the company is able to produce results.
There have been no signs of Boeing attempting to follow Airbus into this niche. The American based company is focusing on cleaner energy and more efficient planes, primarily on a larger scale. Boeing could lose out on serious profits if they don’t explore this concept to the extent their duopoly counterpart has. Airbus is crossing over into the tech industry with this venture and may appeal to consumers on a more frequent basis.
Tech investors hoping to find a way to diversify their portfolio should consider Airbus. Shorting Boeing could help to finance this position as well until they’ve otherwise decided to enter this market. There’ll likely be a correlation between Airbus and Uber’s IPO expected to be released sometime this year. Crude may see a slight drop with any announcements from A^3 but it’s unlikely to be significantly affected.
By Michael McDonald of Oilprice.com
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