AerPace Aims To Introduce Fourth Pillar To India's Transportation Ecosystem

AerPace is pioneering an advanced drone-based transportation system aimed at finding a new kind of transportation system in India. Focusing on integrating air and road transport, the company plans to launch large drones with a 1.5-tonne payload capacity, targeting three primary applications: small cargo transport, emergency response and air taxis.

In an exclusive interview with BW Businessworld, Ravi Soni, Executive Director of AerPace Industries, shares insights into the company’s vision and the challenges it faces. Here is the full interview:

Question: AerPace is working on something quite advanced that seems promising for the coming years. It sounds like this technology might be implemented on the ground but is still quite aspirational. Could you share the company's main focus, the current trends in this sector and how you envision the market for this type of travel system expanding?

At AerPace, we are tackling major challenges with technology that we believe can transform daily life, especially in areas like commuting and economic growth. The transportation industry, particularly in a country as vast as India, faces significant hurdles. Access to remote areas remains a big issue, and development is often limited to a few major cities, while much of the country lacks adequate infrastructure.

Building traditional infrastructure—like roads, railways, and airports—in remote areas is costly and sometimes impractical due to low traffic or demand. Recognising this, we aimed to create an affordable solution that could serve large populations without the need for expensive new infrastructure.

Our solution combines roadways and airways to create an integrated transportation system that leverages existing infrastructure. This approach not only minimises costs but also makes it possible to extend accessible transportation to a wider audience, addressing critical needs in underserved regions.

Question: what is your vision for implementing this technology in tier 2 and tier 3 cities? For instance, driverless cars are yet to come in India, with only driverless metros currently operational. So, considering the infrastructure and driving conditions in cities like Patna, Indore, and Jaipur, how do you plan to overcome the challenges associated with introducing this type of technology in these cities?

First, I would like to highlight that we are not focused on driverless cars or fully autonomous vehicles, which are indeed far from feasible in India due to infrastructure constraints and varying traffic conditions. Instead, our primary focus is on large-scale drones with a payload capacity of 1.5 tonnes, which we believe can have a transformative impact in tier 2, tier 3 and even tier 4 cities.

This drone technology has three primary applications, each geared toward enhancing accessibility and connectivity in these regions:

Small Ticket Size Cargo Transport: While heavy cargo options exist, many perishable items, agricultural products, and medical supplies need faster, more flexible transport. Our large drones are designed to meet these demands by transporting smaller, time-sensitive cargo quickly and efficiently.

Emergency Response and Medical Assistance: In urgent situations, such as medical emergencies, speed is essential. Our drones will be equipped to support emergency response in these areas, bridging the gap where traditional infrastructure may not be immediately accessible.

Air Taxi Services: This service aims to connect people in smaller cities with metro areas, allowing for quicker, more reliable commutes. By providing a faster alternative to ground transportation, we can help people plan their day better and expand their business or personal opportunities in nearby cities.

Our approach includes an ecosystem of drones managed by a robust software system that ensures efficient operations. The drones are designed for autonomous flight, as airspace offers clearer pathways than roads. While the technology supports autonomy, current DGCA regulations require a pilot on board for human transport, and we are prepared to work within this framework. For cargo, however, we envision unmanned operations, reducing costs and increasing efficiency.

This technology is ready for deployment in India’s smaller cities, where it can support economic growth by making transportation more accessible and cost-effective. We are confident that this model can be a game-changer for India’s future mobility and infrastructure development.

Question: The cost of a new technology like this is often a concern, especially in making it affordable for the general public. So, would this system be feasible at this point in India? Or would it primarily cater to business-class and upper-income individuals? Could you explain how this service might work in terms of affordability for the masses?

Our primary goal is to make this technology accessible to the masses, not just a niche market for higher-income individuals. Since we are focusing on remote areas and tier 2 or tier 3 cities, we have designed our pricing to align with the economic realities in these regions, where per capita income is generally lower than in tier 1 cities.

We are targeting a rate of 20 to 25 rupees per kilometre for our air taxi service, which is comparable to the cost of regular taxi travel. Each air taxi seats six passengers, so it functions much like a shared ride option—you can book the whole air taxi, or share it with others. For instance, a 500-kilometre trip from Mumbai to Goa would cost about Rs 10,000 for the entire air taxi. If split among five people, this comes to around Rs 2,000 per person, allowing for both affordability and convenience.

To achieve this pricing, we reverse-engineered our drone operations to minimise costs. Our drones are powered by green hydrogen, generated on-site through solar energy, which significantly reduces fuel and operating expenses. Each air dock, or mini airport, spans 20 acres near highways, with only 3 acres required for facilities like drone parking, maintenance and hydrogen fueling. By integrating renewable energy, we have nearly nullified the energy costs associated with these operations.

This approach not only keeps costs down for consumers but also supports the local grid by feeding surplus solar power back into it. Our focus on green hydrogen and renewable energy allows us to operate sustainably while providing a cost-effective and efficient travel option, making this technology genuinely feasible for widespread use in India’s smaller cities.

Question: Will your company be manufacturing that type of drone in India? Also, what will be the approximate cost of building in ECL? You mentioned something about airport-like infrastructure—what will that cost?

We will be manufacturing the drones in India. Now, regarding the building costs: if we exclude land expenses—which can be high in metro areas but much lower in rural and tier two or three cities—the total construction cost for a three-acre facility, complete with robotics, technology and solar panels, is around Rs 55 to Rs 60 crore.

For the drone development, we are starting with a prototype, focusing first on cargo services. Once the technology is stable and people are comfortable with it, we will expand into emergency response and medical services, where trained professionals will operate the drones. Eventually, we plan to introduce civilian transportation as well.

We are taking a gradual approach to ensure that customers feel comfortable with this new technology. Initially, we will not produce thousands of drones; instead, we will start with a few key routes—like Mumbai to Goa or Mumbai to Ahmedabad—and increase the number of routes over time as demand grows.

As for the drones, the development cost is approximately Rs 6 to Rs 7 crore each. We have partnered with Kevork Engineering from France, who have experience building 1.3-tonne drones. While we are manufacturing them here in India, the entire process is overseen by their team, ensuring quality and expertise throughout.

Question: Currently, hydrogen is not widely used in any Indian industry. What challenges do you face in implementing a hydrogen-based transportation system?

Hydrogen has been used for years, especially in industries like steel and other heavy sectors. Recently, we are starting to see it being adopted for electric vehicles (EVs) as well. For example, hydrogen-powered buses and trains are already in operation, and the aviation industry is testing hydrogen planes, though they are not commercially available yet.

In the past, hydrogen was used primarily for industrial applications, but now it's being adopted in heavy transportation because of its high energy density—hydrogen can store more energy per kilogram than any other technology currently available. This makes it ideal for high-energy-demand applications like buses, trains and other public transport.

The Indian government is actively supporting hydrogen as a viable fuel for these applications, promoting it for use in public transportation due to its lightweight nature and substantial energy capacity. For instance, hydrogen-powered vehicles can achieve a range of 500-600 kilometres on a single charge, with the capacity to carry a payload of 1.5 tonnes, bringing the gross weight to about 3-3.5 tonnes at altitudes ranging from 1,500 to 5,500 feet.

This makes hydrogen a strong candidate for heavy-duty transport and it is already being tested in several countries.

Additionally, the government recently issued a drone policy that emphasises using air taxis and drones for cargo, emergency response and public transport. Although battery-powered drones are in use, they generally offer short flights of 20-30 minutes. The government is committed to gradually expanding hydrogen technology and increasing its exposure across different applications.

Companies are also collaborating with the government to ensure compliance with safety regulations and are gradually testing and implementing hydrogen-based technologies. This industry shift towards hydrogen, driven by government policy and regulatory support, is paving the way for broader adoption and technological advancements.

Question: Could you tell me about the R&D centre in Pune? What kind of facility is it, and what do you hope to accomplish with it?

Our R&D centre in Pune covers about 180,000 square feet, with a large ready-to-move shed occupying around 100,000 square feet. This facility is dedicated to advancing our technology in several ways.

Firstly, we have acquired a 400-megawatt solar panel production line from a vendor in China, which will be set up in this facility. Once operational, this line will manufacture solar panels for both our domestic needs and export to countries on the West Coast. The facility will operate 24/7 to meet these production goals.

Secondly, this centre will host an R&D unit focused on drones and electric vehicles. Currently, drones are our top priority. We have a specialised milling machine from Germany to create clay models for drones, cars and other accessories, which will help us move smoothly into production. We will also handle all testing, validation and simulations in-house, supported by advanced software and a dedicated team.

Our software team will work from this centre to develop a comprehensive control system for the ecosystem. This software will manage everything from initial security checks and face-id verification to pre-flight inspections, takeoff, landing, altitude and speed controls. This system will also enable consumers to book drones for cargo, emergency services, or air taxi services, as easily as booking a cab.

With teams currently spread across various locations—engineering in Pune, design in Mumbai, and other departments in Pointor—this new centre will consolidate everyone under one roof, streamlining communication and accelerating technology development.

Question: What kind of competition do you expect in this sector, considering other companies may also be exploring this transportation technology?

There is definitely competition both within India and internationally. In India, a few companies are working in this space, while on the west coast (Europe and the US), there are about 15-20 companies involved. Some companies focus on developing technology to hand over to others for service implementation, while others, like us, are integrating both manufacturing and service provision to create a complete transportation ecosystem.

Various companies are currently in different phases—testing, compliance and regulatory approvals—with some already having conducted tests in places like the UAE, Europe and the US. The Indian government has also given the green light for such testing to accelerate implementation. However, the commercial rollout of these services is expected around 2026-2027 as the technology progresses through final testing and regulatory checks.

Question: If you could give a timeline, when do you expect these types of drones, whether for air cargo or air taxi, to be operational in India?

As our R&D centre is to be fully operational by January or February of next year. Our goal is to have the first drone pilot, capable of carrying around 50 kg of cargo, ready by December 2025. After this, we will move into the licensing, certification and safety check phases.

Our development plan includes three stages to gradually scale up the drone’s carrying capacity. Initially, we will build a drone with a 250 kg capacity. Afterwards, we aim to develop an 800 kg drone, followed by one with a capacity of 1,400-1,500 kg. By December 2025, we plan to have the 250 kg drone fully integrated and operational, with technology development complete.

In 2026, we expect to reach the 800 kg milestone, and by 2027, we aim to commercialise both the 250 kg and 800 kg drones with all required certifications in place. Since smaller drones are easier to test and certify, this initial work will streamline compliance for the larger models that follow.

Question: If everything goes smoothly, which two cities do you think would be ideal for launching these services—Mumbai, Pune, Delhi or others?

We have been analysing the market and specific regional needs, particularly with tourism and connectivity to remote areas in mind. After initial discussions with senior officials and stakeholders, the states showing the most demand are Uttarakhand, Himachal Pradesh and Rajasthan.

For states like Uttarakhand and Himachal Pradesh, which are hilly and have winding roads, travel can take 11-12 hours, creating challenges for both tourists and cargo, especially for perishable and farm goods. Given these pain points, we plan to launch with a few key routes—primarily tourist destinations and major aggregation points for cargo. This initial rollout will help us gain traction and have an immediate impact by improving accessibility and efficiency in these regions.

Question: What is the maximum distance your air cargo or air taxi can cover? For instance, aeroplanes can cover routes like Delhi to Goa or Delhi to Kerala in one trip. Can you elaborate?

Our air transportation system is primarily designed for intercity and regional travel rather than long-distance flights like traditional airlines. Typically, our focus is on distances ranging from 150 to 800 kilometres, which is ideal for bridging gaps in shorter routes where national or state transport systems might not be as efficient or affordable.

Unlike aviation, which can carry large passenger loads or heavy cargo over long distances, our system is meant for smaller, faster trips where affordability and convenience are crucial. Many people find air travel too expensive or traditional transport too slow, so we’re targeting that middle ground—making shorter trips of 150 to 600 kilometres more efficient and accessible.

Our air taxis and cargo drones have a maximum range of 500 to 600 kilometres per trip. So, for a longer route like Goa to Delhi, there would need to be a stop or “hop” point along the way to recharge or refuel before continuing. This setup is perfect for optimising travel time and costs in regional routes while remaining distinct from traditional aviation and road transport.

Question: What is your expansion plan for markets beyond India? Do you see potential in regions like Europe, the US, North Africa or the Middle East?

India remains our primary focus, as it’s the largest market with a dense population spread across vast areas, driving a significant demand for accessible and efficient transport solutions. After India, the Middle East is our next priority. It has long travel distances and limited infrastructure for short-distance options, especially between cities like Abu Dhabi and Dubai, where flights are not practical, but a drone-based taxi could cut travel time to about 25–30 minutes.

South Africa also holds potential, though current political challenges place it as a third priority. Meanwhile, we have made considerable progress in the Middle East, having already established a company in Abu Dhabi. Our board includes a member of the Abu Dhabi royal family, providing us with excellent access and support in the UAE.

Abu Dhabi’s regulations align closely with US aviation standards. By ensuring our drones comply with UAE regulations, we are simultaneously meeting Indian guidelines, allowing us to streamline our technology for both markets and launch more efficiently. This parallel compliance strategy offers a distinct advantage in expanding quickly in both regions.

Question: Many companies start with high aspirations but face funding challenges over some time and eventually shut down their operations. How does your company approach potential funding crunches, and where do you envision your company?

We have strategically positioned ourselves as a public limited company listed on the stock exchange, which provides a strong foundation for funding. We have already completed two rounds of funding, with a third in progress. Additionally, we have key partnerships, including one with Abu Dhabi’s ADIA (Abu Dhabi Investment Authority) and the Mubadala Fund, which are among the world’s largest funds.

Given the scale and ambition of our project, we recognise that it will require substantial, ongoing investment over the next 20 years as we expand our services and reach new regions. Our strategic setup allows us to continuously raise capital as needed to sustain growth and broaden our operational footprint. This approach keeps us resilient to funding challenges and ensures long-term stability for our vision in this industry.