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An aviation transportation revolution looms on the horizon, where passengers will board and fly on air transport flight trips in unmanned aircraft known as Autonomous Air Taxis ("AAT"). These AATs are poised to someday replace ground carry passenger operations, and "will be the first completely new category of civil aircraft since helicopters were introduced in the 1940s." 1 Laws, standards and regulations addressing AATs are in the drafting stages, and on October 22, 2024 the Federal Aviation Administration (FAA) issued its final rule to provide new and amended governance over powered air-lift operations to include AATs.
Boeing, Wisk Aero, and other companies now race to seize market share and establish leadership positions in the AAT industry. Preliminary engineering and product designs indicate that AATs will not only take off and land vertically like helicopters, but will also execute linear forward flight paths suitable for transporting passengers like airplanes. With fully electric onboard propulsion systems, AATs will generate reduced noise and particulate environmental pollution in comparison to traditional combustion engines. Initial marketing plans for AAT service include product launches upon a yet-to-be created localized network of vertiports, where flight paths for AAT passenger travel will connect regional airports in close proximity to each other2.
The integrity of the United States' domestic National Airspace System (NAS) is of concern to the existing aviation industry. In response to these concerns, on October 22, 2024, the FAA rolled out its Special Federal Aviation Regulation (SFAR) for autonomous air taxi operations and training3. SFAR is valid for 10 years and grants federal powers to the FAA to gather operational data and to correct regulations, as needed. In addition, SFAR serves to integrate AATs in the NAS, by forming a framework outlining how autonomous air taxis will comply with applicable NAS operational rules and procedures.
An updated fact sheet on state and local regulation of unmanned aircraft systems was issued by the FAA on July 14, 20234. This fact sheet clarifies state and local government parameters to establish laws pertaining to the use of airspace by aircrafts. The FAA establishes it has exclusive authority to regulate aviation safety and efficient use of airspace, however state and local governments may regulate outside those fields. As such, state and local governments lawmaking bodies may establish aviation laws as needed, as long as the laws do not conflict with FAA regulations. Moreover, prohibitions against conflict with current FAA regulations exist, where state and local governments are excluded from regulating air travel prices, routes, or services of commercial air carriers, since these issues are covered under federal laws in the Airline Deregulation Act of 1978.
For the eyes of the world, the United States government is investing in "Innovate28," the FAA's AAT implementation plan project designed to scale air taxi operations in time for the 2028 Olympic Games in Los Angeles5. Innovate28's blueprint plan focuses on connecting interim methods with proposed rulemaking for AAT operations. Conflicts between local aviation regulations are anticipated between tribal, state, and local government related to zoning, permitting, land use, vertiport site construction, AAT operating hours, and other operational needs. The FAA is already working to address issues to coordinate resolutions between the FAA, AAT owners and vendors, and the various local governments.
A fully operational AAT network is sure to be fraught with liability impacts for stakeholders, potentiality for automation errors that result in personal injury or financial loss. Such issues must be considered and studied concurrently as the industry develops. AAT designers, manufacturers, operators, together with software engineers, data management entities and landowners carry risk exposure. Mitigating risk as the industry evolves will be paramount to avoiding nuclear jury verdicts in litigation where the public may stand wary of this new technology. Marketing and public relations campaigns prior to product launches may serve to guide the public's perception away from assumptions that any failure to follow industry regulation, licensing, or safety protocol gave way to an AAT related injury.
As mankind embarks upon experiencing and accepting AAT modes of transportation, the United States' jurisprudence system can expect the Plaintiffs' Bar to explore offensive litigation relating to product liability claims against manufacturers and liability claims against operators when collisions or product failures occur. Due to the complexity of creating autonomous air taxis (design, manufacture, assembly, delivery, and sale), assessing and assigning responsibility in products liability claims may initially prove difficult. For example, if a collision was to occur with an AAT impacting a building to avoid hitting a nearby drone it detected, where would liability fall for property and bodily injury damages where an AAT's visual sensor had defective manufacture or was improperly maintained? Or where does responsibility lie when an AAT transmitted a cue to the fallback-ready operator to assume control before a collision occurred, but the operator failed to take over remote piloting of the aircraft? Might manufacturers successfully defend against the claim if the human operator's own negligence contributed to the collision? A quagmire of unanswered questions such as these are raised by the prospect of AATs taking to the skies without human pilots.
Notably, potential cyber risks are associated with AAT operations. Unit malfunctions and exposure to hacker or malicious attack interventions are issues which require consideration. Extreme data volumes must be collected and processed prior to and during AAT operations for navigation and adaptation to surroundings, which will present cybersecurity issues and data privacy concerns not yet addressed in current legal modalities.
Traditional insurance coverages issued by existing insurance markets may prove inadequate to address requirements over all risks expected from AATs. Policy coverage gaps must be identified to manage risk associated with cyber security and physical harm. Where insurance products are not available to the AAT vendors and operators, they may be required to seek risk management tools elsewhere – such as in the form of self-insurance. Stakeholders in the industry will have to invest time and energy into coordinating insurance products to support a viable and fully-operational AAT system6.
Once an AAT network is up in the air, it can be expected that monitoring regulations for those autonomous air taxis will create ongoing legal obstacles. Preemptively, the FAA has initiated regulations to require that aviation organizations implement early detection Safety Management Systems to detect and address safety risks7. Other public-private initiatives including the FAA's Urban Air Mobility Concept of Operations outline corridor-based airspace management and performance standards that aid in actively monitoring FAA rulings8. Collaboration efforts for beneficial regulation standards are expected to work and avoid potential penalties or licensing issues associated with autonomous air taxis.
Frameworks in preliminary stages are being drafted to establish the foundation for autonomous air taxis to exist in our communities. History has proven that technological advancement comes rapidly, while legal regulations and controls often follow on a slower pace. We have seen the rideshare space's capabilities reshape passenger transportation modalities. Autonomous air taxis will undoubtedly be part of that industry's future. Even though today, the idea of autonomous air taxis with no human pilot on board seems like science fiction for the future, the technology is developing at a swift pace. AAT industry expectations tout that AATs will reduce travel times and decrease traffic congestion. The American public may be supportive of those ideas, but it is yet to be known if civilian passengers will buy tickets and voluntarily climb on board an AAT for a ride. And it is this potential for financial gain that motivates AAT industry companies to invest significant sums of money into research and development into automated air taxi vehicles. We here at Lewis Brisbois will continue to monitor this emerging area of the law and will be poised to provide legal services to our clients when needs arise in the future.
Footnotes
1. Federal Aviation Administration, With New Rule, FAA is Ready for Air Travel of the Future (Oct. 22, 2024), https://www.faa.gov/newsroom/new-rule-faa-ready-air-travel-future.
2. (1) Flynn Nicholls, Flying Taxis Could Be Reality in California, Newsweek (July 16, 2024), https://www.newsweek.com/california-flying-taxis-could-reality-1925918. and (2) FOX 26 Digital, Houston Airports Introduce Air Taxis with New Partnership, FOX 26 Houston (June 17, 2024), https://www.fox26houston.com/news/houston-airports-introduce-air-taxis-new-partnership.
3. Federal Aviation Administration, Integration of Powered-Lift: Pilot Certification and Operations; Miscellaneous Amendments Related to Rotorcraft and Airplanes – Final Rule, FAA RIN 2120-AL72 (Oct. 22, 2024), https://www.faa.gov/sites/faa.gov/files/2120-AL72_Integration_Powered-Lift_Pilot_Certification_and_Operations_Miscellaneous_Amendments_Related_to_Rotorcraft_Airplanes_Final_Rule.pdf.
4. Federal Aviation Administration, State and Local Regulation of Unmanned Aircraft Systems (UAS) – Fact Sheet (July 14, 2023), https://www.faa.gov/sites/faa.gov/files/State-Local-Regulation-of-Unmanned-Aircraft-Systems-Fact-Sheet.pdf.
5. Federal Aviation Administration, Advanced Air Mobility Implementation Plan: Near-Term (Innovate28) Focus with an Eye on the Future of AAM, Version 1.0 (July 2023), https://www.faa.gov/sites/faa.gov/files/AAM-I28-Implementation-Plan.pdf.
6. Marsh, Cyber CAT, https://www.marsh.com/en/services/cyber-risk/expertise/cyber-cat.html (last visited June 20, 2025).
7. Fed. Aviation Administration, Safety Management System (SMS), https://www.faa.gov/about/initiatives/sms (last updated Aug. 2, 2024).
8. Brian Garrett-Glaser, Breaking Down the FAA's V1.0 ConOps for Urban Air Mobility, Avionics Int'l (July 13, 2020), https://www.aviationtoday.com/2020/07/13/breaking-faas-v1-0-conops-urban-air-mobility/.
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