Volocopter and Lilium Insolvency: What This Means for AAM’s Future

The advanced air mobility (AAM) sector is facing another wave of turbulence as two of Germany’s most well-known electric vertical takeoff and landing (eVTOL) developers, Volocopter and Lilium, struggle with insolvency. While both companies were seen as pioneers in urban air mobility, financial challenges have brought them to a standstill, raising concerns about the viability of the broader industry.

Volocopter Lays Off Entire Workforce as Insolvency Proceeds

Volocopter, once a frontrunner in the race to launch commercial eVTOL services, has laid off its entire workforce as insolvency proceedings move forward. The company filed for insolvency on December 26, 2024, and a court in Baden-Württemberg has now confirmed the start of legal proceedings, allowing creditors to submit claims. As a result, nearly 450 employees were let go on March 3, 2025.

The news of Volocopter’s layoffs did not come as a shock to industry insiders, as financial struggles had been evident for some time. Despite raising significant investments over the years and securing partnerships with major cities and airports, Volocopter faced increasing pressure to meet certification milestones while maintaining cash flow.

Lilium’s Financial Setback: The Second High-Profile German eVTOL Insolvency in Weeks

Just weeks before Volocopter’s layoffs, Lilium also entered insolvency, marking its second financial crisis in less than four months. The company, known for its ambitious five-seater Lilium Jet, failed to secure a critical €200 million investment from a European-American consortium, ultimately halting operations on February 23, 2025.

Lilium’s challenges stemmed from a combination of high development costs, delays in aircraft certification, and an overall decline in investor confidence in the AAM sector. While the company had made significant technological advancements, its financial runway was insufficient to sustain operations.

A Tough Job Market and the Reality of AAM’s Survival

These back-to-back insolvencies highlight a broader issue within the AAM sector: not all air taxi companies will survive. While the promise of urban air mobility remains compelling, the financial burden of bringing air taxis to market has proven to be a significant hurdle.

For employees in the industry, the situation is especially dire. The job market has been exceptionally tough since early 2024, not just in AAM but across multiple sectors. Layoffs, hiring freezes, and even fraudulent job listings have made it increasingly difficult for professionals to secure stable employment. Companies that once aggressively hired top talent for AAM projects are now downsizing or shutting down completely. Employees with specialized skills in eVTOL technology, electric propulsion, and urban air mobility now face limited opportunities, forcing many to reconsider their career paths.

It was always understood that the AAM sector would eventually consolidate, with only a few companies successfully navigating the journey to commercialization. However, this does not make the financial troubles of companies like Volocopter and Lilium any less disappointing. The industry is witnessing years of effort, innovation, and skilled labor being lost as once-promising startups struggle to survive.

While we remain hopeful that some air taxi developers will successfully bring their aircraft to market, these recent insolvencies serve as a sobering reminder of the financial realities of the industry. Those who remain in the game must not only prove their technology but also secure long-term financial stability—because, in AAM, great ideas alone are not enough to fly.