control ready to taxi.

Xwing caravan clear for takeoff.

This plane just took off on its own.

Don't have to do a thing.

There's a pilot in the cockpit but everything on this Cessna

Grand Caravan is automated. Xwing, a start-up in the Bay

Area took CNBC up for a test flight, where the pilot didn't

touch the controls once.

Xwing is a technology startup that develops technology to

automate aircraft.

Over the past 100 years, the technology inside airplanes has

become more and more advanced, from jumbo jets to smaller

cessnas. Most of the flying happening today has a high level

of automation, but pilots are still doing a lot of work. On

commercial flights, for example, pilots are telling the

autopilot what to do, you don't just set it and forget it. But

some see the next step to full automation as removing the pilot

completely. Reliable Robotics is another Bay Area start-up

working on doing just that.

We started Reliable Robotics to create a new type of airline. An

airline where instead of having pilots in a cockpit, you have

pilots in a control center.

Rose previously worked directly with Elon Musk on Tesla's first

version of autopilot.

We're definitely going to see autonomous aircraft well before

autonomous driving at scale. Driving has a huge number of

technical challenges as well as regulatory challenges. Whereas

with aviation, it's a much more tractable technical problem and

you have a regulatory environment that is ready to go.

Boeing recently demonstrated a successful autonomous flight of

its loyal wingman fighter jet, and Airbus recently performed

fully autonomous test flights on one of its larger commercial

aircraft. The technology is here, we want it to explore how

it works, and when pilotless planes will become the norm.

Before we look at what's happening today, let's take a

quick look back at how we got here. In 1903, the Wright

brothers took their first powered flight, and a few short

years later, the first iteration of autopilot was created.

Laurence Sperry's gyro stabilizer helped automatically

balanced the plane so the pilot wouldn't have to. Fast forward

to the 1950s and the rise of commercial aviation. At the

time, five people were needed in the cockpit to fly the plane.

Two pilots, a flight engineer, a radio operator and a

navigator. That number decreased over the next few decades.

In the late 70s and early 80s. We went from three crew to two

crew. The level of automation today, of course is much greater

in terms of what the workload of that crew actually looks like.

One of the first digital autopilot systems was used in

the lunar module that landed Apollo astronauts on the moon.

Although Neil Armstrong had to turn it off to land in a safer

area on the moon surface. Then in the 70s, NASA introduced

digital fly-by-wire systems. Fly-by-wire is basically

utilizing electronics rather than cables and pulleys, so to

speak, to manipulate flight controls. It's practically

instantaneous as it has to be.

The F 16 fighter jet was the first mass production

fly-by-wire jet. And that was a major breakthrough and it is now

inconceivable that a jetliner would be designed without

fly-by-wire flight controls

Autopilot evolved into higher levels of automation. The

military has flown remotely operated drones since World War

Two, and has continued to improve the technology. But

these military drones are not built to fly people and often

require video streams for remote operators to fly them. One

reason the military has continued to work on this is for

safety. The constant adjustments a computer makes versus a human

ensures for a much smoother and safer ride. 2017 was the safest

year in aviation worldwide on record. In the US, there has not

been a fatal crash since 2009. Here's how Reliable Robotics and

Xwing's technology works. Both companies have developed

software that allows them to remotely operate the plane from

the ground, if anything were to go wrong.

There's no joystick, you're not remotely sticking the plane with

our system, we give the remote pilot essentially an interface

that lets them specify all of this information. Load it all

into the system and then press execute. And then that is then

transferred through a SATCOM link up to the aircraft,

You can make an aircraft autonomous, that aircraft still

needs to communicate to the to a human, that human is the air

traffic controller. Those operators don't fly the

aircraft. Initially, they're going to be pilots because they

need to know how to communicate with air traffic control and how

these aircrafts integrate in the airspace. But they don't need to

know how to fly or land or take off. That's done entirely by our

system.

Reliable Robotics already did a test flight without anyone in

the aircraft and we got to go up with Xwing on one of its test

flights. The remote operator initiated our takeoff and off we

went. Do your instincts want to grab the yoke. To be

honest it was very alarming the first time it landed itself.

Even though the plane is flying on its own, a safety pilot must

still be on board.

So what we've done here is every time a pilot is involved

interacting with the aircraft, we've automated that

interaction, whether it be the throttles the brakes, the

control surfaces.

So we just got back from a fully autonomous flight with Xwing.

And my first impressions are that it was pretty normal, the

controls and the yoke were moving around by themselves. But

besides that, it felt like a normal flight. You know, I was a

little anxious going into this, knowing the pilot wasn't going

to actually do anything. But overall, it wasn't scary at all.

The planes are rigged with cameras, LIDAR and software

among a few things that can identify other aircraft and

detect potential issues. Rather than build a new plane, both

companies converted a Cessna Grand Caravan.

It's a lot easier and quicker to start with a tried and true

platform and make modifications to it to convert into an

unmanned aircraft than is to start from scratch. You can

already make all the assumptions around the airplanes air

worthiness, it has a track record of safety. And we can

really focus with the regulator on what modifications were made

to the aircraft to convert into an unmanned aircraft.

There obviously is a lot of energy right now going into

electric, vertical takeoff and landing urban Air Mobility,

advanced term abilities, but those aircraft have a ways to go

and they have their own technical problems that need to

be overcome. When we started the company, we decided that solving

the regulatory challenges was what was going to be our unique

differentiator. And you don't need to invent a new type of

aircraft to solve the regulatory challenges related to autonomous

operations.

I think a great deal has to do with where these systems are

being operated and less about the systems themselves. If we're

talking about operations over long rural, relatively

uninhabited regions, you know, that's going to be a lot easier

than vertical operations in urban areas. So when you see

systems proven, it's probably going to be more in that rural

setting, rather than in something urban.

Both companies are not able to operate its pilotless planes

commercially yet, because they're still working on getting

approval from the Federal Aviation Administration.

The nice thing about the FAA is that it does provide some

flexibility for you to be able to design a system to get to

those levels of safety and still fly it as you're designing. This

used to be a type certified aircraft or commercial aircraft,

that we downgraded to an experimental aircraft so that we

could do a lot of flight tests without needing to demonstrate

that level of safety prior to doing some of those flight

tests.

We gave the FAA a very thorough rundown of every aspect of our

system, and how we intended not only to develop it, but also

operate it and then show through test and analysis that it would

be safe to do so.

Similar to self driving cars, self flying planes will also

need lots of data.

We've been flying commercially with piloted aircraft on the

cargo side for larger logistics companies since December of last

year. This allows us to collect data along commercial routes at

scale that feeds into the training or algorithms, but also

the certification program.

Data helps algorithms learn how to deal with all situations,

including emergency landings. One of the problems that you

need to solve in automating an aircraft through all phases of

flight is you need to look at what could possibly go wrong in

each phase, and you have to methodically break down all of

these potential failures and develop a mitigation for every

single one of those failures. One advantage of an automated

aircraft system is it can recognize anomalous behavior

much faster, then an onboard human might recognize and then

respond to it much faster. So if you have for example, an engine

failure, we can trip an alarm immediately and then begin

executing an emergency response procedure. So the aircraft will

immediately get into a most desirable or safe configuration.

Notify the remote pilot who then in turn can notify air traffic

control, and then the remote pilot can help guide the

aircraft towards a desired emergency landing location.

Both companies aim to bring autonomous planes to the air

cargo industry first. The Global Air Cargo market is expected to

grow from $56.48 billion in 2020 to 99.67 billion in 2025. Both

plan to first fly cargo to remote areas in smaller planes.

Cargo stands out as the biggest opportunity space, specifically

small cargo planes, these planes tend to serve communities that

without air wouldn't be served otherwise. And for these types

of groups, we can serve them at a lower cost and higher

frequency than what they'd enjoy today.

Reliable Robotics is testing with a FedEx owned prototype.

FedEx, UPS, DHL, etc. have actually been looking at

automating these planes for quite a long time and they've

been looking for solutions. That aircraft like the Cessna Caravan

is by the numbers the world's most popular cargo plane. FedEx

operates over 230 of these in the US alone. UPS through a

bunch of partner companies has several 100 themselves as well.

Rose, who is also a pilot worked at SpaceX before he worked on

Tesla's autopilot.

I previously had automated fully autonomous spacecraft that that

went to the ISS at SpaceX, it could go to the International

Space Station with no human intervention. I'd worked on self

driving cars at Tesla that could go 70 miles an hour down the

280, thinking, why hasn't anybody done this in aviation?

Clearly, we possess the technology. Why can't regular

people experience automated flight? And the simple answer

is, it's really the regulatory environment is not there yet.

Though the companies are starting with cargo, the long

term plan is to carry passengers as well.

There's currently about 30 airports that make up 70% of air

travel, we're gonna see smaller aircraft flying at higher

frequencies. Out of more municipal regional airports, we

actually have 5000 airports in the US available for public use

today. But in order to use those, you either need to be a

private pilot or you need to be exceptionally wealthy. And what

automation will enable you to do is by lowering the cost of

getting into air travel will be able to build systems that work

much like an on demand ground transportation system like Uber

or Lyft. This technology

has the potential to open up a brand new market and

significantly scale, you know, grow that market.

Neither company knows when they will get approval, but both are

optimistic it will be in the next few years. But when will we

see commercial flights without a pilot? Though autopilot is very

advanced commercial flights still require two pilots in the

cockpit.

The level of automation in commercial aircraft, even in a

corporate aircraft is highly sophisticated, we can program

the airplane to take off and and especially to land all by

itself, we need to put the gear down and we need to put the

flaps down and that's essentially all the pilot really

has to do if it's programmed appropriately.

Airbus has conducted fully autonomous flight tests on it's

a350, which is a lot larger than the cessnas Xwing and Reliable

Robotics are testing. The wide body jet achieved autonomous

taxiing, takeoff and landing. Boeing has a number of defense