THIS ROBOT ELECTRIC CARGO PLANE COULD BE THE START OF A WAVE THAT TRANSFORMS SHIPPING

January 30, 2023, 07:00am EST

Michael Norcia says he wasn’t planning to make a cargo plane. When he started Pyka in his parents’ Bay Area garage in 2017, the game plan was to build an electric autonomous crop sprayer as a stepping stone toward the holy grail many aviation startups are pursuing: zero-emissions, unpiloted passenger aircraft.

Norcia and his cofounders decided that crop spraying offered better initial business prospects than hauling cargo, in part due to fewer regulatory and safety concerns. Flying over farm fields, a crash would only harm produce, not people.

But after early success in 2021 spraying banana fields in Costa Rica with Pyka’s Pelican plane, Norcia tells Forbes that companies looking for a big freight-hauling drone began knocking. “They kept coming back to us saying, ‘Your technology is further along than anyone’s. Can you retool this to make a cargo aircraft?’ ”

On Monday, Pyka unveiled a cargo version of Pelican with a maximum range of 150 miles when carrying a full load of 400 pounds. It has a sliding tray to load cargo through the nose into its belly, which has 66 cubic feet of interior space, enough to fit five soft-shelled e-commerce totes. Pelican Cargo had its first test flight in December, and Pyka expects launch customer Skyports will begin daily trial services in the U.K. to undisclosed offshore islands in the second half of 2023.

Norcia, the CEO of the Oakland-based startup, says it has 80 orders and options for Pelican Cargo from Skyports and two other customers it isn’t identifying. Some of the orders — a “minority,” Norcia says — are firm with deposits. One customer is looking to use the plane in the Caribbean. As with the crop sprayer, Pyka is leasing out the aircraft at terms it won’t disclose. The company says the electric plane’s low operating costs — expected to be $15 a flight hour due to lower energy and maintenance costs — and its ability to take off and land in just 500 feet on rough dirt or grass airstrips will enable it to serve remote communities that currently depend on boats or ground transportation for necessities.

Targeting isolated, under-served rural populations initially is the easiest way to get safety regulators to allow the robot airplane to fly, says the 30-year-old Norcia. It’s a step toward convincing officials that Pelican Cargo is safe enough to serve more populated areas.

“Delivering e-commerce packages in two hours instead of ten hours is a small, incremental benefit to perhaps a billion people,” he says. “But it’s harder to get approval for that than an enormous benefit to, you know, a thousand people.”

Norcia says that whoever has success in hauling cargo with autonomous electric aircraft will likely be the winner of the passenger market as well. “It’s just a very logical progression to go from accumulating millions of flight hours in the cargo space to then moving up in a sort of tier of total risk to the passenger-carrying space,” he says.

Plenty of other envelope-pushing aviation startups have targeted the cargo market, both as an intermediate step toward passenger planes and as an end goal. Vermont’s Beta Technologies has sold UPS on trying out its piloted electric airplane, which can take off and land vertically like a helicopter. Beta is hoping to get safety approval to bring it to market in 2024. San Francisco-based Elroy Air counts FedExFDX -3.4% as a launch customer for its hybrid-electric cargo drone, with trials planned in Dallas this year. Fellow Bay Area startup Xwing wants to robotize existing small planes like the Cessna Caravan to deliver freight.

All are trying to lower costs, through electrification or by removing the pilots, to make airborne freight price-competitive over short distances with trucking. The regional air cargo market is limited currently to $50 rush envelopes or urgently needed supplies, says Robin Riedel, an aviation consultant with McKinsey. “There aren’t many people willing to pay ten times more to save a couple of hours over ground,” he says. The old, fuel-guzzling turboprops that are used for short-haul cargo typically fly one round-trip a day between a secondary city and a hub where packages are collected for sorting.

But there’s real possibility for disruption, in two ways, Riedel says. If the new electric aircraft turn out to be as cheap to operate as promised, they could enable more cargo flights a day between small communities and hub airports. And their ability to land in places where current airplanes can’t, such as parking lots of warehouses and factories, could lead to a reshaping of delivery networks.

One of the biggest factors in whether Pyka and other drone cargo delivery aspirants can lower costs is how many people will be required to look after their aircraft. Currently regulators are expecting one safety monitor to oversee one drone at a time. To cut labor costs, Pyka and others have to convince regulators that one person can safely oversee multiple aircraft simultaneously. (McKinsey has modeled out how much that means for the operating costs of small, single-package delivery drones.)

Norcia says what separates Pyka from all the other electric aviation contenders is simple: it’s the only company commercially operating a large autonomous electric aircraft.

Pyka currently has five crop sprayers flying in Central America. Since July 2021, it’s been conducting trial services for an unnamed company Norcia describes as “one of the largest banana producers on Earth” and recently started working with another. He says both are interested in scaling up to about 100 aircraft each. Pyka, which raised $37 million in Series A funding last year, plans to expand to other Central American countries where its customers have plantations, as well as Brazil.

U.S. regulatory approval has been slow in coming. In 2020, Pyka was hoping the Federal Aviation Administration would grant it an exemption by year-end from rules for piloted aircraft operations to conduct crop spraying under the oversight of a safety monitor. It’s still waiting. Norcia says the FAA hasn’t asked for any additional documentation or testing. He says the holdup is a byproduct of the FAA’s slow pace in drafting new regulations covering drone operations, which has left Pyka and other drone operators waiting for multiple FAA offices to consider whether to sign off on whether to exempt them from existing rules for conventional planes. “It’s an issue pretty much every commercial drone [maker] here in the States has faced,” Norcia says.

While Pyka has been able to gain experience by flying in other countries, other companies like Elroy and Beta are looking to start flying sooner through the Air Force’s Agility Prime program, which is testing out military uses for commercial electric aircraft.

Electric aircraft developers may be frustrated by the FAA’s slowness in drafting new regulations, but Riedel says the agency shouldn’t be faulted for taking its time weighing the risks. “In the interest of all of us on the ground, it's good,” he says. Plus, given the newness of the technology, rapid rulemaking could result in ill-fitting requirements that hold the industry back, he points out. “By putting out regulation too quickly you might actually stifle innovation.”