We know that companies such as Tesla (TSLA) and General Motors (GM) are working on driverless cars. Could we someday see American Airlines Group (AAL), United Continental Holdings (UAL), and Delta Air Lines (DAL) fly pilotless planes?
It doesn’t seem likely, at least anytime soon. Driverless cars haven’t proven they can safely maneuver through the streets, and with the stakes higher for passenger planes, who’d want to take the risk. But there is a step in between. Most passenger planes require two pilots, and just reducing that to one pilot could be a $15 billion “profit opportunity,” according to a new UBS report. Nor is it that far off. UBS estimates that the technology that would allow commercial airlines could go to one pilot could be ready by 2023, while the technology for pilotless planes could be ready by 2025.
In fact, the only thing standing in the way of one-pilot flights might be the passengers. UBS notes that previous changes–from propellers to jets; from three to two pilots; from two- to four-engine widebody planes; and to composites from metals–usually take five to seven years. Airlines such as United, Delta, and American could hasten the adoption of single-pilot planes by offering cheaper tickets, UBS contends. The biggest beneficiaries would be the airlines that have the most long-distance flights, including American, Delta, IAG (ICAGY), Lufthansa and United. “In our view, the market is not currently pricing in any benefit for airlines or aerospace companies,” lead author Celine Fornaro explains.
Shares of American have advanced 0.4% to $36.48 at 11:53 a.m. today, while United has gained 1.2% to $71.88, and Delta is little changed at $50.71.
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