XPONENTIAL is billed as the top-shelf yearly showcase for uncrewed technology, and this year’s show which just concluded in San Diego did not disappoint. I am a big fan of the event and a loyal repeat customer. (This was PteroDynamics’ fourth time exhibiting.) Upon reflecting on my experience and the conversations I had with customers, suppliers, engineers, unmanned aerial systems (UAS) operators, and government representatives, I am struck by the differences I observed this year. Some are subtle, others are not. 

To sum it up, there was no lack of excitement, but current and future UAS operators are more focused than ever on building profitable business models with these novel solutions. The UAS industry is moving away from the exhilaration and lofty expectations of the early years to a more mature, rational business perspective. This is very positive news. 

The foot traffic at PteroDynamics’ booth was terrific. We were pleased at how impactful it was to have our Transwing aircraft on the floor for attendees to see up close the wings fold and unfold. Unlike previous years, conversations moved from what could be accomplished with such a unique aircraft to keen interest from current operators like Skyports in aircraft from UAS OEMs.

Here are my top five takeaways for the UAS industry from XPONENTIAL 2024:

1. More About the Missions and the Capabilities to Accomplish Them, Less About Flying: Five years ago, the industry embraced a youthful optimism about novel technologies, accompanied by lofty expectations. Today, it’s more about what can be accomplished with flying, not just the novelty of automated UAS flight. There’s increasing demand for more capable UAS aircraft to execute specific missions.
   
2. Market Demand Is Moving Toward More Sophisticated Use Cases: Large multinational companies are looking to use UAS aircraft to execute important missions more efficiently. I see the market moving away from last-mile delivery of consumer goods toward more sophisticated use cases, like delivery of critically needed materials at sea.
   
   For instance, the market opportunity for highly capable vertical takeoff and landing (VTOL) aircraft to automate resupply missions for offshore energy providers or commercial shipping is tremendous. One oil and gas executive told me a story at the show. He said costly repair work involving ball bearings on an offshore oil rig came to a screeching halt because they were missing a critical part – a low-cost O-ring that they didn’t realize they needed until they were well into the repair. Scheduling an ad hoc delivery by helicopter to a destination more than a hundred miles at sea is complicated and expensive. Autonomous UAS can provide a practical, inexpensive solution to deliver parts like these within hours.
   
3. Performance of UAS Aircraft Matters More Than Ever: With increased interest in more sophisticated missions, operators need UAS aircraft capable of executing specific requirements better and more efficiently. That means operational performance will differentiate market winners. PteroDynamics’ Transwing® aircraft’s revolutionary design combines the speed, range, and endurance of fixed-wing aircraft with superior VTOL performance. This allows it to overcome the inherent limitations of other VTOL designs, making it ideal for automating time-sensitive delivery of critical, high-value payloads to remote locations without airstrips in austere conditions, such as at sea.
   
4. Operators Know Profitability Depends on More Than UAS Technology: Factors other than technology – especially operational efficiency – play an outsized role in making an aircraft a commercial success. For example, better cars did not make Uber a success, but operationalizing the rideshare concept did. In our industry, broader market adoption means supporting the regulatory environment and building aircraft that can be certified quickly and can fly safely and efficiently in the intended environment.
   
   In addition to its performance characteristics, an aircraft’s reliability, availability, maintainability, and safety ultimately dictate operational effectiveness and thus its commercial success. It’s important to remember that the purchase price of an aircraft is a fraction of the overall cost of ownership. This fact is not lost on operators that are now looking more closely at UAS aircraft to fill important mission needs.
   
5. Interest is Keen from a Growing Number of Operators Outside the U.S.  In Latin America and Asia in particular, governments are proactive in nurturing the UAS industry. UAS operations and innovation are taking root in countries like Mexico, Brazil, Singapore, and Spain with companies like Speedbird Aero and Aerialoop. Operators in these countries are flying now, and many have built their own aircraft. This year at XPONENTIAL, many operators were looking for new UAS OEMs. 

My observation from XPONENTIAL 2024 is that a more rational, business-focused point of view is emerging on use cases for highly automated UAS aircraft, and what it will take to operate them profitably. This is a very positive sign that the industry is maturing. UAS manufacturers that develop aircraft to solve important problems for operators better and cheaper than conventional solutions will generate profit for the entire industry – from OEMs to suppliers to operators and investors.