Merlin Labs shifts autonomous flight focus to large US

Merlin Labs has withdrawn its application to certify its autonomous flight system on small aircraft in New Zealand. The company is now focusing on equipping large aircraft with its AI Pilot system for the U.S. Market. This strategic pivot is driven by major military contracts and the goal of addressing a looming commercial pilot shortage.

Its flagship product is the Merlin Pilot, an aircraft-agnostic AI system designed to operate aircraft from takeoff to landing using onboard software and sensors. The company formally withdrew its small aircraft Supplemental Type Certificate application with New Zealand's Civil Aviation Authority on September 9, 2026. Merlin Labs said: "It's aimed squarely at the US market."

Condor system targets cargo market with phased crew reduction

In May 2026, Merlin announced Condor, a variant of its Pilot system adapted for commercial cargo operations. The system is designed to work initially alongside full flight crews. It could later eliminate the need for augmented crews on longer flights. Merlin aims to eventually enable single-pilot crews and fully autonomous flights, starting with cargo operations.

Defense contracts drive USAF and SOCOM integration efforts

Substantial U.S. Military contracts are shaping the company's direction. Merlin has a contract with the U.S. Air Force for AI co-pilot systems developed in collaboration with General Electric. A separate contract covers testing the Pilot on the Boeing KC-135R Stratotanker.

The most significant deal is a contract from U.S. Special Operations Command worth up to $105 million. This contract is for integrating the Pilot into the Lockheed C-130J Super Hercules. Flight testing for these USAF programs is expected to commence soon after system integration and initial testing are complete. Currently, the Pilot serves as a co-pilot in USAF operations, with one crew member still onboard.

New Zealand trials continue amid regulatory pursuit and Textron partnership

Despite the strategic shift, testing in New Zealand continues. Merlin has logged hundreds of autonomous flights there over the past few years. The company originally hoped to introduce autonomous commercial flights in New Zealand by 2027.

It has partnered with Textron to evaluate the Pilot system on Cessna Caravans and Beechcraft King Airs. Merlin continues to seek certification from the New Zealand Civil Aviation Authority for its Pilot system, even after withdrawing the small aircraft STC application.

System positioned to address pilot shortage despite regulatory barriers

The company argues its technology is a necessary response to a critical industry challenge. Merlin claims the U.S. Could face a shortage of over 30,000 pilots by 2032. The company states there are over 7,000 large commercial transports in the U.S. Fleet. Merlin argues the Pilot system will deliver massive cost savings for airlines.

Substantial regulatory hurdles stand in the way of its single-pilot vision. FAA regulations require at least two pilots onboard commercial flights using large aircraft. The U.S. Has codified this two-pilot requirement into law, effectively banning single-pilot operations. The FAA also prohibits extended Minimum Crew Operations, where only one pilot is in the cockpit during cruise on long-haul flights.

European regulators share this cautious stance. EASA prohibits single-pilot operations in commercial airliners and recently concluded that extended Minimum Crew Operations would be unsafe with current cockpit technologies. Insurance presents another barrier. Rates are significantly higher for single-pilot operations under FAA Part 135 rules, leading operators to staff with two pilots despite certification. Merlin aims to eventually enable single-pilot crews and fully autonomous flights.