Do you have the same issue if you follow the OP’s steps to reproduce it?
Yes
Provide extra information to complete the original description of the issue:
I am facing the same issue on XBOX Series S, and it could be reproduced also on PC when XBOX gamepad is connected to PC via Bluetooth.
If relevant, provide additional screenshots/video:
If on PC, Fault Bucket ID - Please type in just the Fault Bucket ID # rather than a screenshot for privacy reasons:
1789449936950053112
I have been facing the same issue on my Xbox Series X, and I may have found a fix (or at least worked for me). Would like to thank @TyingTunic30431 for mentioning:
I am facing the same issue on XBOX Series S, and it could be reproduced also on PC when XBOX gamepad is connected to PC via Bluetooth.
This game me an idea, I started the game on Xbox with my controller disconnected from the Xbox (was connected to my pc but turning off the controller works), and had a keyboard and mouse connected. With that, the game starts and runs fine, so it seems like an issue with the controller in some way. When on the main menu and I connected my controller, it crashed straight away.
I then delated all of the control profiles for the mouse and the keyboard, so the only profiles left were the default built in ones (which you can’t delate), this is doing using the preset manager on the controls screen (button is at the bottom next to “go back”). I also cleared and disabled the rolling cache, but unsure if that was actually needed.
Then did a quick flight with a different plane to force it to sync (unsure if needed) (also using a different plane allows you to check if it did as when you next go to world map it uses the plane you used last), before clicking on my profile in the top right corner to sign out (again, probably not needed but I wanted to make sure it synced).
I then quit the game, started it on cloud gaming on my pc (since that does work), and did the same again, clearing the controller presets/profiles, quick flight to ensure it syncs, signing out, etc.
After that, I started it again on my Xbox with only keyboard, after loading into main menu, I connected my controller, it did not crash and it all worked, flying etc. I then restarted the game to verify, and with controller connected it did not crash. So this has seemed to have fixed the issue for me (or at least for now).
Based on that, seems like to me the problem is the controller profiles are getting corrupted? But that doesn’t explain why cloud gaming still works, and I never had an Xbox controller plugged in while playing on PC. 
I would assume all of that would not need to be done, and maybe just clearing the controller profiles using cloud gaming is enough?
On @shoot1009146 's idea, I tried clearing controller profiles in cloud gaming.
Then XBOX is working fine with the pad now!
Does it delete your purchases (planes and scenery etc.) cause I couldn’t care less about the progress and hours lol, just I want to be able to keep the planes I’ve already bought
Do you have the same issue if you follow the OP’s steps to reproduce it?
Yes
Vanilla Xbox X install via Game Pass. Crashes every time after ‘Press a button to start’. Worked fine yesterday, i.e. 12 hours ago. No changes made by me.
Found that if I power off my Xbox controller and plug in a keyboard, the game runs.
But that’s not a practical solution.
If I connect the Xbox controller, the game instantly crashes.
Something’s badly wrong if fundamentals like this don’t work.
Edit due to post limit:
Looks like @shoot1009146 has found a bug.
I deleted my controller profile on my other Xbox and now it’s working again on my primary Xbox.
Hope they fix this soon.
Hi folks! Almost got desperate about the solution of the same issue, but the last posts inspired 
In my case:
So, it becomes obvious that the customized gamepad profile is causing the issue << this is the MS team care to read this and fix!!
I believe, the simplest solution is:
disconnect the pad,
start the game with something else (keyboard (or probably another pad - I have not checked this)),
delete customized profile for controller and then switch the controller ON, choosing the default profile.
So glad I had not given up before I found this thread. Hope this will help others.
Some update with this bloody issue
After the manipulations I did before, EVERY time I had to implement the same actions, going through glitchy start screens of the game, hanging in load data and checking for updates (I managed to switch on/off wifi network on XBOX to pass them finally - there’s no clear instructions how to do this, just keep moving beween network settings and running game, finally it let’s you get in).
So, a final solution (hope so) is - to connect from PC to Cloud gaming with the pad connected to PC, then, probably, the sync replaces corrupted pad profile. Then, I’m able to use quick resume (it was previously absent) and play as usual from XBOX.
I can confirm this is “just” a customized controller issue. There’s one way to bypass the crash on Xbox:
After doing that, i went to my controller profiles and managed to delete one of them using the X button (Open preset manager), but when switching to the other custom one, it crashed the game. Maybe there is a way to do that one by one or something, but I resorted to uninstalling the game, launch it from Cloud and delete the profiles from the Cloud game.
I don’t have a PC but i am guessing if you do have one, simply launching the game from the PC and then deleting the custom controllers might do the trick.
It’s quite annoying but less than deleting a full 100+ hours of profile :).
Thanks everyone for the replies on the forum!