hmm... I tested this specifically using an OUYA with an OUYA controller and I didn't have any issues. Just to confirm, you are holding the O button (or U, Y, A) moving the joystick around and then releasing O? You don't get direct controller over over the planes, just the ability to create a flight path for them. You should see a yellow line appear from the plane to indicate the flight path you have made for them.
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Hey Sam, I uploaded a debug version of the game (see the separate download that says debug). It just outputs some extra info about the inputs being received. If you want to give it a shot and let me know what it says under AXIS as you rotate the joysticks around (one at a time with no buttons pressed) would be really useful for figuring out what it different about our OUYA controllers and how to fix it. If you're not feeling up to it no worries.
If you are, I'm really only interested in what appears for AXIS. On mine I get 0 and 1 on the left stick and 11 and 14 on the right stick. I'm curious if you get different numbers on your controller.