23 Mar 2015

The Drone Revolution

There’s been a lot of “buzz” about the future of drones in the National Airspace System.  Drones have the potential to be an efficient, cost-effective alternative to missions flown by manned aircraft. And now, with the FAA performing what many see as an about-face last month, the use of small drones may be right around the corner. Gregory S. McNeal, Pepperdine University professor of law and public policy, details the new drone regulations being considered by the FAA in his Forbes article “FAA Takes A Huge Step Toward Allowing Drone Flights In America.”

 

Drones are proliferating at an amazing rate.  Compare the number of drones to the number of commercial airliners operated by the four largest airlines in the United States.  These airlines operate 4,728 aircraft.  By FAA estimates, over 7,500 drones will be flying around America’s skies by the year 2020.  Another consulting group puts the number of commercial drones operating in the U.S. at over 10,000.  And add the hobbyists to that number as well – one drone manufacturer alone has sold over 670,000 drones to hobbyists in the past four years, worldwide. In response to this proliferation, Congress had imposed a requirement on the FAA to create rules for unmanned aircraft by this year.

 

Safety is the primary concern of regulators.  In the past ten months there have been over 200 documented cases of near misses between drones and manned aircraft.  Many of these occur near airports, where the potential of a drone bringing down a commercial airliner is very high.  Many of these drones do not have any kind of collision-avoidance system, and cannot operate autonomously. The proposed FAA regulations, which address the use of drones under 55 pounds, tackle this problem by restricting their flight paths and requiring continual visual line of sight by the drone’s operator.

 

These unmanned aircraft flights must take place during the day below an altitude of 500 feet and a speed of 100 mph. Additional rules designed to minimize risk include banning flight over people not involved with the drone’s operation and placing the onus for avoiding collisions on the operator. Operators will need to be at least 17 years of age, pass an FAA test and be vetted by the TSA, among other requirements.

 

These regulations won’t go into effect immediately. They are currently open for comment.  Once the comment window closes, it will likely take several months to process them. Therefore, it will be about 18 months before the FAA enacts the new regulations.

 

With this news, it will be interesting to see how investors react over the next year.  The range of drone applications is endless – package delivery systems, power line inspections, GPS mapping, farming applications, and so on.  They have the potential to generate $13.7 billion in America’s economy and create over 70,000 jobs within the next three years.  It could provide an economic boost that America needs, but it’ll require due diligence first.

The entire article can be found at “FAA Takes a Huge Step Toward Allowing Drone Flights In America.”