U.S. Slowly Opening Up Commercial Drone Industry

Channels Television  
Updated August 9, 2013

The Federal Aviation Administration’s recent certification of two expensive unmanned aircraft for commercial use further opens up the U.S. market for drones, but cheaper unmanned aerial vehicles (UAVs) will still have to operate in regulatory limbo.

The drone industry was heartened by the FAA’s decision in late July to greenlight Boeing Co’s (BA.N) Insitu ScanEagle and AeroVironment Inc’s (AVAV.O) Puma, in the first such U.S. certification of drones for commercial use.

These remote aircraft weigh less than 50 pounds 22 kilograms), have wingspans of about 4.5 feet and come with a hefty estimated price tag of $100,000 each.

Their approval is seen as a first step in unleashing a potentially multibillion-dollar industry that so far has been largely limited to military and law enforcement applications.

In the meantime, however, dozens of companies are chomping at the bit for the FAA to certify their own more affordable drones, saying there is no way farmers and many others can invest in the type of UAVs that received certification last month.

The Association for Unmanned Vehicle Systems International (AUVSI), an industry group, hailed the FAA’s certification of the two drones. “This is a huge step forward and this is a big deal for our industry,” said Ben Gielow, government relations manager for the group.

Congress in early 2012 passed legislation calling on the FAA to write rules by 2015 that would govern the commercial operation of drones that can be used for everything from spraying pesticides on farmland to catching exotic-animal poachers to monitoring sport events.

Aviation and aerospace industry research firm Teal Group has estimated that annual spending on drones around the world will almost double to $11.4 billion by 2022. AUVSI has estimated the industry could contribute more than $80 billion to the U.S. economy over a decade.

The FAA is taking a cautious approach to the controversial aircraft. The U.S. government’s use of weaponized drones to remotely kill foreign combatants has sparked a fierce debate, while privacy advocates fear a commercial explosion of big-brother-like drones.

Rory Paul, chief executive of Volt Aerial Robotics, a St. Louis-based company, said the efficiency gains from using UAVs to scout and map farmland have prompted some farmers to use lower-priced drones in spite of FAA regulations.

“The FAA doesn’t have inspectors running around the heartland looking for people with UAVs,” Paul said.

Paul has provided a number of farmers with his company’s Octane quadcopters, which cost $10,770 each. He also sells a fixed-wing UAV called the WaveSight for about $50,000.

The FAA says it will try to stop unauthorized commercial activity if it becomes known but adds that it will resort to civil penalties only in extreme cases.

“We really would only pursue a civil penalty if someone was operating an unmanned aircraft in a reckless manner,” said FAA spokesman Les Dorr.


The FAA’s interest in nudging along the commercial drone industry predates the 2012 legislation.

The agency in 2009 created a Unmanned Aircraft Program Office to better organize its certification process, and in March of this year said it is still developing a plan to speed integration of civil drones into the national air space.

To date, the FAA has mostly issued certifications for public safety and law enforcement purposes, including firefighting, border control and search-and-rescue missions.

As of February 15, 2013, there were 327 active drone certifications. But once a regulatory framework is in place, the FAA estimates, 7,500 commercial drones will be viable within five years.

The FAA called its certification of the ScanEagle and Puma a “giant leap” in the commercialization of drones.

In a statement after it certified the Boeing and AeroVironment drones, the FAA said a major energy company plans to fly the ScanEagle off the Alaska coast in August to survey ice flows and whale migration in Arctic oil exploration areas. The Puma, meanwhile, will be used for oil spill monitoring and wildlife surveillance over the Beaufort Sea in the Arctic Ocean.

Oil major ConocoPhillips (COP.N) confirmed it has been working with the FAA on the “regulatory and safety aspects” of unmanned aircraft but deferred further explanation until later this summer.

In its next major step, the FAA is expected later this year to announce six test sites for unmanned aircraft, completing another requirement of the 2012 legislation.

Still, not everyone is happy with the FAA’s pace. Gielow from the industry group AUVSI said that despite the FAA’s commitment to the sector, he is concerned that the agency is not on track for the 2015 congressionally mandated target.

And Paul of Volt Aerial Robotics said the FAA has not yet done enough to tap into one of the biggest customer bases – farmers. “(The FAA) thinks they’re going to have systems like the ScanEagle operating in agriculture, but that’s not the case,” Paul said. “They’re simply too expensive.”