Commercial UAV Expo: Seeking monetizable opportunity

Last month I wrote about the drone industry experiencing giddy enthusiasm. One of the points I mentioned was the upcoming Commercial UAV Expo, in which there were predicted to be 100+ exhibitors and 500-700 attendees — an exhibitor-to-attendee ratio of 1:5-7,  an unusually low ratio for a conference. At INTERGEO in September, from where I wrote last month’s column, the ratio was 1:31.

Well, I attended the Commercial UAV Expo in Las Vegas last week. The organizers reported ~1,500 attendees instead of the predicted 500-700. Apparently, attendance even surprised the organizers because they ran out of attendee bags by the time I picked up my badge the day before the conference began.

It was a very good conference because there were legitimate users and potential users of drone technology. During sessions, the audience was focused, more so than at most conferences I’ve attended. I think the reason is clear. The audience, consisting of drone users, potential users and manufacturers, wants to know where in the rapidly developing drone market is there a chance to make money?

One of the more interesting presenters was Commonwealth Edison, an electric utility based in Chicago with more than 5 million customers. ComEd discussed its experience and applications for drones from substation tower inspections to transmission line surveys. A representative from CNN, the news organization, spoke about how they are using drones to capture images and videos of breaking news events such as the recent refugee crisis in Europe. Chad Colby, a farmer who claims more than 3,500 drone flights and is active on the drone conference speaking circuit, showed the audience the value of drones in agriculture, which is one of the no-brainer markets for drones. Presentations such as these and a handful of others struck home with the audience because they present meaningful, that is to say monetizable content.

Commonwealth Edison’s use cases for drones.

CNN use case for drones.

Chad Colby/Nolan Berg describe the impact of drones in the ag market.

Moving from current uses to future uses, British Petroleum (BP) displayed its drone wish list — likely one that most drone dreamers would like to see:

Platforms (hardware/software):

• Interoperability
• Continuous operation
• Autonomous air, land, water
• Robots that can maneuver around a facility
• Non-military pricing

Regulations:

• Tech standards — iSafe, ANSI, HSAC
• Beyond line of sight
• Data exchange formats
• Certification programs
• Night operations

Payloads:

• Miniaturized
• Varied – full EM spectrum, acoustic, gas sensing

Several of the items on BP’s wish list were recurring themes at the conference, with the big elephant in the room being beyond-visual-line-of-sight (BVLOS). The Federal Aviation Administration (FAA) has largely not allowed BLOS operations even for 333 Exemption holders like me. Following is an excerpt from the CoA (Certificate of Waiver or Authorization) issued by the FAA:

d. The PIC is responsible to ensure visual observer(s) are:
– Able to see the UA and the surrounding airspace throughout the entire flight

The Visual Line of Sight (VLOS) requirement seriously inhibits the value of drones for commercial use. When you consider that a rotorcraft (helicopter) might be less than two feet in diameter, it doesn’t have to travel very far before it’s difficult to see (without the aid of binoculars or similar devices, which are prohibited). However, rotorcraft are very flexible in that they can be controlled in a small area. They can hover and they can land in very small or constrained areas relatively safely. Fixed-wing (airplane) drones are a different story. At 30-50 miles per hour, it doesn’t take long for a fixed-wing drone to be out of VLOS. So, practically speaking, a fixed-wing drone for production-oriented flying is very limited, unless the operator disregards the FAA VLOS rule.

The other challenge with fixed-wing drones is the take-off, and more importantly, the landing space required to bring a fixed-wing drone back to earth in one piece. One fixed-wing manufacturer said you’ll need several hundred feet to land their aircraft, and that’s assuming a full payload (maximum weight). One has to wonder how fixed-wing drones will be deployed. One can quickly see how impractical it may be to launch a fixed-wing drone in something less than a city park, high school sports field or a crop field.

Ignoring the FAA VLOS (and other) rules is clearly what is happening. There is seemingly no constraint for manufacturers to tell prospective buyers “go ahead and operate on your own property, no one will care.” Farms, mining operations and some construction sites might be so rural that there’s not a human being in sight. In those scenarios, it seems the “no harm, no foul” rule is in effect, or more likely “don’t ask, don’t tell.” It’s definitely happening, to the point that critics are arguing that the FAA rules are so restrictive that it promotes illegal operations. Even a former NTSB (National Transportation Safety Board) member wrote an article entitled “Unreasonable UAS Rules Promote Culture of Non-Compliance”.

However, just when you think it’s a drone free-for-all to fly where you want, the FAA pulls one out of its hat like it did last week and proposed a $1.9M fine to a Chicago-based company, SkyPan International, for conducting 65 drone flights without authorization. Mind you, these weren’t flights in rural Iowa taking pictures of corn fields. According to the FAA, the company flew 43 missions in New York City’s restricted airspace without prior authorization. Well, now we know where the FAA’s tolerance lies.

Back to the Commercial UAV Expo. While the enthusiasm during the technical sessions showed some restraint, it knew no bounds in some areas of the exhibition area. Vendors, especially the venture capital-funded ones, were looking to book orders now. Prices ranged from sub-$1,000 for a “prosumer” drone for snapping high-resolution images to a $100,000+ for the drone equipped with lidar or other specialized payload.

The exhibit hall at the Commercial UAV Expo.

Please don’t take my message the wrong way. There’s a lot of opportunity for drones in the commercial market segments, from agriculture to utility inspection to photography — but the game is very early. While the technical hurdles can be conquered, the regulatory hurdles are substantial. The FAA is working on rules for BVLOS, but as the FAA chairman said, a solution for that is a few years from now.

Thanks, and see you next month.

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