#11 SUSB Expo 2014 Drone Analyst

Drone Analyst Making Sense of the Market for Small UAS

IMPACT OF FAA RULES ON SMALL UAS BUSINESS

 Survey Research Results

 Economic impact of FAA rules on small unmanned aerial systems (sUAS) operations from the business perspective

 For sUSB Expo

 May 8, 2014  Prepared by:

Colin Snow

287 | Drone Analyst Making Sense of the Market for Small UAS

About this study  This study details the existing state of sUAS operators, identifies business sentiment and micro-economic issues,

 and assesses their importance for future FAA regulations

297$qualified$respondents$ 90%$from$the$U.S.$

59% 35%

6%

Owners & employees Experts Other

Copyright 2014 – Drone Analyst | Not for Distribution

59%$$from$drone$businesses$


Survey Results: Business Impact

 Market development

Favorable$Regulations$

 Market disintegration

Unfavorable$Regulations$

Current$Policies$

 Market uncertainty



Key Insights

Understanding$of$current$FAA$rules$varies$widely$

 Responses to each of the individual questions are analyzed in the Detailed Findings, which are contained in the Complete Research Report.

Companies$operate$anyway$!

Aerial$photography$and$cinema$dominate$service$offerings$

Few$operators$employ$commercial$liability$insurance$

Favorable$rules$will$create$economic$growth$

insight' insight' insight'

insight' insight'

Unfavorable$rules$will$kill$the$market$$

insight'

ONE$ TWO$ THREE$

FOUR$ FIVE$ SIX$



Under current policies..

 This has led to a shadow economy and has many companies on the sidelines.

71%

47%

30%

say the FAA does not regulate Class G air space. ..there is market

uncertainly.

of companies operate anyway and most have bee doing so for two or more years.

say rules are unclear and half say ‘very’ unclear.

Copyright 2014 – Drone Analyst | Not for Distribution Source: Drone Analyst


Under favorable rules..

 Almost all businesses that are on the sidelines would start operation immediately and begin hiring.

65%

49%

42%

would hire two or more employees. ..there is economic

growth.

projected three year CAGR with the largest growth for businesses who make under $1 million.

would start a business immediately.



Favorable rules..

8%

8%

10%

10%

13%

14%

22%

29%

36%

40%

53%

68%

0% 10% 20% 30% 40% 50% 60% 70% 80%

FAR Part 21.25 Restricted Category certificate

Commercial pilot license

None

Private pilot license

Class 2 medical certificate

Certificate of Authorization or Waiver (COA)

Private pilot ground school

Maintenance records for my aircraft

Serial number traceability for the aircraft and critical parts

Aircraft-specific operational proficiency test

Self-declaration: intent, aircraft, general location, and use

Agreement to operational guidelines for self-regulation

..if more than 50%



Under unfavorable rules businesses would..

61%

39%

Kill plans Not kill plans

 We conclude the overall market for sUAS would basically die if unfavorable regulations come into being. All the positive economic impacts like revenue, job creation, and tax base creation would not be realized.



Unfavorable rules..

7%

11%

12%

22%

24%

27%

42%

51%

54%

57%

65%

74%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Agreement to operational guidelines for self-regulation

Self-declaration of intent, aircraft, general location, and use

None / Does not apply

Serial number traceability for the aircraft and critical parts

Aircraft-specific operational proficiency test

Maintenance records for my aircraft

Private pilot ground school

Class 2 medical certificate

A Part 21.25 Restricted Category certificate

A Certificate of Authorization or Waiver (COA)

Private pilot license

Commercial pilot license

..if more than 50%



Recommendations to FAA

 1. Acknowledge that the current regulatory void has left businesses either sitting on the sidelines or operating in the absence of appropriate safety guidelines.  2. Concede that the recreational community has proven that community-based safety programming is effective in managing a growing level of activity.  3. Grant the April 9, 2014, request by the AUVSI and AMA and the 31 other organizations to expedite the rulemaking process for UAS operations in the U.S. airspace and allow the limited use of small UAS for commercial purposes before the final rulemaking is completed.

 4. Make good on the February 6, 2007, Policy Statement advisory pledge here to:

 ".. [create] a different category of unmanned vehicles that may be defined by the operator’s visual line of sight and are also small and slow enough to adequately mitigate hazards to other aircraft and persons on the ground."

 5. Abide by the Regulatory Flexibility Act and balance the safety goals of regulations with the needs and capabilities of small businesses and other small entities providing sUAS services



Recommendations to manufacturers and operators

 1. Educate yourself. As this study shows, too many business owners and operators do not understand current rules or advisories. See my website for links to the most relevant ones.  2. Regulate yourself. Start by adopting standards for your aircraft and users. A good place to start is with the seven standards released by ASTM International Committee F38 on Unmanned Aircraft Systems.  3. Collaborate. Form a working relationship with the organizations that have already put in place operational guidelines such as AMA, RCAPA, and PARCAP.

 4. Find your public voice. Actively examine and then voice your opinion when an FAA notice of proposed rulemaking (NPRM) about UAS is made public.  Also, don't assume that AUVSI is speaking on your behalf and in your favor even though it may seem so.  5. Buy insurance. There are aviation insurance contracts which have no Federal Aviation Regulation (FAR) exclusions.



Research Reports

 More data and analysis are available:

 Summary Report

 $95

 Complete Report

 $1950

 www.droneanalyst.com/research

9'detailed'findings'

15'data'charts'

You'can'purchase'a'report'to'match'your'business'needs'


Appendix Additional'slides:'

Service'providers'


Service providers

13%

2%

2%

2%

3%

3%

4%

5%

5%

5%

8%

11%

36%

0% 5% 10% 15% 20% 25% 30% 35% 40%

All Others

Construction

Scientific Research

Utilities

First Responder Service (Police, Fire, or Medical)

Data Aggregation or Analytic Services

Consulting

Cinematography / Movie / TV

Education and Training

Mapping / Topography / Geospacial / Photogrammetry

Agriculture / Farming Services

Sales of sUAS aircraft and/or technology

Aerial Photography and/or Video

41% combined



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#11 SUSB Expo 2014 Drone Analyst

Technology

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