Market Overview

FAA Introduces New Rules For Commercial Drone Usage

FAA Introduces New Rules For Commercial Drone Usage

The U.S. Department of Transportation’s Federal Aviation Administration (FAA) issued new rules on Monday that make way for the commercial use of drones. The official press release claims that approximately 203,000 pilots are certified to conduct remote flights, and close to 1.7 million drones are registered with the FAA. 

What Happened: The newly issued rules allow drone operators to carry out flights at night over people subject to certain conditions. The FAA’s rules mandate that drones be set up with a Remote ID to offset potential risks associated with uncrewed aircraft.

The manufacturers have 18 months to start building drones with Remote IDs, whereas operators were granted an extra year to begin using drones with remote identification functionalities.

Elaine L. Chao, the U.S. Secretary of Transportation, believes that the new rules address safety concerns and encourage the use of this innovative technology. FAA’s latest guidelines will superimpose Part 107 of the Federal Aviation regulations, allowing operators to conduct aerial operations without securing an explicit FAA waiver.

Steve Dickson, an administrator with FAA, opines that this decision is a step towards integrating drone technology in everyday lives and that it should not take long before drones are routinely used for deliveries.

Why Does It Matter: The pandemic outbreak and lockdown initiatives led to a surge in e-commerce operations. The introduction of drone technology in e-commerce logistics could lead to higher efficiency levels, indirectly contributing to growth.

In 2013, Amazon Inc’s (NASDAQ: AMZN) founder, President, and CEO Jeff Bezos spoke about introducing drone delivery by 2019. However, Amazon received FAA approval for commercial drone delivery operations in September 2020.

Last month, there were reports about Amazon retrenching employees from its drone-delivery project and entering into tie-ups with external entities like Austria’s FACC Aerospace, Spain’s Aernnova Aerospace, and other firms.

In October 2019, the FAA approved United Parcel Services Inc (NYSE: UPS) application to operate a drone airline. UPS had planned to introduce drones to support medical campuses and for delivering medical packages. According to Market Watch, it has successfully delivered hundreds of packages to a hospital campus in North Carolina since then.

In September 2020, retail giant Walmart Inc (NYSE: WMT) entered into a partnership with Zipline — a medical product delivery company. At the time, Walmart planned to conduct its initial drone testing by delivering wellness products in Arkansas.

Image Courtesy: Wikimedia


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