Market Overview

Amazon Is One Step Closer To Package Delivery By Drone

Amazon Is One Step Closer To Package Delivery By Drone

When, Inc. (NASDAQ: AMZN) founder and CEO Jeff Bezos announced the future Prime Air service, he promised customers delivery by drone in less than 30 minutes.

Amazon has discussed using drones for delivery since 2013, and 2018 was the original target date.

What Happened: The Federal Aviation Administration has granted approval to Amazon Prime Air for drone delivery.

The FAA granted the company a Part 135 air carrier certificate. “Amazon Prime Air’s concept uses autonomous UAS (unmanned aircraft systems) to safely and efficiently deliver packages to customers,” an FAA spokesperson said, according to CNET.

Why It’s Important: Amazon’s vision is to be able to deliver packages under 5 pounds to customers within a 15-mile range in less than 30 minutes.

Several years ago, Bezos cited the fact that 86% of packages weigh less than 5 pounds as a good reason to use drones for delivery.

In 2016, Amazon successfully delivered a TV streaming stick and bag of popcorn in 13 minutes to a UK customer. Since then, no commercial launch has occurred. 

Both the United Parcel Service, Inc. (NYSE: UPS) and Wing, an Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) unit, have the same FAA certification.

What’s Next: Amazon will complete further tests for customer deliveries. It believes more tests are needed before it can scale up Amazon Prime Air operations.

Amazon stock is up more than 80% in 2020 and has helped Jeff Bezos become the first person worth $200 billion.

Photo courtesy of Amazon. 


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