Drone use ready to take-off

The rapid growth of unmanned aerial vehicles (UAVs), or drones in our skies, is one of the biggest issues to impact the aviation industry for decades. In 2020, it is estimated that global spending on drones will total $16.3bn alone, according to analyst firm International Data Corporation (IDC) [1] and is forecast to grow at a 33% CAGR.

Aerospace analysis company, Teal Group, anticipates a $93bn investment in commercial drone technology worldwide over the next 10 years and also expects the worldwide non-military drone market, dominated by manufacturers in China, to triple in size to $14.3bn in sales over the same period from $4.9bn in 2019, as it benefits from a gradual opening of US airspace by the Federal Aviation Administration (FAA) and increased use by commercial industries [2]. In the US alone, almost 900,000 hobbyist owners had registered their drones by the end of 2018 according to the FAA since it mandated online registration for drones in 2015.

Meanwhile, the market for commercial drones – which can be used for anything from lifeguard duties to tackling crime to inspections of manufacturing sites to delivering of medical supplies to remote locations – is accelerating. Of the estimated $16bn spending on drones in 2020, it is predicted that almost $10bn – or 60% – will be spent in the commercial sector, driven by the utilities, construction and manufacturing and resource industries. In the US, the FAA also expects growth will continue – by 2023, the commercial drone market is expected to triple in size, with an estimated 823,000 drones flying at that time [3]. There is certainly a buzz about this market.

Drones bring a host of potential benefits to the aviation industry in particular. For example, they can be used to undertake aerial surveys of terminal buildings or provide 3D maps of runways in order to identify and aid maintenance work – this can be much quicker and safer than using people. They can also be used to quickly detect foreign objects around airports, potentially eliminating the need to close down a runway, as well as offering support to security by identifying any threats, while also acting as a visual deterrent.

However, as the number of drones flying in the skies has increased, so have the risk exposures. AGCS has already experienced a small number of insurance claims resulting from drones falling to the ground, the majority of which have been caused by loss of battery power, often due to pilot inattention during the flight. Fortunately, no one has been hurt in these incidents. Even more serious is the fact that the number of aircraft near-misses with drones and other incidents of reckless behavior in or around airports around the world is also increasing as more drones and pilots enter the airspace.

Drones constitute a considerable risk to manned airplanes. Even though many can weigh only a few pounds, the motors and other metallic equipment that power them can cause significant damage to aircraft engines, windshields and wings. It is estimated that even a small drone could cause as much as $10mn in physical damage alone if hitting an engine of an airplane (excluding liability costs), not to mention the risk of accident, injury or even death to passengers and crew.

Commercial aircraft are at the greatest risk of an incident with a drone during take-off and landing. In the event of an incident, aircraft could also be forced to make an emergency landing, resulting in delay or cancellation, incurring significant economic loss.

For example, in the US the number of safety reports involving drones soared from zero in February 2014 to 260 by June 2017 [4]. In the UK, the number of times a drone endangered the safety of an aircraft rose by more than a third in 2018 according to the UK Airprox Board. It recorded 125 “dangerously close” encounters in 2018, up from 93 in 2017 and 71 in 2016. Most famously, severe disruptions occurred at Gatwick Airport, London’s second busiest, resulting in 1,000 flight cancellations or diversions and affecting 140,000 passengers, when recreational drones reportedly appeared over the airport for three days in December 2018. Estimates put the cost of the Gatwick disruption in excess of $60mn [5], while airliner EasyJet confirmed it lost £15mn ($18.5mn) as a result. In the wake of the incident, Gatwick spent about £5mn ($6mn) on anti-drone equipment, which can detect and jam communications between a drone and its operator.

Drone incidents around airplanes or near airports have also occurred over the past year in Newark, New York, London’s Heathrow Airport, Frankfurt, Dubai and Singapore, to name but a few examples. In Germany, its busiest airport, Frankfurt, was also the most frequently impacted by drones in 2019 with 28 sightings alone, while drones disrupted air traffic in Germany over 150 times in 2019, according to data reported by Funke Media Group, even though they aren’t allowed to fly within 1.5 kilometers (0.9 miles) of German international airports. Antidrone measures to protect German air traffic will cost around €30mn per airport, the federal government has said [6].

As drone technology and reliability has improved, insured losses from drones have shown a positive trend. However, the move towards electric powered flight and more autonomous drones will bring far greater challenges. “AGCS insures drones globally – covering both hull risks and liability for operators – and we have seen losses improve to some degree, as drones have become more reliable and battery and guidance technology has improved,” says Tom Chamberlain, Underwriting Manager Aerospace and General Aviation, UK, at AGCS.

“The drone industry is on the cusp of a transformative development, with the development of electric unmanned aircraft that are able to fly beyond visual line of sight (BVLOS),” adds Axel von Frowein, Global Product Leader Aerospace at AGCS. “If drones can be safely integrated into commercial airspace, commercial drones may soon become commonplace – used for deliveries, inspections, agriculture and even urban air mobility services that can carry tourists, serve offshore oil platforms and carry out emergency evacuations.“

In the US, the FAA recently granted licenses to a number of logistics companies to test drone delivery systems in the US and authorized its first BVLOS flight for a public safety agency, the Chula Vista, California, Police Department. Last year, Xcel Energy used a drone to inspect electric power lines in Colorado – marking the first BVLOS flight by a US utility company.

In addition to carrying cargo, small autonomous passenger drones are undergoing testing. Uber plans to test its air taxi technology in 2020, with the aim of launching commercial operations from 2023. Dubai, Singapore and China are among the states and countries embracing the technology with plans to launch passenger services in coming years – Dubai conducted its first test of a drone taxi service in 2017.

One of the world’s largest manufacturers of consumer drones recently announced that its drones will be equipped with ADS-B sensors from 2019, which will enable them to be seen and tracked by other aircraft and air traffic control. However, BVLOS flight has some significant regulatory and safety challenges ahead. Switzerland recently suspended a medical drone delivery service after the vehicle crashed close to a preschool. The drone service, which delivers samples to Swiss hospitals, had made over 3,000 successful flights since its launch in 2017.

“Drones have become safer as the technology has improved,” says Chamberlain. “However, the regulatory landscape continues to lag behind technological advancement as we are seeing in the continued growth of the unmanned autonomous flight sector. There are now over 200 companies developing passenger-carrying aircraft. With a lot of companies investing in this technology there will be another learning curve in aviation and drone safety.”