Author Archives: Kathryn Culhane

The Economic Impact of UAV Technology: Regulatory Approvals Paving the way for a Billion Dollar Industry?

While the concept of an unmanned aerial vehicle (hereinafter UAV), also known as a drone, delivering products may seem futuristic it is set to become a reality. Given that, the Irish Aviation Authority (hereinafter IAA) have shown a willingness to support drone airspace. This is hardly surprising when considering that, according to Goldman Sachs, UAV technology is estimated to be worth $100 billion, in market opportunity, to the worlds’ global economy by 2020.

With the fastest area of growth projected to be in the commercial and civil sector. For instance, a study conducted by PwC has suggested that UAV powered business operations could potentially be worth $127 billion. While, UAV technology, which is of military origin, is likely to be as ground-breaking as similar products of military origin, such as the internet and GPS. It is questionable whether its value will be derived from its hardware which has low production costs and is, therefore, unlikely to drive industry growth. Since the technology used in this area can be easily reproduced, growth in this area is likely to be in services that operate and manage drones. For instance, Amazons’ drone delivery service, PrimeAir, which has been described as ‘ground-breaking’.

Although UAV’s have the potential for enormous market opportunity, regulatory approval is needed to start operations and to generate profits. For instance, in the U.S the Federal Aviation Administration (hereinafter FAA) must grant an air carrier certificate before commercial UAV operations can be commenced. Though Wing Aviation became the first U.S company that received FAA approval other companies such as Amazon, and UPS are still awaiting approval. In Ireland, Manna, which aims to facilitate “3-minuet food delivery” using UAV technology, should become a reality by Q1 of 2020. While the Small Unmanned Aircraft (Drones) and Rockets Order S.I. 563 of 2015 outlines that UAV registration is mandatory in Ireland for vehicles over 1kg.

It is submitted that since drone airspace is a new concept a more comprehensive framework will be needed. For instance, in April 2019 an Airbus A320 landing in London Gatwick had to swerve to avoid collision with a UAV. However, the IAA has indicated that persons operating drones illegally will be subject to the full rigors of the law. Moreover, in June 2019 the Commission Delegated Regulation (EU) 2019/945 & Commission Implementing Regulation (EU) 2019/947 published European rules on UAV’s to ensure that UAV operations across Europe are safe. Given, the novel nature of commercial UAV activity safety has been a paramount concern for regulators. 

Due to economies of scale UAV technology is predicted to play a larger role in our everyday lives. Furthermore, there may be financial incentives for using this technology. For instance, in the construction industry, when lease agreements are in place, the lessor would likely qualify for tax deductions. While data privacy concerns and infringements of General Data Protection Regulations (hereinafter GDPR) have been raised. These concerns may likely be mitigated if commercial UAV’s operate using Lidar, Sonar, and GPS without cameras. The impact of the UAV regulations and whether they will bring harmony and economic growth to this area remains to be seen.