2014 SUSB EXPO IN SF, CA

1. 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
Drone Analyst
Making Sense of the Market for Small UAS
May 8, 2014
Prepared by:
Colin Snow

2. 59%$$from$drone$businesses$
| 287
About this study This study details the existing state of
Drone Analyst
Making Sense of the Market for Small UAS
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

3. Unfavorable$Regulations$
| 288
Survey Results:
Business Impact
Drone Analyst
Making Sense of the Market for Small UAS
Favorable$Regulations$
Market development
Market disintegration
Current$Policies$
Market
uncertainty
Copyright 2014 – Drone Analyst | Not for Distribution

4. | 289
Key Insights
insight' insight' insight'
Understanding$of$
current$FAA$rules$
varies$widely$
ONE$ TWO$ THREE$
insight' insight'
Drone Analyst
Making Sense of the Market for Small UAS
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'
Unfavorable$rules$
will$kill$the$market$
$
FOUR$ FIVE$ SIX$
Copyright 2014 – Drone Analyst | Not for Distribution

5. | 290
Under current
policies..
of companies
operate anyway
and most have bee doing
so for two or more years.
This has led to a shadow economy
and has many companies on the
sidelines.
Drone Analyst
Making Sense of the Market for Small UAS
71%
47%
30%
say rules are
unclear
and half say ‘very’
unclear.
say the FAA
does not regulate
Class G air space. ..there is market
uncertainly.
Source: Drone Analyst Copyright 2014 – Drone Analyst | Not for Distribution

6. | 291
Under favorable
rules..
projected three
year CAGR
with the largest growth for
businesses who make
under $1 million.
Almost all businesses that are on the
sidelines would start operation
immediately and begin hiring.
Drone Analyst
Making Sense of the Market for Small UAS
65%
49%
42%
would hire
two or more
employees.
..there is economic
growth.
would start a
business
immediately.
Source: Drone Analyst Copyright 2014 – Drone Analyst | Not for Distribution

7. | 292
Favorable rules..
Agreement to operational guidelines for self-regulation
Self-declaration: intent, aircraft, general location, and
use
Aircraft-specific operational proficiency test
Serial number traceability for the aircraft and critical
parts
Maintenance records for my aircraft
Private pilot ground school
Certificate of Authorization or Waiver (COA)
Class 2 medical certificate
Private pilot license
None
Commercial pilot license
Drone Analyst
Making Sense of the Market for Small UAS
14%
10%
10%
8%
8%
13%
22%
29%
40%
36%
53%
68%
0% 10% 20% 30% 40% 50% 60% 70% 80%
FAR Part 21.25 Restricted Category certificate
..if more than
50%
Copyright 2014 – Drone Analyst | Not for Distribution

8. | 293
Under unfavorable
rules businesses
would..
Drone Analyst
Making Sense of the Market for Small UAS
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.
Source: Drone Analyst Copyright 2014 – Drone Analyst | Not for Distribution

9. | 294
Unfavorable rules..
Commercial pilot license
Private pilot license
A Certificate of Authorization or Waiver (COA)
A Part 21.25 Restricted Category certificate
Class 2 medical certificate
Private pilot ground school
Maintenance records for my aircraft
Aircraft-specific operational proficiency test
Serial number traceability for the aircraft and critical
None / Does not apply
parts
Self-declaration of intent, aircraft, general location, and
use
Drone Analyst
Making Sense of the Market for Small UAS
11%
7%
12%
27%
24%
22%
42%
57%
54%
51%
65%
74%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Agreement to operational guidelines for self-regulation
..if more than
50%
Copyright 2014 – Drone Analyst | Not for Distribution

10. | 295
Recommendations
to FAA
Drone Analyst
Making Sense of the Market for Small UAS
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
Copyright 2014 – Drone Analyst | Not for Distribution

11. | 296
Recommendations
to manufacturers
and operators
Drone Analyst
Making Sense of the Market for Small UAS
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.
Copyright 2014 – Drone Analyst | Not for Distribution

12. | 297
Research Reports
Drone Analyst
Making Sense of the Market for Small UAS
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'
Copyright 2014 – Drone Analyst | Not for Distribution

13. Appendix Additional'slides:'
Service'providers'

14. | 299
Service providers
Aerial Photography and/or Video
Sales of sUAS aircraft and/or technology
Agriculture / Farming Services
Mapping / Topography / Geospacial / Photogrammetry
Education and Training
Cinematography / Movie / TV
Consulting
Data Aggregation or Analytic Services
First Responder Service (Police, Fire, or Medical)
Drone Analyst
Making Sense of the Market for Small UAS
13%
5%
5%
5%
3%
3%
2%
2%
2%
4%
8%
11%
36%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Utilities
Scientific Research
Construction
All Others
41%
combined
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15. | 300
© 2014 Drone Analyst.
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Drone Analyst
Making Sense of the Market for Small UAS
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