The Role Of Drones In The Future of Logistic Aviation

The Role Of Drones In The Future Of Logistic Aviation

Image

Drones are transforming the aviation landscape

Anthony DiNota and Matt Riley

20 min read

Double Quotes
How soon can we expect flying drone deliveries to become a reality? The potential is enormous, but several hurdles remain
Anthony Dinota, Vice President, Oliver Wyman Vector

The coronavirus pandemic caused severe socioeconomic disruption. In this episode of our Velocity Podcast, Anthony DiNota, Oliver Wyman Vector (previously CAVOK) vice president, and Matt Riley, Oliver Wyman Vector senior manager, take a closer look at how the use of drones can overcome some of the challenges in the aviation industry brought on by COVID-19.

The concept of drone deliveries has been around for a while, with many e-commerce giants showing an interest. But how close are we to being able to fully utilize our logistic aviation landscape? How soon can we expect flying drone deliveries to become a reality? There are several hurdles that the industry needs to overcome, whether it be the regularity rules and conduct or the public perception and acceptance.

Key talking points:

  • The increasing need for drone deliveries of vital equipment and supplies to adhere to social distancing guidelines.
  • How close we are to fully utilizing drones for logistics and deliveries.
  • The regulatory hurdles that need to be overcome for drone deliveries to become a reality.
  • Public perception and acceptance of drones in daily life.

This episode was first broadcast July 1, 2020.

This episode is part of the Velocity Podcast series, which delves into innovation in transportation, travel, and logistics. We discuss new mobility’s impact on global movement of people and goods, and address industry challenges from tech and economic disruptions.

Subscribe for more on: Apple Podcasts | Spotify | Youtube

Anthony Dinota

Like what's the big deal, well the big deal is that, it could be a game-changer for supporting communities, in the future.

Narrator

Here today to discuss the future of air mobility, taking a closer look at the operating environment and debate what challenges the industry may face is Oliver Wyman CAVOK’s Anthony Dinota and Matt Riley. For more information on this episode check out our show notes. Thanks, and enjoy the show.

Anthony

Hello and welcome to the Velocity podcast, I’m Anthony Denota, vice president at Oliver Wyman. And I’m joined today by Matt Riley, senior manager also with Oliver Wyman. We're going to have a conversation today around air mobility, drones, and the unmanned aircraft systems, taking a closer look at the operating environment and what challenges the industry may face. Hey Matt, thanks for joining me today. How are you doing?

Matt Riley

Hey Anthony, very well thank you and thanks for having me join this exciting topic.

Anthony

As I said, glad to have you here. You know, as the current global Coronavirus pandemic depends, sending shocks around the world economy. You can certainly start to see how the use of drones and eVTOL aircraft in the urban air space could play a pivotal role in overcoming, you know, various challenges that we're seeing caused by this pandemic. Drones are probably more relevant given the current situation, well probably lets focus on those for this podcast, then maybe we’ll pick up eVTOL a future podcast. So going back to drones Matt, while there’s like a number of prototypes that are being built, you know, obviously there are a significant number of hurdles that need to be scaled before they become a viable part of our logistics landscape. How close do you think we are to fully utilizing these vehicles within the logistics infrastructure Matt?

Matt

I totally agree with you that we have some challenges and some hurdles to overcome. Right now, to answer that question, I don't know if we’re as close as we may think we are with operations in the national air space, especially around other manned aircraft. Let alone the intent to operate in highly congested urban areas. We talked about all these small drones carrying packages and the logistics of delivery, but we don't really have a way to operate successfully large quantities of the smaller drones autonomously and I think those are the challenges we have to solve. For sure OEM’s are involved, we’ve got many of the large manufacturers. We have many large logistic companies involved. So, everyone is working on it, but the regulators are going to play a key role in how we all operate under the same rules in this national airspace system.

Anthony

I think Matt it's certainly a, you know, a interesting shift brought about by the catalyst, of course, you know, if you see a lot of the media reporting's now, and they talk about how, you know, the world will change post-pandemic. And I think as you look at drone package delivery or supply delivery, I think if you go back six months ago, a lot of people were looking at it saying, well, oh gosh, g-whiz, that a nice to have but we're able to do it today, so, you know, really what the big deal, right. And I think you just fast forward to the current state and the big deal is that when you have communities that are on the fringe of suburban or maybe rural that are not able to access things in the manner they need, especially things like, you know, medications or you know, life sustaining items, you know, we see some companies with drones delivering plasma in other parts of the world, or maybe pharmacy or pharmaceutical things or PPE packages, right. They could all be supplied in those ways in an emergency. So, I think that it starts to become like what's the big deal? Well, the big deal is that it could be a game-changer for supporting communities in the future.

Matt

I totally agree, and I think the COVID-19 is certainly the catalyst for a lot of the fast track that we will need to overcome some of the challenges to operate in the national airspace system. Sorry, I'm going to geek out a little bit on some of these numbers. But if we look at how many registered drones, and now that includes small commercial photography drones, these could include hobbies. But right now, there is 1 563 000 drones registered in the United States alone as of March 10th, and that's recreational is 1.1 million and commercially, there are 440 000. That's a lot of vehicles and getting them to all operate on the same set of rules, the same criteria and protocols for autonomy is a big challenge. One that is being or trying to be addressed by the FAA with a new, right now it’s a proposed rulemaking and its called remote ID and it affects many of the rules that both 135 commercial operators and part 107 operators will need to operate under and that's part 91. And I'm going to bring back some of the discussion around part 91 because the rules say, for any pilot manned or unmanned, they have to see and avoid all other aircraft in the airspace. Well, that's great for a manned aircraft. But what about these unmanned autonomous vehicle. They have got to get centers and systems on board. Some of these small drones don't have that kind of carry capability, but they are still going to be required to operate with that detect and avoid sensor in order to operate into urban areas, even the remote areas as well. Getting through all of those hurdles is key to the success that you just brought up about delivering critical supplies in the areas.

Anthony

I see that as and it's a really good point in terms of that last mile logistics of anything that we deem critical. It could even be food or other perishables to people. How do you comply obviously, you know, we here in the States, but I think more broadly, globally, the airspace that commercial aircraft operate in are pretty darn safe. We built a tremendous record of safety operating for aircraft in a controlled manner. And now we want to introduce that you said, potentially millions of additional vehicles into the space and and that's not terrible. But you need to comply with many of the regulations. And other requirements that allow you to participate in that airspace in a safe and compliant way.

Matt

Currently we have operators with equipment that can handle all-weather operations, day and night. They can handle over operations over people. However, the rules without waiver don't allow for it. And if you were to apply for waivers for all of those or any one of those, it's all based on risk and that's something that many many part 107 operators are not familiar with. You know, we in the airline business we've dealt with risk and risk management mitigations for years, but this is new to some of these operators and it's critical that they operate, just like an airline and I think Anthony you already mentioned the safety factor. All it takes is one accident where someone is injured in this industry will come apart. So, the risk, the safety factors all of that is critical to having a successful drone operation in this space.

Anthony

I was in a FAA conference a few months back and one of the messages that came out loud and clear was that, you know, given any regulatory body whether it's here in the states or us or others there are others that their ability to make new rules are, you know, is limited, and it takes generally, you know, many years for new rule making to occur. And so, the synthesis of that was that simply, you know, anybody, any new entrant into the national air space will most likely just need to figure out how to comply with the rules that exist today and so that kind of brings in a whole new dynamic, of course, right is that how do you pack all this technology into a delivery drone that can, you know, kind of fit in there without reducing or eliminating all the payload. So, you know physics of course Matt, there's no, there's no free lunch their right? Like you add weight you got to have power right and if you add power, you got to add energy, right. So, so, you start to fight the laws of physics and you end up being potentially with the vehicle that is you know, in the millions of dollars. So, now it's no longer economically viable and we find ourselves in this situation where, you know, adding a lot of tech to make it compliant could potentially drive the price up, which makes the business model not viable. And you know, you've seen a lot of the evolutions. I know that some of the industry groups you belong to, you know, what are you seeing in terms of the scale manufacturing or other things that could potentially start to eat away at, you know this ramp cost and the scale cost.

Matt

One of the reasons that I think we wanted to speak about the drone first is because of the size, the weight carrying capabilities, just because of the same reasons you just mentioned is we start getting into the eVTOL right now and the machine itself can be designed to fly like autonomously, we've proven that we have batteries that are lasting longer, but when you put a vehicle together with two passengers and a couple of suitcases, there's not a battery in the world that can lift that for much longer than 15 or 20 minutes. And that is so far down the road from my perspective that where I see the industry going first is this small package delivery rural locations outside of urban areas where we can operate partially in the national airspace system and some in the lower levels. I think this remote idea is a topic I would like to talk about for two reasons. The first is it's a three-pronged approach the FAA has taken in one of them is to try to standardize all of the drone manufacturers to performance-based criteria. And by doing that they're going to put these vehicles into tight certification just like an airplane and they will have to meet certain protocols, certain criteria and standards. So, all vehicles are operating roughly in the same manner. Now, there are some OEM's out there now, very famous ones that we all know and use in cockpits, working very hard on this type of protocol. It will help in the multiple vehicle operation when you have 15 or 20 autonomous vehicles in the same location. That's the first part, the second and third part get into the parts that people get a little antsy when they talk about privacy. One of the things that this rule is attempting to do is identify the drone, just much like a license plate would have on a car, who owns the drone and where is the PIC flying that drone. The Privacy piece of this that people are a little upset about is that system or systems could be hacked. And we've seen many hacks and cyber security breaches where data is stolen and identities are stolen and that is the biggest concern. So the FAA right now is going to have a challenge in this NPRM, that they recently put out as of middle of March. They have been 50 000, a little over 50 000 comments received on this NPRM. So we'll see the jury still out on how this will go over.

Anthony

50 000 comments, man. Gosh, there is a lot to sort out for sure. Matt, I think that we are kind of running out of time here today for this. But I want a kind of wrap it up a little bit and you know, we’ve covered a lot of ground for sure on the drones. I think that, you know, the pandemic has given a catalyst for the need and the desire to be able to fulfill, you know, the last mile with an unmanned aerial vehicle or by using an unmanned aerial system. You know, I think the other barriers that are out there, some of them we touched, I think social acceptance, yeah I think that’s going to be a much lower barrier now and airspace management, I think the technology exists to make it happen. Its just a matter of technology at scale. The autonomy of these systems and the energy storage, I think will come along. You know, I think based on our chat today, the one, the area that I think we’ll be paying closest attention to and certainly supporting the industry is an industry leader. Is certification, reliability and safety. And I think that, you know, that is like I think the key takeaway is those elements and how the industry can mature quickly without sacrificing the safety reliability work meeting on certification standards. So, anyway Matt, thanks for a, you know, a great discussion today. Yeah, certainly look forward to having a future conversation, you know, as we talked about urban air mobility part of this at a future time.

Matt

Well, thank you Anthony. That was a fabulous discussion, I really enjoyed it. I would just like to say that we touched on many topics, many subjects and it was high level. There is anything that anybody would like to hear about in deeper detail, please write in and let us know what those might be and we would be happy to get into the specifics and and talk in future episodes. Thanks again.

Anthony

Thank you everyone and we look forward to catching up again soon.

The Oliver Wyman velocity podcast is brought by the global management consulting firm, Oliver Wyman. If you enjoy today's show, we invite you to subscribe, so you'll be notified whenever a new episode goes live. For more information for us on Twitter at Oliver Wyman and read our latest transportation insight at oliverwyman.com . Thanks, and we'll see you next time.

This transcript has been edited for clarity.

    The coronavirus pandemic caused severe socioeconomic disruption. In this episode of our Velocity Podcast, Anthony DiNota, Oliver Wyman Vector (previously CAVOK) vice president, and Matt Riley, Oliver Wyman Vector senior manager, take a closer look at how the use of drones can overcome some of the challenges in the aviation industry brought on by COVID-19.

    The concept of drone deliveries has been around for a while, with many e-commerce giants showing an interest. But how close are we to being able to fully utilize our logistic aviation landscape? How soon can we expect flying drone deliveries to become a reality? There are several hurdles that the industry needs to overcome, whether it be the regularity rules and conduct or the public perception and acceptance.

    Key talking points:

    • The increasing need for drone deliveries of vital equipment and supplies to adhere to social distancing guidelines.
    • How close we are to fully utilizing drones for logistics and deliveries.
    • The regulatory hurdles that need to be overcome for drone deliveries to become a reality.
    • Public perception and acceptance of drones in daily life.

    This episode was first broadcast July 1, 2020.

    This episode is part of the Velocity Podcast series, which delves into innovation in transportation, travel, and logistics. We discuss new mobility’s impact on global movement of people and goods, and address industry challenges from tech and economic disruptions.

    Subscribe for more on: Apple Podcasts | Spotify | Youtube

    Anthony Dinota

    Like what's the big deal, well the big deal is that, it could be a game-changer for supporting communities, in the future.

    Narrator

    Here today to discuss the future of air mobility, taking a closer look at the operating environment and debate what challenges the industry may face is Oliver Wyman CAVOK’s Anthony Dinota and Matt Riley. For more information on this episode check out our show notes. Thanks, and enjoy the show.

    Anthony

    Hello and welcome to the Velocity podcast, I’m Anthony Denota, vice president at Oliver Wyman. And I’m joined today by Matt Riley, senior manager also with Oliver Wyman. We're going to have a conversation today around air mobility, drones, and the unmanned aircraft systems, taking a closer look at the operating environment and what challenges the industry may face. Hey Matt, thanks for joining me today. How are you doing?

    Matt Riley

    Hey Anthony, very well thank you and thanks for having me join this exciting topic.

    Anthony

    As I said, glad to have you here. You know, as the current global Coronavirus pandemic depends, sending shocks around the world economy. You can certainly start to see how the use of drones and eVTOL aircraft in the urban air space could play a pivotal role in overcoming, you know, various challenges that we're seeing caused by this pandemic. Drones are probably more relevant given the current situation, well probably lets focus on those for this podcast, then maybe we’ll pick up eVTOL a future podcast. So going back to drones Matt, while there’s like a number of prototypes that are being built, you know, obviously there are a significant number of hurdles that need to be scaled before they become a viable part of our logistics landscape. How close do you think we are to fully utilizing these vehicles within the logistics infrastructure Matt?

    Matt

    I totally agree with you that we have some challenges and some hurdles to overcome. Right now, to answer that question, I don't know if we’re as close as we may think we are with operations in the national air space, especially around other manned aircraft. Let alone the intent to operate in highly congested urban areas. We talked about all these small drones carrying packages and the logistics of delivery, but we don't really have a way to operate successfully large quantities of the smaller drones autonomously and I think those are the challenges we have to solve. For sure OEM’s are involved, we’ve got many of the large manufacturers. We have many large logistic companies involved. So, everyone is working on it, but the regulators are going to play a key role in how we all operate under the same rules in this national airspace system.

    Anthony

    I think Matt it's certainly a, you know, a interesting shift brought about by the catalyst, of course, you know, if you see a lot of the media reporting's now, and they talk about how, you know, the world will change post-pandemic. And I think as you look at drone package delivery or supply delivery, I think if you go back six months ago, a lot of people were looking at it saying, well, oh gosh, g-whiz, that a nice to have but we're able to do it today, so, you know, really what the big deal, right. And I think you just fast forward to the current state and the big deal is that when you have communities that are on the fringe of suburban or maybe rural that are not able to access things in the manner they need, especially things like, you know, medications or you know, life sustaining items, you know, we see some companies with drones delivering plasma in other parts of the world, or maybe pharmacy or pharmaceutical things or PPE packages, right. They could all be supplied in those ways in an emergency. So, I think that it starts to become like what's the big deal? Well, the big deal is that it could be a game-changer for supporting communities in the future.

    Matt

    I totally agree, and I think the COVID-19 is certainly the catalyst for a lot of the fast track that we will need to overcome some of the challenges to operate in the national airspace system. Sorry, I'm going to geek out a little bit on some of these numbers. But if we look at how many registered drones, and now that includes small commercial photography drones, these could include hobbies. But right now, there is 1 563 000 drones registered in the United States alone as of March 10th, and that's recreational is 1.1 million and commercially, there are 440 000. That's a lot of vehicles and getting them to all operate on the same set of rules, the same criteria and protocols for autonomy is a big challenge. One that is being or trying to be addressed by the FAA with a new, right now it’s a proposed rulemaking and its called remote ID and it affects many of the rules that both 135 commercial operators and part 107 operators will need to operate under and that's part 91. And I'm going to bring back some of the discussion around part 91 because the rules say, for any pilot manned or unmanned, they have to see and avoid all other aircraft in the airspace. Well, that's great for a manned aircraft. But what about these unmanned autonomous vehicle. They have got to get centers and systems on board. Some of these small drones don't have that kind of carry capability, but they are still going to be required to operate with that detect and avoid sensor in order to operate into urban areas, even the remote areas as well. Getting through all of those hurdles is key to the success that you just brought up about delivering critical supplies in the areas.

    Anthony

    I see that as and it's a really good point in terms of that last mile logistics of anything that we deem critical. It could even be food or other perishables to people. How do you comply obviously, you know, we here in the States, but I think more broadly, globally, the airspace that commercial aircraft operate in are pretty darn safe. We built a tremendous record of safety operating for aircraft in a controlled manner. And now we want to introduce that you said, potentially millions of additional vehicles into the space and and that's not terrible. But you need to comply with many of the regulations. And other requirements that allow you to participate in that airspace in a safe and compliant way.

    Matt

    Currently we have operators with equipment that can handle all-weather operations, day and night. They can handle over operations over people. However, the rules without waiver don't allow for it. And if you were to apply for waivers for all of those or any one of those, it's all based on risk and that's something that many many part 107 operators are not familiar with. You know, we in the airline business we've dealt with risk and risk management mitigations for years, but this is new to some of these operators and it's critical that they operate, just like an airline and I think Anthony you already mentioned the safety factor. All it takes is one accident where someone is injured in this industry will come apart. So, the risk, the safety factors all of that is critical to having a successful drone operation in this space.

    Anthony

    I was in a FAA conference a few months back and one of the messages that came out loud and clear was that, you know, given any regulatory body whether it's here in the states or us or others there are others that their ability to make new rules are, you know, is limited, and it takes generally, you know, many years for new rule making to occur. And so, the synthesis of that was that simply, you know, anybody, any new entrant into the national air space will most likely just need to figure out how to comply with the rules that exist today and so that kind of brings in a whole new dynamic, of course, right is that how do you pack all this technology into a delivery drone that can, you know, kind of fit in there without reducing or eliminating all the payload. So, you know physics of course Matt, there's no, there's no free lunch their right? Like you add weight you got to have power right and if you add power, you got to add energy, right. So, so, you start to fight the laws of physics and you end up being potentially with the vehicle that is you know, in the millions of dollars. So, now it's no longer economically viable and we find ourselves in this situation where, you know, adding a lot of tech to make it compliant could potentially drive the price up, which makes the business model not viable. And you know, you've seen a lot of the evolutions. I know that some of the industry groups you belong to, you know, what are you seeing in terms of the scale manufacturing or other things that could potentially start to eat away at, you know this ramp cost and the scale cost.

    Matt

    One of the reasons that I think we wanted to speak about the drone first is because of the size, the weight carrying capabilities, just because of the same reasons you just mentioned is we start getting into the eVTOL right now and the machine itself can be designed to fly like autonomously, we've proven that we have batteries that are lasting longer, but when you put a vehicle together with two passengers and a couple of suitcases, there's not a battery in the world that can lift that for much longer than 15 or 20 minutes. And that is so far down the road from my perspective that where I see the industry going first is this small package delivery rural locations outside of urban areas where we can operate partially in the national airspace system and some in the lower levels. I think this remote idea is a topic I would like to talk about for two reasons. The first is it's a three-pronged approach the FAA has taken in one of them is to try to standardize all of the drone manufacturers to performance-based criteria. And by doing that they're going to put these vehicles into tight certification just like an airplane and they will have to meet certain protocols, certain criteria and standards. So, all vehicles are operating roughly in the same manner. Now, there are some OEM's out there now, very famous ones that we all know and use in cockpits, working very hard on this type of protocol. It will help in the multiple vehicle operation when you have 15 or 20 autonomous vehicles in the same location. That's the first part, the second and third part get into the parts that people get a little antsy when they talk about privacy. One of the things that this rule is attempting to do is identify the drone, just much like a license plate would have on a car, who owns the drone and where is the PIC flying that drone. The Privacy piece of this that people are a little upset about is that system or systems could be hacked. And we've seen many hacks and cyber security breaches where data is stolen and identities are stolen and that is the biggest concern. So the FAA right now is going to have a challenge in this NPRM, that they recently put out as of middle of March. They have been 50 000, a little over 50 000 comments received on this NPRM. So we'll see the jury still out on how this will go over.

    Anthony

    50 000 comments, man. Gosh, there is a lot to sort out for sure. Matt, I think that we are kind of running out of time here today for this. But I want a kind of wrap it up a little bit and you know, we’ve covered a lot of ground for sure on the drones. I think that, you know, the pandemic has given a catalyst for the need and the desire to be able to fulfill, you know, the last mile with an unmanned aerial vehicle or by using an unmanned aerial system. You know, I think the other barriers that are out there, some of them we touched, I think social acceptance, yeah I think that’s going to be a much lower barrier now and airspace management, I think the technology exists to make it happen. Its just a matter of technology at scale. The autonomy of these systems and the energy storage, I think will come along. You know, I think based on our chat today, the one, the area that I think we’ll be paying closest attention to and certainly supporting the industry is an industry leader. Is certification, reliability and safety. And I think that, you know, that is like I think the key takeaway is those elements and how the industry can mature quickly without sacrificing the safety reliability work meeting on certification standards. So, anyway Matt, thanks for a, you know, a great discussion today. Yeah, certainly look forward to having a future conversation, you know, as we talked about urban air mobility part of this at a future time.

    Matt

    Well, thank you Anthony. That was a fabulous discussion, I really enjoyed it. I would just like to say that we touched on many topics, many subjects and it was high level. There is anything that anybody would like to hear about in deeper detail, please write in and let us know what those might be and we would be happy to get into the specifics and and talk in future episodes. Thanks again.

    Anthony

    Thank you everyone and we look forward to catching up again soon.

    The Oliver Wyman velocity podcast is brought by the global management consulting firm, Oliver Wyman. If you enjoy today's show, we invite you to subscribe, so you'll be notified whenever a new episode goes live. For more information for us on Twitter at Oliver Wyman and read our latest transportation insight at oliverwyman.com . Thanks, and we'll see you next time.

    This transcript has been edited for clarity.

    The coronavirus pandemic caused severe socioeconomic disruption. In this episode of our Velocity Podcast, Anthony DiNota, Oliver Wyman Vector (previously CAVOK) vice president, and Matt Riley, Oliver Wyman Vector senior manager, take a closer look at how the use of drones can overcome some of the challenges in the aviation industry brought on by COVID-19.

    The concept of drone deliveries has been around for a while, with many e-commerce giants showing an interest. But how close are we to being able to fully utilize our logistic aviation landscape? How soon can we expect flying drone deliveries to become a reality? There are several hurdles that the industry needs to overcome, whether it be the regularity rules and conduct or the public perception and acceptance.

    Key talking points:

    • The increasing need for drone deliveries of vital equipment and supplies to adhere to social distancing guidelines.
    • How close we are to fully utilizing drones for logistics and deliveries.
    • The regulatory hurdles that need to be overcome for drone deliveries to become a reality.
    • Public perception and acceptance of drones in daily life.

    This episode was first broadcast July 1, 2020.

    This episode is part of the Velocity Podcast series, which delves into innovation in transportation, travel, and logistics. We discuss new mobility’s impact on global movement of people and goods, and address industry challenges from tech and economic disruptions.

    Subscribe for more on: Apple Podcasts | Spotify | Youtube

    Anthony Dinota

    Like what's the big deal, well the big deal is that, it could be a game-changer for supporting communities, in the future.

    Narrator

    Here today to discuss the future of air mobility, taking a closer look at the operating environment and debate what challenges the industry may face is Oliver Wyman CAVOK’s Anthony Dinota and Matt Riley. For more information on this episode check out our show notes. Thanks, and enjoy the show.

    Anthony

    Hello and welcome to the Velocity podcast, I’m Anthony Denota, vice president at Oliver Wyman. And I’m joined today by Matt Riley, senior manager also with Oliver Wyman. We're going to have a conversation today around air mobility, drones, and the unmanned aircraft systems, taking a closer look at the operating environment and what challenges the industry may face. Hey Matt, thanks for joining me today. How are you doing?

    Matt Riley

    Hey Anthony, very well thank you and thanks for having me join this exciting topic.

    Anthony

    As I said, glad to have you here. You know, as the current global Coronavirus pandemic depends, sending shocks around the world economy. You can certainly start to see how the use of drones and eVTOL aircraft in the urban air space could play a pivotal role in overcoming, you know, various challenges that we're seeing caused by this pandemic. Drones are probably more relevant given the current situation, well probably lets focus on those for this podcast, then maybe we’ll pick up eVTOL a future podcast. So going back to drones Matt, while there’s like a number of prototypes that are being built, you know, obviously there are a significant number of hurdles that need to be scaled before they become a viable part of our logistics landscape. How close do you think we are to fully utilizing these vehicles within the logistics infrastructure Matt?

    Matt

    I totally agree with you that we have some challenges and some hurdles to overcome. Right now, to answer that question, I don't know if we’re as close as we may think we are with operations in the national air space, especially around other manned aircraft. Let alone the intent to operate in highly congested urban areas. We talked about all these small drones carrying packages and the logistics of delivery, but we don't really have a way to operate successfully large quantities of the smaller drones autonomously and I think those are the challenges we have to solve. For sure OEM’s are involved, we’ve got many of the large manufacturers. We have many large logistic companies involved. So, everyone is working on it, but the regulators are going to play a key role in how we all operate under the same rules in this national airspace system.

    Anthony

    I think Matt it's certainly a, you know, a interesting shift brought about by the catalyst, of course, you know, if you see a lot of the media reporting's now, and they talk about how, you know, the world will change post-pandemic. And I think as you look at drone package delivery or supply delivery, I think if you go back six months ago, a lot of people were looking at it saying, well, oh gosh, g-whiz, that a nice to have but we're able to do it today, so, you know, really what the big deal, right. And I think you just fast forward to the current state and the big deal is that when you have communities that are on the fringe of suburban or maybe rural that are not able to access things in the manner they need, especially things like, you know, medications or you know, life sustaining items, you know, we see some companies with drones delivering plasma in other parts of the world, or maybe pharmacy or pharmaceutical things or PPE packages, right. They could all be supplied in those ways in an emergency. So, I think that it starts to become like what's the big deal? Well, the big deal is that it could be a game-changer for supporting communities in the future.

    Matt

    I totally agree, and I think the COVID-19 is certainly the catalyst for a lot of the fast track that we will need to overcome some of the challenges to operate in the national airspace system. Sorry, I'm going to geek out a little bit on some of these numbers. But if we look at how many registered drones, and now that includes small commercial photography drones, these could include hobbies. But right now, there is 1 563 000 drones registered in the United States alone as of March 10th, and that's recreational is 1.1 million and commercially, there are 440 000. That's a lot of vehicles and getting them to all operate on the same set of rules, the same criteria and protocols for autonomy is a big challenge. One that is being or trying to be addressed by the FAA with a new, right now it’s a proposed rulemaking and its called remote ID and it affects many of the rules that both 135 commercial operators and part 107 operators will need to operate under and that's part 91. And I'm going to bring back some of the discussion around part 91 because the rules say, for any pilot manned or unmanned, they have to see and avoid all other aircraft in the airspace. Well, that's great for a manned aircraft. But what about these unmanned autonomous vehicle. They have got to get centers and systems on board. Some of these small drones don't have that kind of carry capability, but they are still going to be required to operate with that detect and avoid sensor in order to operate into urban areas, even the remote areas as well. Getting through all of those hurdles is key to the success that you just brought up about delivering critical supplies in the areas.

    Anthony

    I see that as and it's a really good point in terms of that last mile logistics of anything that we deem critical. It could even be food or other perishables to people. How do you comply obviously, you know, we here in the States, but I think more broadly, globally, the airspace that commercial aircraft operate in are pretty darn safe. We built a tremendous record of safety operating for aircraft in a controlled manner. And now we want to introduce that you said, potentially millions of additional vehicles into the space and and that's not terrible. But you need to comply with many of the regulations. And other requirements that allow you to participate in that airspace in a safe and compliant way.

    Matt

    Currently we have operators with equipment that can handle all-weather operations, day and night. They can handle over operations over people. However, the rules without waiver don't allow for it. And if you were to apply for waivers for all of those or any one of those, it's all based on risk and that's something that many many part 107 operators are not familiar with. You know, we in the airline business we've dealt with risk and risk management mitigations for years, but this is new to some of these operators and it's critical that they operate, just like an airline and I think Anthony you already mentioned the safety factor. All it takes is one accident where someone is injured in this industry will come apart. So, the risk, the safety factors all of that is critical to having a successful drone operation in this space.

    Anthony

    I was in a FAA conference a few months back and one of the messages that came out loud and clear was that, you know, given any regulatory body whether it's here in the states or us or others there are others that their ability to make new rules are, you know, is limited, and it takes generally, you know, many years for new rule making to occur. And so, the synthesis of that was that simply, you know, anybody, any new entrant into the national air space will most likely just need to figure out how to comply with the rules that exist today and so that kind of brings in a whole new dynamic, of course, right is that how do you pack all this technology into a delivery drone that can, you know, kind of fit in there without reducing or eliminating all the payload. So, you know physics of course Matt, there's no, there's no free lunch their right? Like you add weight you got to have power right and if you add power, you got to add energy, right. So, so, you start to fight the laws of physics and you end up being potentially with the vehicle that is you know, in the millions of dollars. So, now it's no longer economically viable and we find ourselves in this situation where, you know, adding a lot of tech to make it compliant could potentially drive the price up, which makes the business model not viable. And you know, you've seen a lot of the evolutions. I know that some of the industry groups you belong to, you know, what are you seeing in terms of the scale manufacturing or other things that could potentially start to eat away at, you know this ramp cost and the scale cost.

    Matt

    One of the reasons that I think we wanted to speak about the drone first is because of the size, the weight carrying capabilities, just because of the same reasons you just mentioned is we start getting into the eVTOL right now and the machine itself can be designed to fly like autonomously, we've proven that we have batteries that are lasting longer, but when you put a vehicle together with two passengers and a couple of suitcases, there's not a battery in the world that can lift that for much longer than 15 or 20 minutes. And that is so far down the road from my perspective that where I see the industry going first is this small package delivery rural locations outside of urban areas where we can operate partially in the national airspace system and some in the lower levels. I think this remote idea is a topic I would like to talk about for two reasons. The first is it's a three-pronged approach the FAA has taken in one of them is to try to standardize all of the drone manufacturers to performance-based criteria. And by doing that they're going to put these vehicles into tight certification just like an airplane and they will have to meet certain protocols, certain criteria and standards. So, all vehicles are operating roughly in the same manner. Now, there are some OEM's out there now, very famous ones that we all know and use in cockpits, working very hard on this type of protocol. It will help in the multiple vehicle operation when you have 15 or 20 autonomous vehicles in the same location. That's the first part, the second and third part get into the parts that people get a little antsy when they talk about privacy. One of the things that this rule is attempting to do is identify the drone, just much like a license plate would have on a car, who owns the drone and where is the PIC flying that drone. The Privacy piece of this that people are a little upset about is that system or systems could be hacked. And we've seen many hacks and cyber security breaches where data is stolen and identities are stolen and that is the biggest concern. So the FAA right now is going to have a challenge in this NPRM, that they recently put out as of middle of March. They have been 50 000, a little over 50 000 comments received on this NPRM. So we'll see the jury still out on how this will go over.

    Anthony

    50 000 comments, man. Gosh, there is a lot to sort out for sure. Matt, I think that we are kind of running out of time here today for this. But I want a kind of wrap it up a little bit and you know, we’ve covered a lot of ground for sure on the drones. I think that, you know, the pandemic has given a catalyst for the need and the desire to be able to fulfill, you know, the last mile with an unmanned aerial vehicle or by using an unmanned aerial system. You know, I think the other barriers that are out there, some of them we touched, I think social acceptance, yeah I think that’s going to be a much lower barrier now and airspace management, I think the technology exists to make it happen. Its just a matter of technology at scale. The autonomy of these systems and the energy storage, I think will come along. You know, I think based on our chat today, the one, the area that I think we’ll be paying closest attention to and certainly supporting the industry is an industry leader. Is certification, reliability and safety. And I think that, you know, that is like I think the key takeaway is those elements and how the industry can mature quickly without sacrificing the safety reliability work meeting on certification standards. So, anyway Matt, thanks for a, you know, a great discussion today. Yeah, certainly look forward to having a future conversation, you know, as we talked about urban air mobility part of this at a future time.

    Matt

    Well, thank you Anthony. That was a fabulous discussion, I really enjoyed it. I would just like to say that we touched on many topics, many subjects and it was high level. There is anything that anybody would like to hear about in deeper detail, please write in and let us know what those might be and we would be happy to get into the specifics and and talk in future episodes. Thanks again.

    Anthony

    Thank you everyone and we look forward to catching up again soon.

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    This transcript has been edited for clarity.

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