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Look! Up in the Sky! Drones for Commercial Use

Unmanned aerial vehicles (aka drones) are fast-becoming a tool for businesses to operate and promote themselves. For instance, Amazon Prime Air hopes to take your parcels to the air by 2020. The Association for Unmanned Vehicle Systems International (“AUVSI”) predicts that in the coming decade drones will create 100,000 jobs and add $82 billion to the economy. Commercial uses for drone aircraft can be seen in real estate, entertainment, journalism, engineering, mining, agriculture and public safety, to name just a few. There are also ancillary commercial markets such as drone services and drone pilot certification programs.

While flying drones may seem like the Wild West with respect to rules, the Federal Aviation Administration (“FAA”) is actively trying to keep up. According to the FAA, someone wishing to operate a drone for commercial purposes will need (1) a Section 333 grant of exemption; (2) a Certificate of Waiver or Authorization; (3) an aircraft registered with the FAA, and; (4) a pilot with either an airline transport, commercial, private, recreational, or sport pilot certificate. The FAA also requires registration numbers on drones.

A company’s owners that hold the Section 333 exemption do not need to be licensed pilots, but the person actually flying the drone must have the appropriate pilot certificate. If someone is flying a drone recreationally or as a hobby, then no Section 333 exemption is required. Drone operators need to be aware that they cannot fly above 400 feet, must fly during daylight hours, cannot fly near airports or in national parks, and must be in the line of sight of their drones.

Drone technology, along with corresponding regulations, will continue to evolve.  The question is will those rules inhibit growth and innovation in this fast-moving sector?  

 Projected Annual Drone Sales in Units
2016 70,000
2017 105,000
2018 110,000
2019 118,000
2020 125,000
Source: AUVSI  

David Katz is a Senior Audit Manager providing domestic and international accounting, auditing and business consulting services to public and private clients in a variety of industries.

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