Unmanned Aerial Vehicles and Changing Regulatory Scenario

The UAV sector is expanding significantly and will continue to showcase growth in the future. Unmanned aerial vehicles (UAVs) will enhance the capabilities of various application sectors, including commercial delivery, mapping, search & rescue as well as filmmaking among others. Alongside the new revenue models and cost benefits UAVs provide, the data collection model will also be significantly change and the efficiency and capabilities of law enforcement and employees will be increased. Technological improvements in algorithms will assist in improving network configuration and reducing obstacles.  This will increasingly allow the utilization of drones beyond the visual line of sight (VLOS), thus opening up the option of increased automation. Many governments are also focused on demystifying the UAV regulations to ensure aviation safety while at the same time reducing complexity. This will enable increased applications and deployment of UAVs.

The rising adoption of UAVs has come to the forefront of the consumer perspective. This has been particularly elevated by the spike in demand driven by the. Although mass penetration is still limited, the initial challenges that technological innovations usually pose have been surpassed and certain applications are witnessing increased adoption. In the recent past, people have successfully used it for governmental, commercial and even recreational applications. This adoption is only the beginning and the penetration of UAVs will significantly rise over the next ten years. This will be driven by the new avenues of opportunities in terms of demand but also by the technological advances in drones and changing regulatory scenario of the industry.

The Unmanned Aerial Vehicle industry is growing at a CAGR of 14.3% during the forecast period 2021-2026 and is expected to cross $50 billion by 2026. The growing adoption of new technologies such as artificial intelligence, sense and avoid systems, cloud computing in UAV, created significant demand in the forecast period. The incorporation of artificial intelligence in UAV has not only enhanced their capabilities but has also enabled them to carry out several activities such as take-off, navigation, data capture, data transmission, and data analysis without human intervention. Further increasing use of UAV in various military applications such as monitoring, surveying and mapping, and combat operations is also contributing to the growth of the market across the globe. Rise in need for surveying of vast land mass, which contains uneven ground and rocky obstacles, has created demand for UAV in construction sector. Furthermore, growing popularity of aerial photography has led consumers to purchase efficient drones and use them for photography purposes, is also driving market growth, Adding up to this the significant rise in the investments and contracts from defence sector of various countries is boosting the UAV market during the forecast period. In 2021, Israel Aerospace Industries (IAI) signed a $200 million contract to provide Unmanned Aerial Vehicles (UAS) services to India. According to a new report issued by the General Atomics. General Atomics received $7.4 billion MQ-9 Reaper contract with U.S. Air Force.  In 2019, AeroVironment, Inc., received a $17 Million firm-fixed-price contract to provide Puma AE II small unmanned aircraft systems (UAS), training and support to an allied nation. Significant rise in contracts and partnerships will drive the market in the forecast period.

The Technological scenario of UAVs is rapidly evolving. These advancements are not limited to one or two markets, but are expected to grow significantly across all industries ranging from residential and commercial to military applications. In 2019, Lockheed Martin Small Quad-rotor Unmanned Aerial Vehicle, Indago 3 was upgraded with high resolution thermal imaging capability by installation of high resolution infrared sensors which makes it capable for day or night operations. In addition to innovation, growing partnerships, acquisitions will also drive the market in the forecast period. In 2020, IAI entered into strategic partnership with India’s Hindustan Aeronautics Limited (HAL) and Dynamatic Technologies Limited(DTL) at DefExpo. The partnership aimed to reflect existing UAV capabilities developed by IAI over the years and promote the production of Indian UAVs, in line with the Indian Government’s “Make in India” policy. In January 2020, Red Cat Holdings Inc. acquired Rotor Riot in an undisclosed cash and stock deal. Red Cat Holdings intends to expand its UAV presence by combining their portfolios and expertise to facilitate growth for both the brands, particularly focused on FPV drones.

Among all the applications, the UAV market is dominated by the Recreational applications as they have the largest market share of $2.1 billion in 2020, growing at a CAGR of 17.4% during the period 2021-2026. The market growth is driven by the rising applications of UAVs in the monitoring and surveying sector. Moreover, commercial or recreational drones are also being used for monitoring disaster-affected areas, providing aid to the victims, and for search & rescue missions. The commercial Unmanned Aerial Vehicle (UAS) market continues to grow globally and was accelerated in the wake of the COVID-19 pandemic response. Autonomy and Artificial Intelligence have been and will continue to propel the market. These market drivers are promoting the adoption of commercial UAVs as autonomous flights reduce the need for expensive manpower. Meanwhile AI-driven data collection and processing also causes a time reduction gather and process data and thus allow more real time decision making.

The Adoption of UAVs is largely limited by the pricing. The average cost for Unmanned Aerial Vehicle depends on the endurance capacity, operating altitude, propulsion engine installed and most importantly the different payload mounted on these Unmanned Aerial Vehicles such as High-resolution cameras, EO cameras, IR camera, relay, AIS, MASNIT, SIGNIT, EW, GSM, MPR, ESM/ELINT and many other technology which provides durability, flexibility, efficiency and others according to the applications. However, the overall price is approximately ranging from $1,100- $5,000. The price range of the Unmanned Aerial Vehicle keeps on increasing depending on the materials used, labor costs, manufacturing process data and the rising technology advancement used for designing according to the applications and end-users.  As the Unmanned Aerial Vehicle are highly procured by the major end users such as First Responder services, Government agencies, armed forces and with the increasing popularity of UAV in the Filmmaking, Photography, Real Estate, Surveying, Mapping and other Recreational purposes has brought the availability of wide price range of Unmanned Aerial Vehicle in global market. Manufacturers need to spend highly towards making efficient and rugged Unmanned Aerial Vehicle to meet the desired needs of the customers.  This eventually adds to the purchasing costs of the product, thus rising its pricing standards.

Moreover, several countries are incorporating development of advanced Unmanned Aerial Vehicle replacing the conventional system for Intelligence, Surveillance and Reconnaissance (ISR) operations to ensure improved military operations in attacks and wars which is affecting the price range of the armor depending on the applications level. Additionally, price range also depends upon the maximum operating altitude, endurance, top speed and others. Majority of the companies have been providing various types of discounts and additional offers to increase their market demands in the Unmanned Aerial Vehicle Market. Major companies such as Lockheed Martin Corporation, Thales Group, DJI, Northrop Grumman Corporation, Israel Aerospace Industries and many others have been offering warranty period on their Unmanned Aerial Vehicle of about 1-3 years which is helping to provide better user experience. The overall price of the Unmanned Aerial Vehicle is also based on its power source. Different battery fuelled UAV are being developed by the manufacturers on the basis of its applications. For instance, EaglePicher, a leading manufacturing company known for its battery technology, energetic devices and battery management systems supplies field-proven energy storage systems for a number of Unmanned Aerial Vehicle (UAS) applications. EaglePicher was a pioneer in the usage of lithium-ion battery systems in UAVs particularly with the RQ-4 Global Hawk and the Aurora Excalibur VTOL Systems. Moreover, they supplied lithium-ion batteries for the Northrop Grumman X-47B (UCAS) demonstrator, which became the first unmanned vehicle to operate successfully from the deck of an aircraft carrier. These eventually adds to the purchasing costs of the product, thus rising its pricing standards.

While the current market is largely focused on applications in the military and recreational applications, new uses are emerging every year. Right at the forefront are new commercial applications driven by user demand as well as easing of regulations. With the implementation of rules by the government for using UAV for commercial and personal applications has brought a major opportunity for the growth of Unmanned Aerial Vehicle market in the forecast period. For instance, DJI, a leading manufacturer of UAS for commercial applications launched DJI Mini, a ground-breaking ready-to-fly FPV UAV that lets users of any skill level feel the thrill. It offers Immersive Flight Experience, HD Low-Latency Transmission, Intuitive Motion Controller, Emergency Brake and Hover and many others. On the other hand, Filmmaking sector has been providing year by year one of the best films with their outstanding cinematography which is carried out mostly by UAS. With its increasing applications in Photography as well as Videography, it is expected to provide market growth opportunities in the forecast period. Most players operating in the small UAVs market in North America are looking to develop small and automatic UAVs which will be programmed to hover over an area and embedded to sensors to provide information on various weather changes in advance. They can be implemented to in hurricane prone areas or spread out across the region to provide any information on the development of a hurricane or tornado. If these small UAVs are successful in providing environment information, it will be a key opportunity for the market over the near future. Northrop Grumman announced that the company is partnering with the National Oceanic and Atmosphere Administration to develop small UAVs which can detect and observe storms as they evolve. The company has got a contact for USD 30 million for this experiment. Police department in the North America are exploring various application of UAVs across countries in the region. Small UAVs might be used more for collection of data and better investigation of a crime scene. A key application of small UAVs by security forces is a key opportunity for the market growth. 

The application of UAVs by security and military is still new in the APAC region and the police force are still exploring a wide range of new application for UAVs. Breakthrough of new applications in the police force is expected to create new opportunity for UAVs in the APAC region. Small UAVs also poses key opportunity in surveillance of wild life in the region. There are a lot of illegal hunting and poaching that takes place in National Parks in Asia Pacific. UAVs are perfect for surveillance of the wild life, as they are small and wont have loud sound of the propellers which might scare the wild animals. Even poachers would get detected without them being actually knowing about it due to small size and lower noise level of the device. The application of UAVs in journalism is another key opportunity for the market growth over the next few years. The application of UAVs in the surveillance of dense forest in South America is a key opportunity for the market growth over the next few years. Wild fire can be prevented with the application of automatic UAVs which can be programmed to closely monitor the forest and send message in case there is any fire that is developing in the region. Small UAVs are perfect for wild life or forest surveillance. The UAVs don't make as much sound which disturb or scare the wild animals. Fighting crime with the application of small UAVs in the region is another key opportunity for market growth over the near future. There are many drug cartels that originate from South America, they use various innovative methods to smuggle goods to North America. UAVS can have multiple application that can help security forces to control such activities.  3D mapping is also an important application which provides key opportunity for the market growth for UAVs over the near future.  

Globally, there are a wide range of applications for UAVs which are still being explored. These application poses huge growth opportunity for the market growth over the near future. For instance a UAV can be used to map an area. It helps provide knowledge on the proposed construction site which is suitable for the construction of a particular structure. UAVs are deployed in commercial filmmaking and photographing applications to take photos and videos of buildings, greenfield and brownfield projects. Real Estate Companies use these files to advertise their properties. UAVs provides opportunity for market growth in the near future. UAVs can be used to collect data which can be used for educating the future generation. The small size of the UAVs enable the educational institute to explore various experiment with the institutional premises. UAVs can also be used to study various topography and plantation very closely giving the students a new dimension and allowing them to study a subject more closely. UAVs can be used to collect data from radioactive environment, surveillance of the plant. It can further provide incite or data on various equipment inside the plant.  UAVs are perfect to inspect wide range of machineries. They can be inserted inside the machinery for testing or collection of data. These are some of the applications which offer strong growth opportunity over the next future and these applications will continue to grow driven by end user demand as well as simplification of the current regulatory scenario. 

Unmanned Aerial Vehicles (UAVs) must abide certain regulations which are applicable across a wide range of countries. The International Organisation for Standardisation (ISO) has announced its first ISO-approved small UAS standards.  ISO 21384-3 will help resolve those challenges through providing an airworthiness framework for the global UAV industry, allowing for safer and more widespread use. In addition (ICAO) has addressed several issues in UAV. The International Civil Aviation Organization (ICAO) provides a fundamental international regulatory framework through Standards and Recommended Practices (SARPs), with supporting Procedures for Air Navigation Services (PANS) and guidance material, to allow routine usage of UAVs throughout the world in a safe and capable manner. ICAO anticipates that information and data pertaining to UAV will evolve rapidly as States and the aerospace industry advance their work. Similarly, European Commission announced its vision for creating a harmonised regulatory environment for all Member States for the application of UAVs. Under this vision, current EU Member State legislation would be replaced by common EU rules, with a view to further unlocking the potential of the small UAS market in Europe. Further application of UAVs require to obtain FAA 14 CFR Part 135 Certification to conduct commercial drone operations in U.S. airspace. FAA issued Part 135 certification for operators, type and production certifications for UAV manufacturers. It ensures the highest level of safety and quality in small UAS operations and manufacturing. Recently in many countries in Asia Pacific like India as made it mandatory to have a licence or registration number for all UAVs.

The major factor limiting the growth of commercial UAVs is the concern for safety. As testing and certification agencies and governments clamber to keep up with the safety and usage requirements of this revolutionary industry, one thing is emerging – the implementation of pertinent regulations and certification standards similar to manned aircraft. In 2011, the International Civil Aviation Organization (ICAO) of the United Nations published Circular 328, which focuses on UAVs being capable of providing similar safety as manned aircraft and thus meet the stringent government regulations for flight systems. The ICAO also differentiates between autonomous and manned drones and focuses its regulations on the currently adopted commercial and consumer aircrafts. The ICAO expects only these manned drones to play a major role in the short to mid term. The European Union put forth a new set of regulations in 2014 focused on the role of drones in consumer’s safety, security and privacy. Unmanned Aircraft Systems (UAS) Advisory Group was set up in 2015 by the United Nations’ civil aviation arm to be at the forefront of establishment of rules and regulations around the world for consumer safety surrounding UAVs. The Advisory Group includes the United States, UK, France and China, as well as industry bodies for Drones and Aviation. In December 2017, the International Air Transport Association (IATA), a global airline trade body, pressed governments to ensure enforcement of regulations to curb reckless and dangerous flying of recreational drones. 

2021 was an extremely influential year for UAV laws and rules with a number of countries changing their drone regulatory strategy. In December 2020, new regulations took effect in the European Union with increased stringency for drone operators/ remote pilots. These Operators would only be to register in the country in which they live, or have their main place of business and not in other countries. The European Union Aviation Safety Agency also issued standards for drone usage at airports and rules for air traffic management surrounding drones which would be implemented by July 1, 2021. Meanwhile in the U.S, the FAA announced new rules for remote drone operation. However, there is a shift taking place in the regulations, focus is being given to reducing the complexity surrounding UAV regulations.

The drone regulations have been eased in a number of countries globally. This includes reduction in the strict nature of rules surrounding UAV flight, red tape for companies and drone owners. The new liberalized Drone Rules such as those in India in 2021 are expected usher in growth in the drone market. In India, the nascent drone ecosystem will be propelled as the new rules will fast track plans of drone companies with the government having done away with a lot of red tape that essentially delayed project launches. This easement of drone regulations are set to transform core sectors of the economy including logistics, agriculture, mining, infrastructure, surveillance, emergency response, transportation, geo-spatial mapping, defence, and law enforcement industries through the deployment of drones for various applications.

Further Europe and the U.S have shown commitment to UAV regulation to provide clarity and a clear way forward on UAV usage. One of the major regulatory changes is the importance being placed on assessing the digital remote identity. This was, in part, a response to the rapid growth of drones now operating in both regions, and with little means to identify them. The new regulations form a basis for rule compliance and accountability, improving safety and security. In December 2019, Europe introduced a new EU Regulation 2019/947, which together with the EU Regulations 2019/945 form the framework for safe UAS operation in the European Skies. It takes a risk-based approach and sets out three categories of drone operation with dedicated CE marking for the open category. Such regulation also covers the remote identification, requiring for the open category to broadcast the information by means of local connectivity (e.g. Bluetooth or Wi-Fi); but allowing the use of network type connectivity (e.g. cellular) for the other categories. 

In December 2020, the US Federal Aviation Administration (FAA) showed its commitment to market regulation by ruling that, from 2022, most domestic drones will have to broadcast their location digitally, via a Remote ID. These stipulations were largely welcomed by commercial drone producers, albeit with an awareness that they will need to remain engaged with regulators to ensure that rules maximise not only safety, but commercial viability as well. In Europe, the FAA’s equivalent the European Union Aviation Safety Agency (EASA) has recognised this distinction by including cellular connectivity in its Remote ID regulation. Alongside regulations such as Remote ID, advances in drone technology are making it possible to manufacture smarter and safer drones. Newer drones are increasingly improving their AI and beyond-line-of-sight capabilities, and can be designed to fly safely at night, improving the likelihood of regulatory approval for use above populated areas. Hence these certifications and regulations enhances the market growth in the forecast period 2021-2026.

The market for Small Unmanned Aerial Systems is likely to benefit enormously from the rising safety concerns of Armed forces and different agencies around various parts of the globe. Rise in the application of small UAVs by different Government agencies has been promoting the growth of Small Unmanned Aerial Systems in global market. Increasing safety concerns of armed forces and government agencies, such as to conduct reconnaissance missions and track illegal activities without risking their lives has been a major driving factor for the growth of small UAS in global market. For instance, applications of autonomous small UAS for surveillance in army bases, border regions and places of gatherings, so that they can provide visual data of any sort of threats instantly to the operators. Moreover, application of small UAS for surveillance in base camps, military convoys to safeguard army personnel has been a major driving factor for its growth. 

One of the major factor driving the growth of the Small Unmanned Aerial System market is the growing applications of UAVs in commercial activities especially in the field Oil & Gas Industries and Agriculture. UAVs are capable of completing a wide range of commercial applications. They can be used in oil & gas facilities for security, surveillance, emergency response and infrastructure inspection. In sea ports, UAVs can perform applications such as mapping, surveying, operational oversight, port monitoring and traffic control. .These end-users have been using UAVs to gather large information which will offer them in making desired strategic decisions. For Agriculture sector, UAVs offers inspection of crops in huge farmlands in quick time, flying at low altitude provides close analysis of crops and most importantly with outstanding spraying capabilities mounted on it reduces the risk of pest damages on crops. In addition to this, UAVs have become increasingly adopted in the commercial sector in various application areas including construction, mining and surveying and mapping. All these growing applications will propel the usage of Unmanned Aerial Vehicles.