The question is not, “Are drones a business opportunity for the rotorcraft industry?” Multiple industry players, like those who spoke at R&WI’s Rotorcraft Technology Summit in September 2016 and the National Business Aviation Assn.’s annual convention in November 2016, say the answer to that question is generally, “Yes.” The success of some drone operators, coupled with FAA efforts to integrate unmanned aerial systems (UAS) into U.S. civil airspace, make a compelling argument for the benefits of getting into the drone business. The bigger question involves taking the next step. How can drones be a business opportunity?

High-tech professionals, counterparts in aviation and hobbyists are the main stakeholders in the industry for commercial small drones. People from all three categories can — and are — continually opening up shop for business. Competition is everywhere. In the opinion of some, aviation professionals have an edge over the competition. Kevin Gould, CEO of drone service provider Hawk Aerial, said his aviation background gives him both a real and perceived advantage in the industry. His background includes executive positions at Piper Aircraft, Honeywell-owned Bendix/King and Boeing.

“The perceived part is when I go to talk to customers, they see my background, and then they see that my pilots are primarily airline pilots. All of a sudden that builds credibility right out of the block,” Gould said. “And then the real side is that we’ve been trained in safety and procedures and following checklists. We understand how the FAA operates and how to interact with them. I think it is a tremendous benefit.”

Many aviation professionals also have inherent knowledge of fleet management and maintenance — things a hobbyist or software engineer may not have. Brad Hayden, president and CEO of Robotic Skies, has a background in aviation and high tech. Robotic Skies is a global network of drone repair facilities comprised of independently owned and operated Part 145 repair stations. Hayden grew up working as a repairman and dealer for his family’s avionics sales and service business. Although the FAA’s Part 107 doesn’t have ongoing airworthiness requirements, Hayden said drone manufacturers and operators see the value of fleet maintenance, especially services coming from aviation shops.

“I realized that most of the companies that [were] going to be coming into the [market] were either going to be high-tech companies or they were going to be remote-control companies — R/C modelers,” Hayden said. “Those companies don’t have really much of an idea on how to maintain a fleet of high-performance commercial aircraft. So I recognized that there would be a very interesting opportunity if we could actually figure out how to support this emerging market of aviation.”

Hayden left Aspen Avionics to pursue Robotic Skies, which he had up and running at the beginning of 2014. He saw that drones were a business opportunity on which he did not want to miss out. Gould, who attributes his interest in drones to Hayden, felt the same way. He noticed the flight stability and programmability, was impressed by the first-person-view goggle capabilities, and the wheels immediately started turning.

“I saw this technology and I was just stunned. I thought, ‘You know, general aviation has … been on a general decline. This is the next big thing in aviation,’” Gould said. “The autonomous flight and the stabilized flight with the technology that developed around the solid-state miniaturized, very inexpensive, [inertial measurement unit] — it just stunned me. That kind of made up my mind right there.” Gould said he was working at Bendix/King at that time.

While Robotic Skies entered the market in somewhat of a niche in drone maintenance, Hawk Aerial has focused on a niche of its own since its creation. On its website, the company lists cell and electrical transmission tower inspections and rigging among its services. But Gould said the main offering he markets is vineyard drone flight services. At Hawk Aerial’s base in Saint Helena, California, in Napa County where vineyards are plentiful, the company has partnered with VineView Scientific Aerial Imaging and SkySquirrel Technologies on vineyard management services. Hawk Aerial uses a SkySquirrel drone with a Quanta camera to collect data that is converted to analytical maps, like VineView’s Calibrated Enhanced Vegetation Index. “Real estate photography — you know any kid with a [DJI] Phantom can go do that. There’s tons of competition, and prices are very low,” Gould said. “What we do is very, very specialized. In fact, we don’t have legitimate competition. And the reasons [for that] are the sensors that we use and [the fact that] the processes for picking these images and making them into specialized maps is proprietary.”

Choosing a specific market segment and teaming with companies that can enhance the offerings are moves that Richard Marcus, director of business development for Era Helicopters, might suggest to a company interested in entering the commercial drone arena.

“Can you defend a competitive advantage using these things?,” Marcus posed to attendees at R&WI’s 2016 Rotorcraft Technology Summit in Fort Worth, Texas. “Are there use cases in your business today — whether it’s electronic newsgathering, or search and rescue, or other areas — where [drones] are going to either attack your current business or augment your current business?”

Hawk Aerial CEO Kevin Gould has a few pointers for any operator considering unmanned technology:
— Embrace it, don’t fight it.
— Understand what you’re getting into; learn about drones and consult people who already have experience.
— Try out an inexpensive drone, such as the discontinued DJI Phantom 3. Buying a camera and an autonomous flight program to test out wouldn’t hurt either. 
— Look for a positive business case.

Just as Hayden chose to enter the drone market with a business he already had experience in, and Gould’s business focuses on an uncommon specialty, Era has elected to enter the drone market with one of its core segments: offshore oil and gas. Marcus said it took him three years of evaluating drones and identifying a market position in which Era could be competitive. In August 2016 the company announced its agreement with Total Safety. The pact enables Era to launch a drone service capability, supplying unmanned aircraft to Total Safety’s inspection services.

“Between the two of us,” Marcus said, “we think we can, to some degree, utilize our relationships in the oil and gas business — where we’re pretty well embedded — to create a competitive advantage that we feel we could potentially protect.”

Era’s drone service portfolio also includes surveys, mapping, imagery, and construction and engineering, which aligns with its rotorcraft service offerings. Marcus said the end goal for Era is to offer unmanned services with large aircraft, like the unmanned K-MAX that Kaman is developing with Lockheed Martin. But he said his business strategy involves “dipping your toe in the business and understanding what the business looks like and [finding] areas where you can take your core business and launch a smaller new business.”

That being said, Marcus was sure not to take all the credit for Era’s move into the drone market. He told summit attendees it started with Dave Oglesbee, who preceded him at Era. Oglesbee’s aviation resume is extensive and includes positions in the military and as chief pilot for Florida Fish and Wildlife. As one of his current professional activities, he serves as the president of Aspect Aero, a drone service provider that offers airborne security, public service and wildlife management.

“I’m very familiar with having done everything from duck surveys and wading birds to alligators and sturgeon surveys, so I understand how it’s done,” said Oglesbee. “I realized that the unmanned aircraft could provide the vast majority of services to the end users, whether they’re public agencies or private entities that want to manage wildlife.”

Oglesbee began realizing the potential of unmanned systems in 2007 when he was working at Sikorsky on the Fire Scout program. He watched that unmanned Schweizer 330 fly during U.S. Navy testing, as well as with other unmanned aircraft, and it dawned on him what effects drones could have on aviation. The potential commercial implications that Oglesbee might have seen a decade ago are now coming to fruition.

His advice is to not be a spectator. Drones have not taken over the market yet. But once the FAA decides on regulations permitting operation beyond line of sight, Oglesbee thinks unmanned aerial systems will become all the more prevalent. (At this point, U.S. drone operators must obtain FAA waivers to fly beyond line of sight.)

“Somebody is going to [provide drone services in your line of business], and inevitably it’s going to take away part of your business,” he said. “It might as well be you taking away part of your own business rather than letting somebody else have it. Once the line-of-sight problem is solved, I think you’re going to see a tremendous explosion in use of drones,” he said. “The end user, the customer, is looking for the technology brought on board. So if you’re a helicopter operator I would definitely be looking at [drones] as a way to protect your own business.”

Some companies are making strides in beyond line-of-sight operations. BNSF Railway, for example, is working with avionics companies and the FAA to figure out how to do it safely. You can read more about BNSF on our online digital edition.

One characteristic of the drone industry that sets it apart from traditional aviation is the speed at which it changes. Hayden refers to it as “internet time.” Oglesbee joked that if you’re at a drone technology show and you start at Row 1, by the time you get to Row 15 that first row is obsolete. Gould said that staying nimble is key to keep up with the pace at which technology is coming to market, but aspirants should be aware that quality sometimes gets left behind in the race off the line. If the customer demand is there, which it most likely is, there may be a compelling business case.

“In the long run, I think you’ll be helping your company be a leader, and a competitive advantage will accrue to the company by being one of the first ones to get onboard with drone technology,” said Gould in encouragement to those thinking about getting into the drone business. “It’s coming. It’s going to be here and it’s not going to [take] that long. So learn about it now and embrace it.”

BNSF Railway, FAA Partner for Beyond Line of Sight

BNSF Railway is uniquely positioned to spearhead the beyond-line-of-sight effort. As BNSF’s unmanned aerial systems (UAS) program director, Todd Graetz, explained during a panel at NBAA last year, the railway already has known flight routes that are heavily mapped, and the trains are currently remotely guided and dispatched. With the need to survey its 36,500 miles of track that runs through 28 states and two Canadian provinces, BNSF decided to tackle drones. However, because the drones’ main purpose would be to collect data, the company put the UAS program under the jurisdiction of its technology services division instead of its corporate aviation division.

“Everyday there’s roughly 500 people on that track somewhere, or looking at a bridge, underside of the bridge, on top of the bridge, looking at the right of way, inspecting vegetation — I could go on and on about all the things that they’re doing,” Graetz said. “We run an incredibly safe environment, but it’s an unforgiving environment. And we’re a company that is pathologically focused on hedging risk out of our operations. Therefore, any tool, no matter how small, if it can make a basis point adjustment in potential risk, it’s something we’re interested in. And of course, unmanned aircraft play a great role for us in giving us the ability to supplement what we’re doing — it’s an additive — without subtracting.”

The company’s safety-first mentality is what Graetz attributed to BNSF’s partnership with the FAA. The railway joined the FAA’s Pathfinder Program to explore the challenges of using drones to inspect rail-system infrastructure beyond the line of sight of a pilot. Graetz said he hopes the collected data would help regulators and the community learn how to integrate drones into U.S. national airspace safely.

Graetz was appointed to the UAS program on a 90-day term in late 2013. Right away, he said, the railway developed capability and operated under Section 333 of the FAA Modernization and Reform Act of 2012 (FMRA). It now operates under both the 333 exemption certificates of authorization (COA) and Part 107 authorizations. BNSF has multiple drone teams currently flying, mostly in the western half of the U.S. The company has certificates of authorization in the airspace, including Class B and Class D. The first beyond-line-of-sight operation took place in 2015 as a joint project between BNSF and Boeing’s Insitu. An Insitu drone was able to fly a successful mission for the railway, but it brought to light the need for purpose-built sensors and systems. BNSF needs the drones to take pictures with a quarter-inch resolution from 350 feet away at 40 knots. Aggregated, the imagery comes to about 300 gigabytes at two shots per second, building an overlapping map of hundreds of miles of track. Furthermore, BNSF needs technology capable of reading the data quickly. The railway has co-developed analytics software, “Rail Vision,” that can assess track conditions using the overlapping images.

But just because the technology department at BNSF is in charge of the drone program doesn’t mean aviation concepts aren’t borrowed. After all, the railway has a great resource in NetJets, its sister company under parent Berkshire Hathaway Inc. BNSF obtained a number of experiential certificates by “going down the road that one might go down if they were going to ultimately certify an aircraft,” as Graetz said. And one day, he said, he imagines the company will go down that road. The railway leveraged its geographic information system to build its “Rail Flight Planner,” which allows nonpilots to plan missions.

The company is also exploring systems like ADS-B from Harris and C2 radios from Rockwell Collins, Graetz said. BNSF has even tested drones in the airspace alongside aircraft, having them “try to sneak in” and find the drones to catch unaware remote pilots (the experiment ended with the pilots never having been caught unaware).

With the ability to borrow from the aviation community and the railway’s own remote system, and use its existing network infrastructure, BNSF Railway continues to test the limits of beyond-line-of-sight drone operation. R&WI