Drones can fly up to 500 feet under new Federal Aviation Administration regulations. But there is no limit on the revenue that drone makers can generate.
Thanks to the new rules, Monrovia-based AeroVironment Inc. is among the companies expecting to be able to tap into new markets and revenue streams with fresh products.
The firm expects to post up to $280 million in revenue next year, an 8 percent increase from $259 million in 2015 according to Steven Gitlin, vice president of AeroVironment.
“The FAA regulations are promising,” he said. “They streamline the process for operating legally in the national aerospace system and that’s going to be an important step for a number of our customers.”
Drone operators were previously required to be licensed pilots and wait for months to gain permission to use the unmanned flying vehicles. But under rules going into effect at the end of next month, they can fly commercial drones weighing less than 55 pounds without a license as long as the unit stays within an operator’s line of sight.
That is expected to boost demand from a wide range of industries.
“The rules will promote the development of drones for the agriculture and film industries,” said Michael Drobac, director of the Small Unmanned Aerial Vehicles Coalition, an industry advocacy group in Washington, D.C. “Companies such as AeroVironment will be impacted in a positive way.”
New camera-equipped drones for the oil, gas, and real estate industries are also set to be introduced by the industry.
The regulations are set to generate more than $82 billion for the U.S. economy and produce more than 100,000 jobs over the next decade, according to the FAA’s website.
Worldwide sales of drones to companies and individual operators reached $4.5 billion last year, up from $3.3 billion 12 months earlier, according to San Antonio-based market research group Frost & Sullivan.
AeroVironment might be getting a lift from the new regulations but it hasn’t been smooth flying for the company recently.
Once the Pentagon’s largest supplier of military drones, including Switchblades, weaponized toy-size drones that can kill a target, the company took a hit as the recession, cuts to government spending, and the drawdown of U.S. troops in Iraq and Afghanistan contributed to a steep decline in revenue. Revenue in 2013 was $240 million, down from $325 million the previous year.
Founded in 1981, AeroVironment specializes in manufacturing unmanned aerial vehicles and rechargeable battery technology for electric vehicles.
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