Whitepaper outlines economic impact of BVLOS drone operations

By Patrick C. Miller | February 13, 2019

Flying commercial operations beyond visual line of sight is a milestone the unmanned aircraft systems (UAS) industry currently is striving to achieve, but what would be the economic impact of reaching this goal?

A recently released whitepaper from drone technology provider PrecisionHawk and Skylogic Research outlines the areas of opportunities for BVLOS inspections with electric utilities, insurance companies the oil and gas industry and other businesses. According to the paper, what motivates companies to explore BVLOS operations with UAS are safety, costs, data quality and consistency and time to value.

For example, in the insurance industry, the paper said cost savings for the companies studied would be $15 million over three years—a 20 percent reduction in assessing wide areas of damage. BVLOS drone inspections of electric utility transmission lines would cost $200 to $300 per mile, compared to $1,200 to $1,600 per mile with helicopters.

In the oil and gas industry, the paper said five to 10 manual inspections of well pads per day costs $80 to $90 per pad. Using UAS technology for BVLOS inspections, 100 to 125 pads could be inspected each day at a cost of $30 to $50 per well.

“Why we were driven to putting a whitepaper like this together is that we were starting to see fairly constant trends in the conversations we were having across the electric utilities, across the oil and gas companies and the insurance companies where we would dig into the conversations and understand what their existing costs were and their safety concerns,” said Tyler Collins, PrecisionHawk vice president.

Colin Snow, CEO and founder of Skylogic Research, said the company took on the role of an independent analyst, studying the economic impact of BVLOS operations from the bottom up rather than from a vendor’s perspective.

“We actually talked to the people who are either doing it or considering it and what they’re looking at in their business plans,” he said. “That was our goal, and we had cooperation from the companies we interviewed. We talked to representatives from more than a half dozen companies about their intentions or their operations. Our goal was really to cut through the hype and make sure that when you talk about the benefit of beyond visual line of sight, there’s a clear understanding of what the costs and the risks are.”

Collins sees a number of benefits to studying the economic impacts of BVLOS drone operations, both on the commercial side and on the regulatory side.

“A whitepaper like this is going to provide a significant amount of benefit is with those companies that are kind of set in their ways and need to have it proven to them that this actually is a benefit,” he said. “Some companies might be hesitant to explore new technologies because they’ve been doing the same thing for so long.”

PrecisionHawk has been providing the FAA with economic data through its participation in the agency’s Pathfinder Program over the past four years, but Collins said the whitepaper also helps answer questions about how economic benefits compare to the risks of BVLOS drone operations.

“I think we’re very close to long-range beyond-line-of-sight flights regularly under a waiver,” he explained. “We will see that this year. We believe that within the next several years, we’re going to be able to have broad BVLOS available for anybody who wants to go do that through a regular process, just like we have with visual line of sight today. That’s the hope.”