In December 2017, a McKinsey & Company study revealed that the value of drone activity in the United States had risen from $40 million in 2012 to $1 billion in 2017. The study further projects that commercial UAS will have an annual impact of $31 billion to $46 billion on the U.S. GDP by 2026. Investment into the commercial UAS industry has intensified with more and bigger players (like Lockheed-Martin, Northrup-Grumman and Boeing) joining the movement toward the full integration of commercial UAV’s into the National Airspace. The U.S. Government is doing its part as well with the FAA Reauthorization Act signed into law by President Trump on October 8th of this year, the recent launch of the FAA UAS Integration Pilot Program (“IPP”) in 10 government sites across the U.S., and the FAA’s recent public statements that they are “Open for Business” backed up with real movement in the direction of integration.

With the reality of integration comes the reality of risk. While rare to this point, we have seen real-life examples (as well as simulated ones) over the last year of what can happen in integrated skies. Like any advance in technology, while initially compelling to the public at large, once the risks become real in the form of accidents and especially loss of life, acceptance becomes a huge challenge. These issues will develop in city council meetings, state legislatures and courtrooms across the country as the risk issues play out over time. Everyone is playing their part in moving toward safe integrated skies and the benefits this world will bring, yet the players in this newly expanded world of aviation cannot afford to turn a blind eye toward the necessity of preparing for the inherent risk that is coming as well.


Moving Toward Commercial Flight Integration

Earl Lawrence served as the Director of the Unmanned Aircraft Systems (UAS) Integration Office for the FAA until his recent promotion, and as such has a keen understanding of what this integration should look like. Before his promotion was announced, I connected with him to ask what he believed to be the greatest sign of breakthrough toward full integration of commercial UAV’s into the National Airspace. He was excited to respond that there is a newfound “alignment in objectives and approach between Industry, the FAA and the Administration” that he has not seen before. “The industry is growing up and the FAA is responding.” He truly believes that at this stage in the process the “FAA is ready” and that the UAS industry are really “bigger drivers than the agencies” in what he sees as the “transition” of commercial UAV flight into the regulatory framework that is already in place. With this viewpoint in mind, Mr. Lawrence sees the most significant breakthrough toward integration being the recent increase in applications for FAR Part 137 “Agricultural Operations” as well as FAR Part 135 “Operations for Commercial Operation or For Hire” indicating a newfound acceptance by industry to bring UAV use into the framework of commercial operations that is already in place.

Fueling this alignment are a series of recent developments that will surely move toward the ultimate goal of a broader approval of commercial flight “beyond visual line of sight” (BVLOS), “over people” and “at night” – which are at the heart of the goal of full integration.

FAA UAS Integration Pilot Program (“IPP”) – The IPP is a significant move forward by the FAA in the use of testing sites for unmanned flight selecting ten State, Local, and Tribal Governments to partner with the private and non-profit sectors. From the University of Alaska in Fairbanks to the City of San Diego to the Choctaw Nation of Oklahoma, these sites will each have a unique focus, but a common goal of testing UAS in order to gain buy-in from communities and important data for much-needed regulation. With projects focusing on detect and avoid technology, remote identification, package delivery, and Unmanned Traffic Management (“UTM”), these sites will build on testing already in place with the aim of providing a confidence and consistency in approach for this new era in aviation to take flight.

FAA Reauthorization Act of 2018 – The FAA’s press release on October 5th states, “[t]he FAA’s Reauthorization delivers a safer, more secure and efficient aviation system to the traveling public and helps fuel economic growth and competition.” While this massive piece of legislation (which authorizes $96.7 billion in funding for federal aviation programs through 2023) covers a number of aviation issues from airliner seat size to airport service charges, the key provisions for the future of aviation deal with the integration of UAV’s into U.S. airspace.

This landmark piece of legislation provides significant provisions aimed at furthering the move toward commercial UAV integration.

  • Singles out BVLOS for “tremendous potential to spur economic growth” in its urging for further movement by the FAA in this area;
  • Supports and prioritizes UTM as a key factor going forward toward integration;
  • Requires expeditious approvals for safe operations with blanket approvals rather than FAR Part 107 waivers;
  • Authorizes Small Unmanned Aircraft (“sUAS” – less than 55 pounds) manufacturers to replace traditional airworthiness certification with self-certification using industry design standards;
  • Allows the FAA to create a Remote ID system for UAVs; and
  • Requires the FAA to update existing regulations to allow UAS package delivery within one year.

While the FAA is still considering its response to the Act, Mr. Lawrence sees the critical point to the future of safe and integrated skies as being the establishment of a system of remote identification of UAVs allowing for full authority over all aircraft in the U.S. airspace. Brian Wynne of AUVSI agrees, stating in an October 3rd press release that “[t]he ability to remotely identify and track UAS is the linchpin needed to advance the UAS industry, and it is critical for the ultimate realization of expanded operations, such as beyond line of sight and package delivery.”


The Reality of Risk in Integrated Skies

We have yet to see more than a couple of verifiable incidents involving UAVs. However, per the FAA webpage entitled UAS Sighting Report, “[r]eports of unmanned aircraft (UAS) sightings from pilots, citizens and law enforcement have increased dramatically over the past two years. The FAA now receives more than 100 such reports each month.” Furthermore, considering these are primarily small, lightweight hobby aircraft, this is a serious issue to weigh and manage now, before actual incidents and accidents become more of a reality. Sooner or later near misses will become hits.

Black Hawk Mid-Air Incident on 9/21/17 – In what is being reported as the first midair collision involving a drone, a U.S. Army Sikorsky UH-60M Black Hawk on security patrol over New York Harbor near Hoffman Island, collided with a DJI Phantom 4 (13 inches in diameter and weighing 3 lbs) at 300 feet. The UAV was apparently flying an automated return after the operator (unaware of a Temporary Flight Restriction [TFR] in the area due to a UN General Assembly meeting) intentionally flew the aircraft beyond line of sight. The damage to both aircraft were reported by the NTSB as follows:

“A 1 1/2-inch dent was found on the leading edge of one of the UH-60's main rotor blades, surrounded by various scratches and material transfer. Some cracks were observed in the composite fairing and window frame material. The Phantom 4 sUAS was destroyed and several components were lodged in the helicopter.”

After the collision, the pilot-in-command took control and immediately returned to base at Linden Airport, New Jersey. While relatively uneventful, this mid-air incident, particularly with a rotor strike, begs the question of what could happen with a larger UAV or a smaller fixed wing aircraft or helicopter.

Charleston Robinson R22 Accident on February 15, 2018 – While the NTSB is still at the preliminary stage of its investigation into the cause, and the drone and its operator have not reportedly been located, a Robinson R22 Helicopter accident earlier this year has been blamed on a drone encounter. A student pilot practicing low altitude hovering in a remote area in Charleston, South Carolina reportedly encountered a drone heading directly toward him at eye level as he turned toward forward flight.

The NTSB Preliminary Report describes the encounter as follows:

“The instructor further reported that as the helicopter transitioned through effective translational lift, it climbed above the 15-ft tree line and encountered what he described as a small, white, quadcopter that was at eye level and converging head-on. The instructor took the flight controls and made a hard-right turn and applied aft cyclic input. He then leveled the helicopter, but it began to descend. The helicopter landed hard, and the tailboom separated from the fuselage. The instructor rolled the throttle off, but the helicopter spun to the right and rolled onto its right side. The helicopter sustained substantial damage to the tail rotor drive shaft.”

While government and industry leaders are testing and developing advanced “detect and avoid” technology and the FAA is creating a regulatory framework to make the integrated skies safe, the potential for mid-air encounters like those described above will only increase as commercial UAV use (both large and small) increases to projected levels. In a letter to Congress dated February 12, 2018, Airlines for America which represents the Airline Pilots Association (“ALPA”) and the National Air Traffic Controllers Association (“NATCA”) acknowledged this reality as it exists today by calling for immediate regulation as “[t]he likelihood that a drone will collide with an airline aircraft is increasing.”

University of Dayton “Risk in the Sky” Video – In collaboration with the Sinclair College UAS Training and Certification Center, the University of Dayton Research Institute (UDRI) created waves in the UAS community when it issued a press release on September 18th of this year called “Risk in the Sky” intended to prove that “large aircraft won’t always win in collision with small drones.” In testing “designed to mimic a midair collision of a drone and a commercial transport aircraft at 238 miles per hour,” the Institute “launched a 2.1 pound DJI Phantom 2 quadcopter at the wing of a Mooney M20 aircraft.”

What got the attention of the UAS Industry (as well as the public) was the result. “The drone did not shatter on impact but tore open the leading edge of the wing as it bore into the structure, damaging its main spar.” The group leader for impact physics at UDRI, Kevin Poorman, is quoted as stating that “[w]hile the quadcopter broke apart, its energy and mass hung together to create significant damage to the wing.” After criticism of the test (including strong resistance from DJI), UDRI added further substantiation for the test results in an addition to its release stating...

“The test was intended to compare a bird strike and a drone strike, using a drone similar in weight to many hobby drones and a wing selected to represent a leading edge structure of a commercial transport aircraft, Poormon said. The drone and gel bird were the same weight and were launched at rates designed to reflect the relative combined speed of a fully intact drone traveling toward a commercial transport aircraft moving at a high approach speed.”

See “Risk in the Sky”

Although there is a range of opinions on the legitimacy of the test, the public impact was made as the video of the testing went viral on YouTube and hit a broad spectrum of the news media. The reaction to the Dayton test may well be a precursor to what we will see develop over the next year as more incident and accidents inevitably happen, and we push closer to full integration in the United States.

Commercial flight remains (by far) the safest way to travel with “[a]lmost 100 million U.S.-operated airline flights, carrying several billion people [having] taken off and landed safely in this country over a nine-year span” (Fortune, April 18, 2018). Before shrapnel from the engine of a Southwest Airlines 737-700 took the life of a mother of two on April 17th of this year, we had not seen a death from a U.S. certified commercial aircraft since February of 2009 near Buffalo, New York when a Colgan Air Bombardier Dash-8 Q400 stalled in weather and killed all 49 on board and one person on the ground.

Despite this unbelievable safety record, “fear of flying” consistently remains on the top 10 list of fears and “severely” affects 6.5% of the U.S. population (based upon a 2018 study of the National Institute of Mental Health). It is a specifically diagnosed phobia in the most current Diagnostic and Statistical Manual (DSM-5).

Statistics prove that this is an “irrational” fear, yet it is clearly ingrained in the population and played out in courtrooms across the United States where injuries and deaths in aviation litigation are valued exponentially higher than in other cases. The increased exposure in aviation accident cases, coupled with the fact that juries have a hard time accepting the fact that a pilot (to whom they have given full control of their safety and who is glorified in society) could either negligently or intentionally cause an accident, means that the risk often falls on the aircraft manufacturers and component/system suppliers. This is despite the fact that a staggering 80% of commercial aviation accidents are caused by human error, primarily by the pilot (based on 2015 Boeing study).

The pressing issue as we move toward integration is how the public will deal with taking away the one thing that gives them peace – the pilot in the cockpit. While commercial aircraft have been “fly by wire” or “glass cockpit” for years now (meaning, among other things, that modern aircraft use computers to take-off, land, and fly without pilot interaction after programming), separating that pilot from the actual aircraft is another psychological matter altogether. Time will tell how the public will react to the first UAV caused serious accident, particularly involving loss of life, and then how the legal system will deal with fault and level of damages. Needless to say, it should be anticipated that “Drone Law” litigation will merely follow and possibly exceed what we have seen for decades in the risks and high damages associated with the practice of Aviation Law.


Are You Ready?

In discussing the risk issues involved in the exciting evolution toward integrated skies with Earl Lawrence, he believes that those close to or coming out of the aviation industry “understand and think about” risk issues as part of their business, but “everyone” is now “seeing the reality of risk.” This reality goes well beyond UAV manufacturers and UAS suppliers, but to police and fire departments, construction companies, coal mining operations, utility companies, and film studios. For better (and sometimes worse), as Mr. Lawrence has learned in his three years in the FAA Integration Office, a lot of groups are waking up to a new normal that they are “really in the aviation business.” This requires a new way of thinking in the area of risk.

Based upon my years litigating aviation cases, one thing becomes clear for those facing the new reality of risk involved in being part of the business of UAS in the upcoming integrated skies. It is imperative to create and sustain a “Risk Limitation Plan” which goes well beyond having the proper aviation insurance coverage. While this is the time to establish a relationship with the aviation insurance industry now bringing its 75 years of commercial aviation experience into the world of unmanned flight but involves all aspects of business as the industry must foresee and prepare for the other reality of risk – litigation.

This requires sober and sophisticated analysis of marketing; sales; design; manufacturing; warranties; supplier contracts both up and down (with a focus on risk shifting); document preparation, retention and control; internal and external communication; as well as response and follow-up to complaints, warranty returns, incidents and accidents from the field. This must all be done with an eye toward training your team in the reality of the risk in placing a UAV in skies above people and property and in the same space as larger conventional aircraft.

In my experience, there are two main areas that are often overlooked in companies new to the world of aviation risk. The first is a strong and sustainable Safety Committee that regularly deals with issues that arise in design, manufacturing, sales, testing, field support and management, with representatives from each group that can respond to potential safety issues as they develop. The second is a well trained and experienced Incident/Accident or “Go Team” ready to immediately respond when something goes wrong, time is of the essence, and so much is at stake. This includes not only in-house experts with strong interpersonal skills, but also an insurance and legal team with which you have created strong relationships and can fill in the gaps when crises hits. The first group is invaluable to avoid the risks that can often sneak up on a company or hide under the surface until it’s too late. The second provides tremendous protection from things getting out of hand when the worst-case scenario actually happens and allows you to quickly get ahead of and control the crises on the front end while limiting the damage on the back.

Like most businesses involving emerging technology and innovation, the benefit to society of integrating skies with UAS will ultimately overcome the inherent risk – the question is “Are You Ready?”