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TheStreet Open House

Commercial Drones Take Off Around the Globe; U.S. Lags

Stocks in this article: BADPZ

The helicopters went into use five years ago in South Korea, and last year in Australia.

Television networks use drones to cover cricket matches in Australia. Zookal, a Sydney company that rents textbooks to college students, plans to begin delivering books via drones later this year. The United Arab Emirates has a project underway to see if government documents like driver's licenses, identity cards and permits can be delivered using small drones.

In the United Kingdom, energy companies use drones to check the undersides of oil platforms for corrosion and repairs, and real estate agents use them to shoot videos of pricey properties. In a publicity stunt last June, a Domino's Pizza (DPZ) franchise posted a YouTube video of a "DomiCopter" drone flying over fields, trees, and homes to deliver two pizzas.

But when Lakemaid Beer tried to use a drone to deliver six-packs to ice fishermen on a frozen lake in Minnesota, the FAA grounded the "brewskis."

Andreas Raptopoulous, CEO of Matternet in Menlo Park, Calif., predicts that in the near term, there will be more extensive use of drones in impoverished countries than in wealthier nations such as the U.S.

He sees a market for drones to deliver medicines and other critical, small packaged goods to the 1 billion people around the globe who don't have year-round access to roads.

Later this year, Matternet plans to start selling to government and aid organizations a package that includes a drone and two landing pads. On the return trip, the drones can carry blood samples bound for labs and other packages.

Germany's express delivery company Deutsche Post DHL is testing a "Paketkopter" drone that could be used to deliver small, urgently needed goods in hard-to-reach places. Facebook is in talks to buy Titan Aerospace, a maker of solar-powered drone-like satellites, to step up its efforts to provide Internet access to remote parts of the world.

There is also a strong business case for urban drones. "If you look at the economic footprint and CO2 emissions," Raptopoulous said, the drone "beats the truck hands down."

Worldwide sales of military and civilian drones will reach an estimated $89 billion over the next decade, according to the Teal Group, an aerospace research company in Fairfax, Va. The FAA estimates as many as 7,500 small commercial drones will be in use by 2018, assuming the necessary regulations are in place.

Jim Williams, head of the FAA's drone office, said writing rules for the U.S. is more complex than other nations. The U.S. has far more air traffic than anywhere else and a greater variety of aircraft, from hot air balloons and old-fashioned barnstormers to the most sophisticated airliners and military and business jets. At low altitudes, the concern is a small drone could collide with a helicopter or small plane flown by a recreational pilot.

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