Higher Rock Education - Economics Blog

Friday, July 01, 2016

FAA Drone Regulations Impact on Industry

The FAA recently established new regulations pertaining to the commercial use of drones. The use is generally limited to a maximum elevation of 400 feet. In addition the drone cannot fly over populated areas and must remain within the direct line of site of the pilot. Pilots must be 16 years or older and secure a license. Special uses can be applied for with the FAA. Many critics say the regulations place too many restrictions on where drones can fly, which limits the potential improvements in safety and cost savings.

It is estimated that this technology will generate 100,000 new jobs and add $82 billion to the economy in ten years. Companies would benefit from the lower costs. Some of these savings would be passed to consumers as lower prices. Potential uses are almost limitless. In many cases, jobs can be safer with improved efficiency. The most obvious example is the use of drones by the military to reduce the need for pilots to fly in harm's way. Drones can also be used to deliver packages, inspect high towers, railroad tracks, and bridges, fight forest fires, and survey storm damage. They can be used in search and rescue in rugged terrain, but current regulations limit some of these uses.

Some believe the tone of the FAA's recent announcement is more accommodating. The agency recognizes the enormous potential and is taking a more flexible approach. See Andy Pasztor's article in The Wall Street Journal on June 24, 2016.


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