Drones: light turbulence ahead

Date published




In the not so distant past, the word drone was synonymous with covert military actions where the risk of manned aircraft use was simply too great. Drones, or Unmanned Aircraft Systems (UAS) as defined by the US Federal Aviation Administration (FAA), however, have experienced exponential growth in the past four years, both for recreational and commercial purpose.

While precise numbers are not available due to the unregulated nature of the drone industry, a recent respected US study suggests that in 2014, US$720 million was spent on drones worldwide. That same study suggests that by 2020 an estimated US$4.5 billion will be spent on drones globally.

Increased usage

In addition to the explosive worldwide recreational use of drones, the commercial applications have also expanded with drones now taking an active role in insurance claim adjustment, damage assessment in precarious situations, parcel delivery, agriculture, real estate sales and filming as well as the soon to be introduced self-flying taxis in Dubai (the Ehang 184 drone designed to carry a single passenger and their bag for journeys of up to 23 minutes across the city from July 2017), to mention just a few.

With this rapid growth comes the need not only for regulation for safe operation and flight, but also to protect the public from the dangers that crowded skies will create, including the necessity to consider the potential implications of deliberate criminal and terrorist use.

Global regulation

The problem confronting global regulation is, however, bringing various global regulatory agencies together to establish a uniform global safety protocol. The FAA in the US, the European Aviation Safety Agency (EASA) and the National Civil Aviation Agency (ANAC) in Brazil are taking the regulatory lead.

The FAA, in conjunction with the US Department of Transportation, has issued proposed regulations for UAS weighing under 55lbs / 25kgs conducting non-recreational operations by seeking to restrict their use to daylight and visual line of sight operations only.

The FAA proposal also includes:

  • Height restrictions, operator certifications, operational limits and aircraft registration and markings.

Additional suggestions include:

  • Speed restrictions, prohibition of flight over crowded public venues and preclusion of operation in commercial aircraft flight paths and restricted airspace.

36 of the 50 United States have already enacted laws addressing drone use with an additional four states adopting restriction resolutions.

The EASA has a more complex regulatory framework which closely resembles the key components of the FAA regulations while including specific restrictions imposed by France, Denmark, Germany and the UK. The UK in particular prohibits:

  • Flight near prisons, nuclear power stations, military complexes and power plants.
  • Camera equipped drones from flying within 50 meters of a very congested area (although the term very congested area remains undefined).

ANAC, which has taken the regulatory lead in Latin America, references drones as Remotely Piloted Aircraft Systems (RPAS). ANAC has established three classes of drones defined by weight (Class 1 – 150kg and above; Class 2 - 150kg to 25kg; and Class 3 - 25kg or less) and three types of operation (BVLOS – Beyond Visual Line of Sight; VLOS – Visual Line of Sight; and EVLOS – Extended Visual Line of Sight). The ANAC regulations mirror the FAA proposed regulations, but also go further by:

  • Imposing mandatory third party liability insurance for commercial drones exceeding 250 grams in weight (excluding government drones).
  • Taking the lead in imposing cargo restrictions for drones by prohibiting the transport of people, animals and dangerous cargo (with an exception for agricultural fumigants in commercial use).


While there is noticeable symmetry between the FAA, EASA and ANAC regulations, the exponential growth of drones, both recreationally and commercially, means that uniform global safe flight and operational guidelines, like those regulating larger commercial aircraft, will need to be enacted.

Further, while the current flight range for drones remains limited, the danger lies in the rapid growth of development, deployment and use, coupled with the ensuing security risks. The potential for criminal use must be considered and insurers and businesses need to urgently address the liability issues surrounding the inevitable crashes, failures and potential attacks and security breaches that will present a risk to the general public.

Read other items in the London Market Brief - June 2017