This week the world’s first revenue-generating drone airline, yes that’s a thing now, was launched by UPS and approved by the US Federal Aviation Administration through an industry-first Part 135 Standard certification, UPS reported.

Last Friday, UPS subsidiary, UPS Flight Forward Inc., launched the first drone delivery flight by any company under Part 135 Standard at WakeMed’s hospital campus in Raleigh, N.C.

That flight, using a Matternet M2 quadcopter, was flown under a government exemption allowing for a “beyond visual line of sight” (BVLOS) operation, also a first in the US market for regular revenue-generating delivery.

UPS estimates the US drone medical delivery segment to be worth an estimated $3-5bn, according to a September 2019 CNBC online news report.

Matternet-backers include lead investors Sony Innovation Fund and Levitate Capital. The international medical drone delivery specialist has raised $25.5m over three funding rounds, according to Crunchbase.

The company has partnered with Mercedes on autonomous vans and stock delivery services.

This first-ever revenue-generating service demonstrated the business case for drone delivery of medical products and specimens, said UPS. Collaboratively, Matternet and UPS, have made an estimated 1,000 drone deliveries to the WakeMed campus.

UPS CEO, David Abney, told CNBC, that the drone airline will focus initially on “campus” environments until the delivery company can build up-scale through on-the-ground infrastructure and more regulations are put in place for other delivery segments, including residential.

UPS CEO David Abney on upcoming drone deliveries

David Abney, CEO of UPS, joins “Squawk Alley” to discuss new FAA approval for delivery drones the company plans to implement.

Drone airline to build on-the-ground infrastructure for drone fleet. But campus environment endpoints will be the initial target before it launches into residential drone delivery.

CNBC questioned the related costs to what appears a premium service, due to a drone’s quick delivery capabilities. Abney did not provide any costings as examples but did reiterate that economies of scale will go hand-in-hand as the drone point-to-point infrastructure is built up.

Both companies have plans to expand drone delivery network serving healthcare and yet to be reported “other customer applications”.

“This is a big step forward in safely integrating unmanned aircraft systems into our airspace, expanding access to healthcare in North Carolina and building on the success of the national UAS Integration Pilot Program to maintain American leadership in unmanned aviation,” said US Secretary of Transportation Elaine L. Chao.     

According to an report, Alphabet, Amazon, and Uber are all working on drone delivery, with competition from existing delivery firms such as FedEx and UPS making major strides.

What does the certificate mean for business?

  • UPS Flight Forward’s certificate permits the company to fly an unlimited number of drones with an unlimited number of remote operators in command. This enables UPS to scale its operations to meet customer demand. Part 135 Standard also permits the drone and cargo to exceed 55 pounds and fly at night, previous restrictions governing earlier UPS flights.
  • Expand UPS Flight Forward delivery service to new hospitals and medical campuses around the country.
  • Rapid build-out of ground-based, detect-and-avoid (DAA) technologies to verify drone safety, while enabling future service expansion.
  • Construction of a centralised operations control centre.
  • Regular and frequent drone flights beyond the operator’s visual line of sight.
  • Partnerships with additional drone manufacturers to build new drones with varying cargo capacities.
  • Adding new services outside of the healthcare industry, including the transport of special commodities and other regulated goods.

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