Sonal
2
All posts from Sonal
Sonal in Smart Investing & Retirement Plans,

FAA allows Amazon to test drones in U.S

The Federal Aviation Administration seems to be softening its stance on commercial drone operations, at least for one company.

The government agency on Thursday granted Amazon (NASDAQ:AMZL) permission to test and experiment with certain drones in its fleet "for research and development and crew training."The company first launched plans for a drone delivery program more than a year ago, but current FAA rules are so restrictive that only hobbyists and certain small businesses can use drones in meaningful ways. Realtors for example, can take aerial shots of their properties.

Delivering packages through the air in 30 minutes -- what Amazon wants to do --is still far from possible given current rules that drones must remain in the line of sight of operators, and can only fly up to 100 mph.

But Thursday's announcement is "huge news for Amazon," according to BI Intelligence research analyst Cooper Smith. "It seems like the FAA is giving Amazon a runway to at least test in the U.S."

Previously, Amazon could only test its drones delivery program, Amazon Prime Air, in countries like India.

Amazon isn't the only company building a drone delivery program. Google is also developing one and has faced the similar restrictions.

When the FAA released its initial proposal for drones regulation in the US last month, Amazon was very vocal about its disappointment.

Paul Misener, Amazon's vice president for global public policy, said at that time that "the FAA's proposed rules for small (drones) could take one or two years to be adopted and, based on the proposal, even then those rules wouldn't allow Prime Air to operate in the United States."

Another problem for Amazon is that under current rules, the drones must also avoid people. Also the operator must not allow "any object to be dropped" from the drone.

That would seem to preclude Amazon drones from flying into cities and leaving small packages on customers' doorsteps.

Among the concerns of regulators is no doubt what Amazon CEO Jeff Bezos said in announcing the plan: "This thing can't land on somebody's head while they're walking around their neighborhood."

An FAA spokeswoman said the agency did not have any additional comment. Amazon did not immediately respond to requests for comment.

Under the terms of the experimental permit, Amazon must abide by specific operation rules: Drones can only be flown at 400 feet or below during the day in clear weather conditions, and must remain in the line-of-sight of their operators, who must hold at least a private pilot's certificate and medical certification.

Additionally, Amazon is required to send monthly data from its tests to the FAA. That information includes how many times test flights were conducted, who operated the drones, and any communication or hardware malfunctions.

Currently Amazon (NASDAQ:AMZL) is trading at 370.24 with -0.51% change.