Unmanned Aerial Vehicle Market is Ready to Take Off

One day not long from now, planes without pilots could share the skies with commercial airliners.

Equipped with infrared imaging, these flying robots could patrol the nation's borders for illegal immigrants and fly over storm-ravaged regions looking for survivors. With a digital video camera, they could spot illegal activity on street corners and spy backups and bottlenecks on roads.

One local company, Hunt Valley-based AAI Corp., is poised to benefit from the emerging domestic market for unmanned aerial vehicles, or UAVs.

Aircraft of AAI, a subsidiary of United Industrial Corp., already patrol the skies over Iraq for the Army. But the company is seeing increasing interest among federal and local authorities to deploy them back home.

The Department of Homeland Security has proposed using a fleet of UAVs to patrol the borders withMexico and Canada. The Coast Guard is incorporating UAVs into its new Deepwater System to scout out drug smuggling and terrorist activity in the nation's ports.

And a UAV called SeaScan helps commercial fishermen and environmental authorities monitor schools of fish. Launched from the bow of a boat, it can stay aloft for 15 hours and is retrieved using a long hook.

There are an infinite number of things UAVs could do domestically - even deliver pizza, joked Michael Romanowski, vice president of civil aviation at the Arlington, Va.-based Aerospace Industries Association.

"Take it for what it's worth" about the pizza, he said, "But there's going to come a day when people will say, `Remember when there was someone in the front of that plane?'"

While only a handful of companies manufacture them, UAVs are the fastest growing segment of the aerospace industry, potentially worth $55 billion over the next decade, according to the Teal Group, a Washington-based defense consulting firm.

"It's very tiny but growing, so a lot of companies are thinking, `Aha, we've got to get into this,'" said Teal senior analyst Steve Zaloga, author of the report.

With names like Predator, Global Hawk and even Hunter Killer, the public may find it hard to imagine military drones may one day be monitoring storms or traffic. But if the operations in Iraq or Afghanistan end or are scaled back, the companies that make the drones could adapt them for such domestic missions.

In June, AAI purchased Aerosonde, an Australian firm that already has contracts with the U.S. government to fly its drones in commercial air space. Its small UAVs have flown through tropical storms and collected unprecedented pictures for the National Oceanic and Atmospheric Administration.

Strategic purchase

It was a strategic purchase, with the domestic market in mind, said Steven E. Reid, vice president of unmanned aircraft systems at AAI.

"Why not have an acquisition that's already in the market, as modest as it is right now?" Reid said.

While there still are a number of concerns about UAVs navigating commercial airspace - such as, what happens if one flies off course or crashes, and how will it "see and avoid" other aircraft - the government is getting closer to approving them for regular flights.

Late last month, the Federal Aviation Administration awarded Bethesda-based Lockheed Martin Corp. a one-year contract worth almost $400,000 to map out a five-year plan to introduce the pilot-less aircraft, ranging in size from a 12-ounce hand-launched model to that of a 737.

The FAA has already approved hundreds of single-mission flights of UAVs, mostly for government agencies. This year, the FAA issued two experimental airworthiness certificates for aircraft after they demonstrated they could fly safely within a test area and pose no danger to the public: Altair, an environmental observation drone used by NASA and NOAA and made by San Diego-based General Atomics Aeronautical Systems; and Eagle Eye, which AAI helped Fort Worth, Texas-based Bell Helicopter Textron Inc. build for the Coast Guard.

The flights are coordinated with air traffic controllers and are safe, said Peter Dumont, president of the Alexandria, Va.-based Air Traffic Control Association, a nonprofit that promotes the advancement of aviation and has members that manufacture UAVs. He expects the integration will go smoothly.

"We don't have any concerns because we think the FAA has experience integrating different airframes into commercial air space," from turboprop engines to the supersonic Concorde, Dumont said. "They seem to be doing all they can to do it safely."

Safety concerns

But the union that represents the nation's air traffic controllers has reservations.

"It's a very concerning issue to us, in terms of how it would impact the traffic that's within our control," said Doug Church, spokesman for the Washington-based National Air Traffic Controllers Association. "It's something we need to take a closer look at."

AAI's Reid points out that his company's UAVs are taking off and landing in between military aircraft and cargo planes around the clock from Iraq's Balad airport, without incident.

Using such UAVs at home could have been valuable in the aftermath of Hurricane Katrina, Reid said. Equipped with infrared imaging, the drone would have been able to detect warm bodies through the rooftops and alert rescue teams, saving valuable time. But the Army's 82nd Airborne Division was not allowed to deploy AAI's Shadow, which was frustrating, Reid said.

UAVs have evolved drastically since they were first used during World War I. Back then, they were radio-controlled and had limited range. Today, they can be piloted from thousands of miles away - via satellite - or programmed to fly on their own with GPS. Footage from their digital cameras can be downloaded in real-time to a laptop in a Humvee. Because they involve more than just aircraft, the Defense Department now calls them "unmanned aircraft systems," or UAS.

They also have been armed. In November 2002, the CIA directed a Predator drone to fire a missile at a car in Yemen, killing six al-Qaida members. Both Lockheed and Northrop Grumman Corp., which employs thousands of people in Maryland, are developing unmanned bombers.

AAI introduced its first UAV, Pioneer, in 1985. It was deployed during the first Gulf War and flew during the conflicts in Bosnia and Somalia.

In 1999, AAI won a contract from the Army to develop the Shadow Tactical UAS. The Army has so far ordered 70 and logged 129,000 flight hours.

The company recently installed control stations in Stryker vehicles. Hours after one such installation, a group of soldiers reported back that they were able to see an insurgent plant an improvised explosive device ahead of the vehicle, avoiding a potentially deadly incident.

"For it to be happening a half-mile down the road, and you're watching it - well, that's pretty neat," Reid said.

Late last month, the company won a contract to develop a ground control station dubbed the "One System" that allows the Army to control various unmanned aircraft from a single video console, regardless of whether the drone was built by AAI or a competitor. The system would be useful to air traffic controllers trying to track multiple drones here, Reid said.

`Flying trashcans'

Michael Lewis, an analyst with BB&T Capital Markets who covers AAI Corp. and whose firm does or expects to do business with AAI, said there is near-term demand from law enforcement for "flying trashcans" - small vehicles that fly from building to building, conducting surveillance from the rooftops.

AAI recently built a similar Micro Air Vehicle, or MAV, for Honeywell for a potential contract with the Army. With a fan-like engine at its base, it takes off vertically and can "hover and stare" for 40 minutes at a time.

Still, he said, the domestic market is still several years out, and he doesn't yet factor it into his evaluation of UAV companies.

"It's great to talk about, but I think there's a lot of work to be done," Lewis said.\

News stories provided by third parties are not edited by "Site Publication" staff. For suggestions and comments, please click the Contact link at the bottom of this page.