Nation’s Biggest Unmanned Systems Conference Kicks Off Amid Changing Market

ORLANDO — For those who keep tabs on the drone industry, it should be no surprise why the Association for Unmanned Vehicles Systems International chose to move its annual unmanned systems conference and trade show out of the Pentagon's shadow in Washington, D.C., and into commercial hubs such as Orlando, Atlanta and New Orleans. 

Unmanned aerial systems manufacturers are at a crossroads. Industry is eager to sell the aircraft and associated services both globally and to the civil sector, but experts predict UAS integration into the national airspace is still years away. And just as companies are facing more competition worldwide, U.S. military procurement is dropping off. 

"Largely most of the unmanned systems improvements and innovations have come through the military sector, but that's changing," John Lademan, AUVSI’s chairman of the board, said in the opening ceremony May 13. "New markets are opening up in agriculture, automated vehicles, oil and gas and ... new sectors." In the realm of agriculture alone, AUVSI projects that there will be more than $13 billion of new economic activity as a result of unmanned systems.

Because the U.S. military has already bought enough drones to fill out its fleet and meet its requirements, there could be a reduction in procurement, said Larry Dickerson, Forecast International’s unmanned vehicles analyst. The Defense Department has only begun to consider what it will need in its next fleet of UAS, including the ability to engage in combat environments where adversaries have anti-aircraft capabilities. 

Unmanned aerial system production will stagnate during the next decade, but manufacturers will be bolstered by the higher price of new drones, Dickerson said in his 2014 report on the industry. He predicts that roughly 1,000 UAS will be produced worldwide in both 2014 and 2015, and production will average 960 units from 2016 to 2023. Civil sales, which he defines as non-government purchases, will only be a small part of that — about $100 million over the next 10 years, he said.

“It’s not good news” for U.S. manufacturers, he told National Defense. “But there are slow downs in every market. Markets are cyclical.” 

The shift from Defense Department customers to a civilian market is evident in the conference’s list of keynote speakers, which includes only one military representative: Lt. Gen. Kevin Mangum, the deputy commanding general of the Army’s Training and Doctrine Command. Others include Alaska Lt. Gov. Mead Treadwell, business executives and members of Congress. 

The rebranding of the conference even trickled down to the WiFi passwords distributed to exhibitors, attendees and journalists covering the event. Last year, the conference’s WiFi password garnered media attention for imploring attendees to “DONTSAYDRONES.” This year, the message is different. Drones are “savingtimemoneylives.” 

While U.S. military sales may be waning, UAS companies made a robust showing at this year’s conference, which will host more than 600 exhibitors and 8,000 attendees, according to AUVSI.

Part of the reason the conference moved from August to May was to improve international participation and boost overall attendance, Lademan said.

The Federal Aviation Administration is unlikely to make its 2015 deadline to start integrating drones in civil airspace, but that might not be such a bad thing, Dickerson said. “Why are you in such a hurry? Everyone thinks is going to be golden, with UAVs flying in all these states, providing a lot of jobs” but there is still much work that needs to be done in establishing how unmanned systems can safely share airspace with manned aircraft and each other.

Industry executives obviously think differently. During a May 13 panel, they hammered Jim Williams, the FAA’s manager of the UAS integration office, with questions about when unmanned aircraft would finally be able to fly in the NAS.

"In Australia our aviation authority legalized commercial drone activities in 2002,” said Matt Sweeny, co-founder of Flirtey, an Australian start-up that will use UAS to deliver packages. "Do you think the United States is at risk of losing this industry to companies with more forward thinking regulatory environments?” he asked, as the crowd broke into applause.

Williams said: "Commercial aircraft operations for unmanned aircraft could be happening today if a manufacturer were to get their aircraft certified and come up with a means of operation over populated areas. There are companies who are in discussions with the FAA to do just that."

The FAA’s airworthiness certification rules were created for manned aircraft, but ultimately it’s a matter of a company coming to the administration with a plan for safe operations, he said. "It's a two way street. The FAA can't pull the industry up. … We’re actually working with multiple companies now to get to that point where there are certificated aircraft that can operate.” 

UAS manufacturers are not the only ones concerned about the current state of affairs. A February 2014 study by the Center for Strategic and International Studies contended that the United States is at risk of losing its edge in the field of unmanned systems. 

In the next decade, China’s AVIC will become the world’s top-selling manufacturer, Dickerson said. However, Chinese UAS are unproven and will unlikely match the capabilities of the largest, most sophisticated U.S. drones such as the Reaper or Global Hawk.  

Chinese drones will be less expensive, making them palatable to less wealthy nation-states or to nefarious countries with whom the United States refuses to deal arms to, he said. Chinese UAVs don’t “have that combat-tested seal of approval,” that U.S. unmanned systems do, but U.S. companies may see their technological lead against China narrowing over time.

Follow National Defense Magazine's blog throughout the week for continued AUVSI coverage.

Topics: Business Trends, Defense Department, DOD Budget, Robotics, Unmanned Air Vehicles, Unmanned Ground Vehicles