The FAA has released their annual aerospace forecast – and the drone industry figures are both impressive and surprising. We’ll dive into different areas of the forecasts in future articles: in this one, we’re looking at the numbers. DRONELIFE has reported on FAA Aerospace Forecasts since 2016: and a look back gives us perspective on how predictions change and how they do – or don’t – reflect reality.
What They Thought Would Happen
The annual forecast makes predictions of growth and fleet size: this year the forecast covers 2019 – 2039, but predictions tend to narrow to a 5 year period. Unmanned aircraft have now been included in the forecast for several years, and a look back at some of the previous predictions provides an interesting backdrop to this year’s data.
The FAA has clearly honed its methodology and used their experience in the sector to develop more precise forecasts. The 2016 forecast predicted massive growth: but as we reported in 2017, the following year’s forecast got more realistic:
The FAA’s numbers last year showed predictions of commercial drone sales rising to 2.7 million units by 2020. By comparison, this year’s baseline forecast is for a fleet of .327 million units by 2020. The more than 2 million unit drop, explains FAA Deputy Division Manager Michael Lukacs, is partly due to a change in model. While last year’s numbers represented unit sales, this year’s numbers predict a data point more important to regulators: the number of drones actually in operation. It’s a subtle difference, but a significant one. Drone tech is changing so rapidly that operators frequently upgrade equipment, so sales are not necessarily equivalent to fleet numbers.
Last year, the FAA predicted solid growth for the commercial drone industry but still struggled to get a handle on the commercial sector.
About the commercial “non-model” space, FAA says: “It is very dynamic and appears to be at an early stage of growth. Unlike the model sector, we anticipate that the growth rate in this sector will continue to accelerate over the next few years.” In actual fleet estimates, the FAA uses a base number but acknowledges that as new applications open, the rate could go much higher.
At the time of last year’s forecast, the FAA predicted growth of 40% in the commercial drone sector.
What Actually Happened
For those who have been paying attention, growth in the sector is no surprise. What is surprising, however, is the pace of growth and the significant differences between the recreational and commercial UAS sectors.
The recreational drone industry in the US is slowing down. With 900,000 registered recreational pilots and an estimated fleet of about 1.25 million in the U.S., recreational flyers make up a significant community. It’s a sector, however, that the FAA predicts will “saturate” soon:
However, like in all other technologies includ- ing hobby items, (e.g., cell phones and video game consoles; and prior to that, video cam- eras, and video players), the trend in model aircraft is likely to slow as the pace of falling prices diminishes and the early adopters begin to experience limits in their experiments or simply eagerness plateaus.. Given the trend in registration and market de- velopments, we forecast that the model air- craft market will saturate at around 1.4 million units.
The commercial drone industry outpaced predictions by 80%. The FAA predicted a healthy growth rate of more than 40% – but they underestimated the industry:
Last year, we forecasted that the non-model sector would have around 229,400 sUAS in 2019, a growth rate exceeding 44 percent from the year before (2018). Actual data far exceeds that trend with over 277,000 aircraft already registered by the end of 2018. Our forecast of non-model sUAS last year thus fell short by almost 80 percent for 2018 (or 277,000 actual aircraft vs 158,900 that we projected last year). The significant growth in this sector over the past year demonstrates the uncertainty and potential of the market.
Remote pilot certifications also exceeded forecasts, but not as sharply. By the end of 2018, there were more than 116,000 remote pilot (Part 107) certifications issued, which exceeded the FAA’s prediction of 106,000. (The good news – over 90% of those taking the test passed it.)
What Happens Next?
This year’s predictions about the drone industry reflect the experience gained from another year of data and regulations – but take into account the naturally fluid nature of a new sector. In any case, the FAA Aerospace Forecast is optimistic for the commercial drone industry.
Hardware continues to grow, with larger “professional” grade aircraft becoming more common as delivery and other applications develop. The FAA differentiates between “consumer” grade commercial drones – average unit price about $2500 – and “professional” grade commercial drones, which have an average unit price of $25,000. While professional grade drones make up about 95% of the market now, FAA sees that percentage moving to only 85% in 5 years as professional grade drones – and their applications – become more common. In fact, should drone delivery move forward to scale, the FAA says that the growth in professional grade drones could be “phenomenal.”
The uses for commercial drones continue to expand. An FAA survey provides the following data about current drone missions:
“As the sector grows,” says the FAA, “we anticipate there will be many more uses of non-model sUAS as they are increasingly evident from the participants’ activities, for example, under the Integration Pilot Program (IPP).”
There will be enough demand to support the growth in remote pilots. Despite rapid industry growth, it has been hard for some remote pilots to find the industrial clients that can support a business. The FAA says that growth trends indicate that demand is rising.
…RPs are set to experience tremendous growth following the growth trends of the non-model sUAS sector. Starting from the base of 116,027 RPs in 2018, non-model activities may require almost 350,000 RPs in 5 years, a three-fold increase, providing tre- mendous opportunities for growth in employ- ment associated with commercial activities of UAS. Potential for RPs may enhance even more if larger UAS are used in commercial activities and urban air mobility becomes a reality in the near future.