Drone Technology Takes Wings as Amazon Partners with UK Government

LONDON, UK / ACCESSWIRE / July 27, 2016 / E-commerce giant Amazon.com Inc. (NASDAQ: AMZN) and the UK Civil Aviation Authority (CAA) announced their partnership on July 25, 2016, allowing Amazon to test the use of small drones to make deliveries in UK.

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Amazon’s Prime Air

Amazon’s conceptual program “Prime Air” announced in December 2013, is a futuristic drone technology for improving delivery systems and logistics. This delivery system uses small multirotor unmanned aerial vehicles (drones) weighing around 25 kilograms to deliver individual parcels weighing up to 2 kilograms, to customers within 30 minutes or less. These sophisticated units would be equipped with advanced “sense and avoid” technology which would enable them to operate safely within a 10-mile radius and fly under 400 feet. Development centres for Prime Air has been established by Amazon across multiple international locations including US, UK, Austria and Israel.

Amazon’s plans to test drone technology in US did not fructify in time due to impediments in terms of federal laws, aviation safety and privacy concerns. The US Federal Aviation Administration (FAA) had granted permission to begin the testing of its prototype in the US in March 2015. However, the vehicle cleared for testing had become obsolete by then. The FAA last month came out with the first operational rules for commercial use of drones. Amazon is yet to launch this technology commercially as it is not legally approved by the US government.

Drones take-off in UK

Amazon’s drone development program in UK is headed by Daniel Buchmueller, who is also the co-founder of the company’s Prime Air business. The UK government’s decision to allow Amazon to test its drone delivery system gives a huge fillip to the company’s future plans. A cross section of government officials backed by the UK CAA allows Amazon to explore three key innovations:

Beyond line of sight operations in rural and suburban areas,
Testing sensor performance to make sure the drones can identify and avoid obstacles
Flights where one person operates multiple highly-automated drones.

The actual locations where these tests using drones is being kept a secret by both the government and Amazon.

Amazon’s Vice President of Global Innovation Policy and Communications, Paul Misener said, “The UK is a leader in enabling drone innovation – we’ve been investing in Prime Air research and development here for quite some time. This announcement strengthens our partnership with the UK and brings Amazon closer to our goal of using drones to safely deliver parcels in 30 minutes to customers in the UK and elsewhere around the world. Using small drones for the delivery of parcels will improve customer experience, create new jobs in a rapidly growing industry, and pioneer new sustainable delivery methods to meet future demand. The UK is charting a path forward for drone technology that will benefit consumers, industry and society.”

“We want to enable the innovation that arises from the development of drone technology by safely integrating drones into the overall aviation system,” said Tim Johnson, CAA Policy Director. “These tests by Amazon will help inform our policy and future approach.”

Flight to Future

The consumers will have to wait a bit longer to actually receive delivery of their orders by drones. However, this opportunity will enable Amazon to understand how best the drone technology can be used to overcome the safety and privacy issues within the framework of government rules and regulations. Amazon has plans to commercially use the drone technology for actual deliveries by 2017. Amazon is not the only company to explore the use of drone technology for deliveries, Wal-mart Stores Inc. last month announced use of drones to check warehouse inventories in the US.

Market reaction

Amazon shares declined marginally on July 26, 2016, closing the trading session at $735.59, down by 0.54%. The stock price has gained 19.24% in the last three months. The company’s second quarter earnings would be announced on July 28, 2016, after the closing bell.

Source:

http://www.reuters.com/article/us-amazon-com-aircraft-idUSKBN0N103Z20150410
http://www.wsj.com/articles/PR-CO-20160725-910471
http://www.ft.com/cms/s/0/19972c10-52bf-11e6-befd-2fc0c26b3c60.html#axzz4FXGmjK1D
https://www.amazon.com/b?node=8037720011
http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2188074
http://www.businesscloud.co.uk/news/amazon-gets-green-light-to-test-drones-in-uk
http://www.usnews.com/news/articles/2016-07-26/amazon-to-test-fly-drone-delivery-in-uk
http://www.marketwatch.com/story/what-to-watch-for-in-amazon-earnings-2016-07-25
http://elite.finviz.com/quote.ashx?t=AMZN&ty=c&ta=1&p=d

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