Evolving EO/IR Commercial UAS Landscape: User Needs and Defense Trends

For TTC’s Next-Generation ISR Symposium for Military and Government

Arlington, VA. December 15-16, 2016

Ron Stearns,

Director, Business Development, Robotics and Unmanned Systems

DoD Aircraft Acquisition through the FYDP

Aircraft by Service Branch, 2015-2021 Fixed and Rotary Wing, 2015-2021 Aircraft by Category, 2015-2021

Source: Velocity Group analysis of DoD FY 2017 budget documents

With the inclusion of zero-hour rotary-wing programs (e.g. AH-64E, AH-1W to AH-1Z) and target drones (BQM-167, QF-16) there will be 3,037 DoD aircraft deliveries from FY 2015-2021. Rotary-wing aircraft are the major FYDP acquisition driver, owed in large part to operations tempo and airlift demand in United States Central Command

U.S. Air Force, Aircraft Acquisition 2015-2021

Source: Velocity Group analysis of DoD FY2017 budget documents

U.S. Army, Aircraft Acquisition 2015-2021

Source: Velocity Group analysis of DoD FY2017 budget documents

DoN, Aircraft Acquisition 2015-2021

Source: Velocity Group analysis of DoD FY2017 budget documents

DoD: Aircraft with a Baseline EO/IR Turreted Sensor

OH-58D: 368

AN/AAQ-11, LMT

MX-15,MX-20L-3/Wescam

MTS Family Raytheon

4,739 Aircraft as of calendar 2014

POP 300,IAI

Alticam AC-10,Hoodtech

Unmanned Aerial Systems: Commercial Proving Grounds, Airspace Access and Safety-Case Development

Transitions, Time Compression, Part 107

May, 2014: FAA accepts petitions for

commercial UAS exemption under

Section 333 of FAA Modernization and Reform Act of 2012

First six Section 333 exemptions are issued on Sept. 25, 2014 to six

television and film companies.

5,309 Section 333s approved as of June

8,2016).

Blanket exemptions for test sites and 333 in

increasing effect. AGL from 400-800 feet

Moves toward Risk-based certification.

Night operations under Section 333.

Expedited, online commercial

registration. Part 107 released June 21, 2016

From inertia to normalized access in two years

From thousands of commercial

UAVs to potentially millions –

how can systems scale to

accommodate?

• Regulatory

• Production

• Certified equipage

• Information flow

• Command and control

• Operator certifications

• Commercial service providers

• Human-machine interface

• Airworthiness

FAA Part 107: Early Takeaways

BVLOS will usher in viable commercial Group 3 UAS

“Progress in science is not linear, but rather exhibits periods of peaceful interludes punctuated by intellectually violent revolutions.”

-Thomas Kuhn

(paraphrased from “The Structure of Scientific Revolutions”, 1962).

Gold Rush, but who are the early winners?

Imagery, data and business analytics driving CONOPS and revenues

Commercial UAV size, weight and reliability must evolve

Small businesses,Hyper localized> $1mm inrevenues

Greater: altitude, controller radius, operations over people

Increasing: mapping use, data reselling, applicability

Section 333 and Part 107 are building the safety case

Risk Classes and Commercial Best Fit

• VTOL UAV capabilities in the

40-80 lb. range are surpassed

every 18-24 months.

• Service providers are

purchasing UAVs in twos to

avoid fleet obsolescence

• UAVs less than 40 lbs. will

increasingly become a

commoditized design space

• Sensors have not met UAVs on

an equal field – Form Factors,

SWaP and costs slowly

coming into agreement

• Commercial-grade UAV

production is not yet ready to

scale manufacturing

Risk Class Aircraft Weight Example Aircraft NAS Access

RC -6 15,000 lbs. and up 2020+

RC-5 5,000-15,000 lbs. 2020+

RC-4 1,500-5,000 lbs. 2020+

RC-3 55-1,500 lbs.2019-2020

Exemptions

RC-2 6-55 lbs. Part 107

RC-1 1-6 lbs. Part 107

Commercial UAS Ecosystem Snapshot

Analyzed 647 organizations with active pursuit and/or participation in UAS markets and assigned to categories based upon stated core competency

Data Processing: video, imagery and analysis

RF/Comms: wireless, nav., detection, antennas, satcomms

EO/IR: manufacture of all modalities

Services: insurance, training, measurement, legal, field support, engineering, test, consultants

Embedded Products: GPS, PCB, computers, data storage

Electronics: MEMS, cabling, circuits, solar, avionics, IMU, switches, converters, connectors, motion control

Components: bearings, power, batteries, fasteners, servos, hydraulics, tooling, chutes, cases, ground support

Market Gap – Commercial Opportunity

Canon DSLR = 3-4 lbs. $2000 for body, lens, gantry assembly

Humidity, salinity, particulates are no-fly deal breakers

Current small camera mounting, approx. $1300

Weight wreaks havoc on small UAS capabilities. A 5-gram weight can equal 15-minutes of flight time on a 40-lb, fixed-wing UAV with 20-hour endurancePerformance penalties are worsefor VTOL UAVs. With maximum endurance of roughly 30 minutes

Desired Commercial EO/IR Sensor Properties:

1. ITAR Free – completely commercially-available, worldwide

2. Dynamically Stabilized3. Environmentally robust: day-night and

weather-tolerant (to be determined)4. Independently powered, discreet – not tied

to or pulling from UAV power5. Less than 1.5 lbs. for entire on-board

system6. Much lower power draw7. Store onboard or stream imagery8. Modular, hot-swappable payload(s)9. 3-4” diameter gimbal10. Price Point closer to $4,000 per unit.

Current Systems and Costs

DJI Inspire T600 with thermal imager $12,000

The Xenmuse (DJI) thermal camera (FLIR) retails as a standalone for $6,900

FLIRview Pro SUAS starts at $2,000 Size: 2.48" × 1.75" x 1.75“ Weight: 3.25-4 oz

AeroVironment’s i23 gimbal on DoD’s RQ-11B Raven starts at $30,000

CloudCap (UTC Aerospace Systems) TASE 150Aftermarket for $80001.98 lbs – 4.5” diameterITAR Restricted

M1-D PTZ UAV Infrared CameraList price: $9,9954.5” diameter> 2 lbs.

UAV Cost Assumptions - Total Market

• Cost assumptions for commercially-dedicated Risk Class 2-4 UAVs are derived from representative list pricing

• Price erosion will come in the Risk Class-2 VTOL market, where barriers to design and manufacture are low, and new technologies are spiraled about every 24 months

Risk Class 2 –Representative 12-bladed VTOL intended for industrial imaging. $50,000 and up

20-lb. payload

10 minutes flight time

Risk Class 3 – Yamaha’s

R-Max purely commercial imaging derivative

200 lb. MTOW

$170,000/copy

Risk Class 4 – Aurora Flight Sciences Centaur OPV

Based on DA-42 GA Aircraft - $600,000 new, add $250,000 for OPV conversion. 3,945 lb. MTOW

These represent the best commercial price/performance/cost ratios

Imagery and Data Capture, Process & Delivery: Developing Drone Layer

Electrical Government Oil & Gas AgricultureForestry

VAR VAR VAR VAR

Woolpert, OH Sewall, ME Merrick, CO Terra RS, WA

Aerial Imagery

Aerial Imagery

Aerial Imagery

Aerial Imagery

Drone Imagery Drone Imagery Drone Imagery Drone Imagery

Wholly-owned fleets, light twins, single heavies, exquisite sensors

Will providers choose to own or lease drone fleets as projects dictate? Ownership introduces elements of variable costs and unpredictability

Specialized value-added resellers incorporate and layer metadata over imagery

Established imagery and information users comprise a roughly $4 billion annual U.S. data market

9x9” imager in C182 Aeryon’s Sky Ranger

Commercial Drones can flatten this information flow, with lower investment and technical barriers to aircraft ownership and data capture, but not processing and delivery. Mapping and surveying will remain specialized skill sets.

Commercial Markets: Data Needs

Aggregate needs, determine asset utilization, preposition assets for rapid response

Major Electrical Transmission Infrastructure

Corridors stretch for up to 800 miles. There are programmed collections for vegetation encroachment, subsidence and clearances. In some cases these datasets must be collected twice annually.

There are emergency needs during brownouts or weather-related damage to the distribution infrastructure. An ISO can lose millions in days if it cannot locate and repair. The added costs come from having to purchase power from outside networks.

Even with a crewed Helicopter and an observer dedicated and on call 24/7 there’s no guarantee they’ll be able to fly. A UAV could do the dangerous work in remote areas to isolate unexpected outages, damage and/or hot spots.

Oil and Gas: Major Transmission Infrastructure Density

Map of major natural gas and oil pipelines in the U.S.

Hazardous liquid lines are in red, gas transmission lines in blue

Concentration in Texas, Oklahoma and Gulf states will help to define UAS CONOPS as well as industry and political partnerships

This represents a sophisticated, moneyed end-user set. UAS Requirements are understood and waiting for expanded BLoS airspace access

Source: Pipeline and Hazardous Materials Safety Administration

Commercial UAS Value Proposition

Fixed fleet operating costs, data

driven maintenance and upgrades

Improving existing designs for

performance, SWaP, and human factors

Take new concepts from design to

manufacture under one roof

Keep fleet updated with

latest technology

Let you focus on selling

your service or platform

The Velocity Group is at the leading edge of onshore product development and rapid time-to-market. We are assembling a world-class portfolio of design and manufacturing organizations that put customer focus at the heart of everything we do.

Our mission:

We help our clients accelerate time from idea to profit by providing single-source accountability for and management of the entire range of resources needed to bring concepts to profitable, market-ready products, to scale up for manufacturing and to produce and sustain them efficiently and cost-effectively.

www.velocityfast.com info@velocityfast.com ron.stearns@velocityfast.com

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