Episode 11 – Jan 6, 2022 – CES Highlights, A new Pro Drone Contender, and Flight Reviews Indoors?

Episode 11 – Jan 6, 2022 – CES Highlights, A new Pro Drone Contender, and Flight Reviews Indoors?

January 6, 2022 – Weekly News, Highlights from CES 2022, Top Questions, and upcoming content preview.

WEEKLY NEWS LINKS

CES 2022 HIGHLIGHTS

THIS WEEK’S TOP QUESTIONS

  • Basic and then Advanced?
  • Flight Reviews Indoors

UPCOMING WQA Episode Preview

Discussion on Recency!

Episode 11 – Jan 6, 2022 – CES Highlights, A new Pro Drone Contender, and Flight Reviews Indoors?

2: Episode 10 – What it takes to start up a drone program.

There are countless examples of efficiencies that can be realized when a company decides to run their own drone program. In many cases, the demand for flying is just so specific or frequent, that it only makes sense for a company to do it themselves. Having said that, no matter what the size or complexity of your drone operation, there are certain considerations that every operator should be aware of. In this episode, we’ll discuss how to decide if an internal company drone program makes sense, or if that is something that would be better outsourced to a third party.

Host: Ian Wills, Mark Watkins

Check out more in the blog article: WHAT DOES IT TAKE TO START A DRONE PROGRAM?

Drone Program Startup – A Cost Benefit Analysis

Drone Program Startup – A Cost Benefit Analysis

What DOES it Take to START A Drone Program?

By Mark Watkins, November 10, 2021

The Cost / Benefit Analysis

There are countless examples of efficiencies that can be realized when a company decides to run their own drone program. In many cases, the demand for flying is just so specific or frequent, that it only makes sense for a company to do it themselves. Having said that, no matter what the size or complexity of your drone operation, there are certain considerations that every operator should be aware of. In this article, we’ll show you how to decide if an internal company drone program makes sense, or if that is something that would be better outsourced to a third party.

“To build an in-house drone program, we estimate that your initial costs will be between $32,600 to $75,100 for your first drone. Each additional drone will have an initial cost of $12,600 to $55,100.”

Drone Program Cost Factors

To make an informed decision, we’ll start by pricing out the costs that should be considered when planning and building an internal drone program. There are 6 major categories that we’ll consider: 

  1. Training
  2. Insurance
  3. Compliance
  4. Equipment
  5. Pilots 
  6. Administration

It’s important to note that the prices that we have used for each component of a drone program may vary compared to what your actual costs would be. Tinker with our data to tailor the results to more accurately reflect your actual costs.

Training

In Canada, whenever you are flying a drone weighing between 250 grams and 25 kg you are required to have either a Basic or Advanced Drone Pilot Certificate. For those thinking of starting their own corporate drone program, the Advanced Drone Pilot Certificate is likely what you will want for a few reasons. First, if your employees are flying around thousands of dollars’ worth of equipment above millions of dollars’ worth of assets, then you probably want a higher level of training. Second, the odds are very good that your insurance company will probably also share this line of thinking with you. Finally, if you are flying your drone near an airport, then your decision may already be made since you cannot fly a drone without an Advanced certificate within about 5.6 km of an airport or 1.8 km of a heliport.

Using our training costs as a sample, you can expect to pay $600 per employee to get their Advanced Drone Pilot Certificate. For renewals, we offer a course that is $50 and this must be done every 2 years after gaining your initial certification. Our Advanced training is approximately 20 hours of coursework, plus a few additional hours of studying for the exam, and then the time required to complete the in-person flight review, usually a couple hours including site travel.  Additionally, if your work involves operating around uncontrolled aerodromes, it might be prudent to consider getting your ROC-A radio certification, which typically costs around $50 for the online exam.

Insurance

There are a number of factors to consider when looking at insurance for your drone program. The three most relevant types of insurance are; Aviation Liability; Commercial General Liability and Errors and Omissions and they cover you for different aspects of your operation.

Insurance types:

  • Aviation Liability: used to protect against property and personal damages resulting from operating the drone. Hull insurance may be included as part of the Aviation policy and that protects the drone in the event of damage.
  • Commercial General Liability: used to protect against bodily or personal injuries that may have resulted from negligence. Additionally, this insurance can protect against damages from slander or false advertising.
  • Errors and Omissions: used to protect against damages resulting from data that was provided while using the drone. Essentially, if costly business decisions are made from inaccurate drone data, then this insurance can cover financial losses that resulted from those decisions.

Having a compliance program may get you a slight reduction on your policy, but more importantly, without it you may not be eligible for Errors and Omissions (E&O) and Commercial Liability Insurance. A compliance program can make you a more desirable candidate for E&O and Commercial Liability insurance.

Insurance costs depend on a number of factors, including which types of insurance you decide to use, annual revenue of your company, experience, safety and many others. Depending on what insurance you decide on, you could expect to pay between $1,000 to $6,000 annually to insure a single drone for your business. Keep in mind that our numbers may not match what you are able to find, so please do your own research!

Compliance

Compliance is all about how you are meeting or exceeding the regulatory requirements. A great way to demonstrate your adherence to the rules is to have a document that states how your company intends to comply with the regulations and to have a way to verify that you are meeting the standards you have set in your document. Finally, you should also have a way within your compliance system to follow-up on failures of the system to try to address the root cause of an issue.

 

If you ever end up having an incident or an accident, then you will be required to produce records surrounding the flight. By developing and implementing an internal company compliance system, you can help your company stay compliant with the regulations. A good compliance system has many components, and we can help you develop a Company Operations Manual, Standard Operating Procedures and a robust auditing system. Contact us for more information about these services.

 

On the topic of pricing, to develop internal documentation would likely require several months of time if it were tasked to an internal staff person. For a company with limited aviation experience to develop their own compliance documentation, I’d expect they’d spend $20,00 to $30,000 on wages on months of work to develop a product that would be potentially inferior to what a competent drone consulting company could produce.

Equipment

The cost to purchase your own drone gear could vary a great deal, depending on your requirements. Some factors to consider when you are deciding on a drone are:

 

  1. What equipment or sensors do you need on your drone?
  2. Is your drone capable of flying in the weather conditions where you will be operating it?
  3. Costs

 

Drones can be used for a wide range of tasks. For example, you can detect water damage using thermal sensors, map large areas with high precision using RGB and LiDAR and you can detect the health of farm crops using multi-spectral imaging. The cost of a camera is reflected in its capabilities and the price of the drone will vary largely based on what type of camera is (or can be) mounted to the drone. 

Remember to check what weather limitations apply to your drone before you make your purchase. If your drone is limited to operating at 0°C or above, but your intended drone site spends half the year below freezing, this would be an issue for a year round operation. Remember to check the temperature and moisture limitations that apply to your drone!

 

Finally, pricing for drones that would be useful in various contexts can vary in price from $3000 to well over $30,000. When pricing drones, it would be wise to have some portion of money set aside for fleet renewal. Perhaps something like 33% of the cost of the new equipment set aside per year so that you can have a renewal program to keep your equipment up to date and in good working order. This fund can also help with repairs or replacements for damaged or unusable equipment.

Pilots

To maintain an internal corporate drone program, you will also need to have drone pilots. Some companies will decide to combine pilot roles with other company duties and others will make those roles separate. A quick search on Workopolis shows a broad range of salaries for drone pilots in Canada. The salaries tend to vary depending on the industry, but out of about 20 advertised jobs, the salaries range from $40,000 to $110,000. Obviously this cost would need to be factored into the equation also.

Administration

With any good drone program, there is a fair bit of administrative work to keep things up and running. You will need to keep track of:

  • Pilot certificates
  • Pilot rest
  • Insurance
  • Permissions
  • Mission planning documentation
  • Maintenance
  • Incidents or accidents
  • Safety documentation

If your company has created its own drone program, then the odds are that they have enough flying to justify the expense. This amount of flying will generate a fair amount of paperwork. Managing and tracking this can justify a new administrative position. Based on our numbers, for every 10 drone pilots employed by a company, typically there is one administrative person on payroll. Keep in mind that your operation may vary from this average, but one way or the other you should be prepared to incur some administrative expenses from an internal drone program. Administrative positions in Canada listed on Workopolis tend to range between $40,000 and $75,000.

In the tables below, the admin and pilot costs are calculated on a per drone basis, with the assumption that managing 10 drones would be a full-time administrative position, and so a single drone in an organization would make up 10% of an employees workload and pay.

Initial Costs

Training

$600

Insurance

$1,000-6,000

Admin

$4,000-$7,500

Pilot

$4,000-$11,000

Compliance¹

$20,000

Equipment

$3,000-$30,000

Total

$32,600-$75,100

Recurring Annual Costs

Training

$50 per 2 years

Insurance

$1,000-$6,000

Admin

$4,000-$7,500

Pilot

$4,000-$11,000

Compliance²

$1,000

Equipment

$1,000-$10,000

Total

$11,050-$35,550

 

1) Initial compliance documents would be approximately $20,000 to $30,000 regardless of how many drones you have in your fleet and would not increase significantly with additional drones. All other categories would increase within the range of prices for that category on a per drone basis.

2) Recurring annual compliance costs estimated per drone.

Initial vs Recurring Costs

To build an in-house drone program, we estimate that your initial costs will be between $32,600 to $75,100 for your first drone. Each additional drone will have an initial cost of $12,600 to $55,100. The recurring  costs per drone would be between $11,025 and $35,525. When you break the prices down in this way, it becomes pretty apparent that for an internal drone program to be financially viable really comes down to how often you will fly your drone and how much the same data would cost if it was gathered from a third party service provider.

Drone Service Providers

As an alternative to using your own equipment and employees, you could  hire a drone operator that can do the jobs on your worksite for you. These services will vary in cost based on the capabilities and equipment required for the particular job. Prices could range from a few hundred dollars to thousands. For high end gear that can provide very detailed mapping data, for example, you may pay $2500 or more for a full day of mapping work.

 

Keep in mind that price is not the only factor. Using a third party service provider may be less expensive in some instances, but you also need to have confidence that they understand your job well enough to deliver the data that you need. Availability of qualified pilots may also be an issue in some areas as this technology continues to be incorporated into various Canadian applications.

 

If you’re looking for someone to complete a drone job for you, remember that Coastal Drone Co. also operates the Remote Pilot Network. We can connect you with pilots in your area to get your drone flights accomplished.

Conclusion and Solutions

When deciding if an internal drone program is right for your organization, be sure to consider all of the factors that we discussed above. Up until this point, how was this data collected? What were your data collection costs prior to using drones? If the ability to gather this data is new, then what value does it create and what is that worth for your organization? If you aren’t sure if an internal drone program is right for you, then maybe dip your toe in with a third party service provider. This is a less expensive way to see some data, and decide if it creates value for your organization.

Although there are a lot of variables and a wide range of prices that apply to those variables, hopefully this article has shed some light on the sorts of costs you could incur by creating a company drone program. Coastal Drone Co. offers training, compliance solutions and remote pilot services and we’d love to help you if you intend to incorporate drones into your business. Contact us if you would like any help with the services that we offer and we’d be happy to help.

Managing a Drone Program Can Be Simpler - Ask Us How

 

Reduce your costs with Coastal Drone as we help you develop a comprehensive drone compliance program. We have the expertise and aviation experience to be able to help you build manuals, procedures and policies that will make sense for your business. Best of all, we’re confident that we can build a compliance package that will work well for your operation for less than it would cost for you to do it internally. 

We’d love to hear from you, drop us a message with your thoughts or ideas and we’ll be in touch as quickly as possible! 

 

     

    7: Episode 7 – Starting Your Own Drone Company

    7: Episode 7 – Starting Your Own Drone Company

    In episode 7, Coastal Drone’s president Alec Wilson sits down (virtually) with Ali Miri, the Co-Founder & CEO of UAViation to discuss the process of starting a successful drone company. The two industry experts also discuss their thoughts on the future of the sector and potential opportunity for enthusiasts and professional pilots.