Airborne innovation

A LOT of flying toys will appear first under, then over, Christmas trees later this month. Most drones sold today are for fun, and produced by the likes of DJI (a Chinese firm), 3D Robotics (American) or Parrot (French). Niche firms such as AirDog (of Latvia) offer outdoor narcissists ones that will follow and film them as they surf, ski or cycle. In Christmases to come, some of them may be brought not by Santa but by a delivery drone like Amazon’s latest prototype, which it demonstrated in a video on November 29th.

A second, more grown-up set of civilian-drone companies is also rising. These supply services to industry, agriculture and governments, and deploy both off-the-shelf flying machines (in essence, toy drones with extra sensors or cameras attached) or specialist-made ones. New technology, often adapted from smartphones, makes their use remarkably easy.

There is a proliferation of such startups in Europe, where regulations on the use of drones in public places have been passed in many countries—thereby providing legal certainty for operators—and are mostly more permissive than those in America, for example. Andrew Charlton, of the Small UAV Coalition, a lobby group for the industry, argues that this is a big reason why “over 50% of the world’s drone activity, its new systems, is happening in Europe—big business is emerging.”

Take Delair-Tech, a French outfit with 50 staff, part-owned by Parrot. It builds long-range (50km or more) unpiloted craft in Toulouse. “We think of drones as DIY satellites, and of ourselves as closer to the space industry,” says Benjamin Benharrosh, one of its founders. French regulation limits such drones to 2kg (4.4 pounds) if flown out of sight of an operator. So far it is the only firm in France that is certified to fly such craft commercially.

Mr Benharrosh says annual turnover is €3m ($3.2m), but growing “by 200%”, after four years in business. Clients are varied. An American miner hired the firm to record the topography of a copper mine in Congo. France’s state rail company, SNCF, uses it to check its lines, for example to keep them clear of overhanging branches. Total, an energy firm, uses its drones to sniff for leaks along its gas pipelines. Rémy Martin, a cognac producer (and another investor in Delair-Tech), relies on its devices to check when its vineyards need watering.

“Agriculture, we think, will be the biggest market,” says Mr Benharrosh. The firm is researching how to use drones to monitor crops for disease, assess yields and identify where fertiliser is needed. It charges farmers 15 euros a hectare, but they can save five times as much, he says.

Willem Jan Boer of a Dutch firm, OmniworkX, says all sorts of industrial firms are learning that drones can save them money. Some of its 28 staff were recently hired by Tata Steel to send drones to look inside massive ovens. They have also been flown into oil tanks to look for rust or cracks, and up to the “flame tips” of oil rigs, where gas is flared, reducing inspection times from days to hours. Drones can be used in polluted indoor areas—with asbestos, or radioactive spots—too risky for humans.

The Rotterdam-based firm is expanding to Britain, Ireland, Germany and Malaysia and aspires to be a world leader in inspection and monitoring. But flying the drones is only “20% to 30% of the business”, says Mr Boer. Storing and analysing the huge quantities of data that are gathered during inspections is the bigger opportunity. Mr Benharrosh concurs: Delair-Tech records and processes billions of images, and “we realise the value might be in this in future.” A harvest of data, collected over years from the same field, enables the most efficient “machine learning”, he says, to maximise the benefit gained by the farmer.

Indeed, some firms are keeping out of the businesses of building and flying drones altogether, concentrating on data services or acting as intermediaries. Altitude Angel, a firm based in Britain, offers information services to the country’s 1,000-plus registered civil-drone pilots, on such things as regulations, terrain, and the locations of hazards, both fixed (cranes, say) or mobile (other aircraft).

The firm’s aim is to help customers to make their drone use safer by acting as a sort of air-traffic control, allowing the aircraft to keep updating their trajectories as they fly. But it is also seeking other buyers for the masses of data it collects, such as insurers, who as yet have little idea how to judge the risks of drone use, and thus how to price cover.

How fast the industry will grow depends on how fast regulators keep up with it. Britain is unusually permissive, but most European Union countries allow some public, commercial flying of drones. A problem is that national differences—on maximum weights, certificates for operators and so on—risk fragmenting what could be a single, EU-wide market. So, European firms are also looking farther afield. Delair-Tech’s Mr Benharrosh calls France “a wonderful experiment field”, but says scaling up requires bigger markets, and raising capital in America. Already three-quarters of his firm’s turnover is from outside Europe, and it is opening offices in Mexico, Congo, China and America.