“In a few years we will be operating drones capable of carrying 40 foot containers”

Michael Zahra is President and CEO of Drone Delivery Canada

How did you get from your start point to where you are today?

The first thing the company did was to reach out to the regulator. In the USA that’s the Federal Aviation Administration (FAA) while in Canada the role is split between Transport Canada and NAVCanada – Transport Canada writes the rules NAVCanada enforces them.

Some of our competitors in the USA went with a very strong approach to the regulator and said: “This is what we are going to do.” More often than not the regulator said “no”. Our approach in Canada was a lot more Canadian – more humble and collaborative. We reached out to our regulators and said: “This is what we’re thinking about doing: what do you recommend, what’s your approach?” and the Canadian government has been very collaborative, very visionary and very forward thinking so we’ve been lucky with that.

In the beginning they said: “If you do the following things we’ll collaborate with you to move the entire industry forward.” At Drone Delivery Canada we’re not just building a company, we’re building an industry and I would say we are now the global leaders of that industry. We have a lot of aboriginal or first-nation communities that are extremely remote. So there’s a lot of economic and social value in having drone logistics able to reach those communities and improve health care –and in the process improving the acceptability of more economical food, mail and e-commerce services.

So the government supported our initial plans to reach remote communities. It has also resonated well with the population. The government also told us to take a crawl-walk-run approach, which we’ve done.  We phase-in customer operations gradually. In the beginning we may have, for example, visual observers and then slowly remove them as we improve the risk profile. We have taken a very, very conservative approach because the government is looking for data points – what’s the risk profile? How are we de-risking things? How do we mitigate risk?

How did you manage to get your first commercial contracts – what hoops did you have to jump to prove you were safe?

Getting approval for our first customer was not difficult at all because of the work we had done in the last five or six years. We’ve been flying at our own test range for thousands and thousands of flights, so we’ve got the test data – flying in rain, flying in snow, flying at night, flying when it’s windy, flying different routes and so on. We’ve given all that data to the government so they have a high level of comfort in knowing what we’re doing. It’s proven, we’ve never had a crash and we have a very open door policy with them. They see our records – we’re very strict on documentation and procedures and so on – and we now a level of trust with them so we won the approval to fly generally across the country. Finding a customer was not difficult given all the pre-work we had done.

What was the sequence of events that’s got you to where you are now?

We’ve got four types in the fleet now with more coming. Our smallest “Sparrow” drone has a 10lb payload and 30km range and we got the compliance certificate for this drone in December 2017.  That meant the aircraft was compliant to fly. And then we got a “compliant operator status” certificate in February 2018 which meant the company was compliant to fly based on the appropriate rules and regulations. We had to prove the technology and prove the risk profile. Once we got the certificates, then we just had to look for customers. What we’ve been doing since is commercialising the business and building an operations centre.

How do you track the drone when you’re flying beyond visual line of sight (BVLOS)?

We have a combination of on-board and ground based sensors and teams of visual observers. So we use whatever is appropriate for the scenario.  We have flown BVLOS in Canada and the USA in active airspace, right beside airports. It’s a combination of drone-based, ground-based and visual observers. You would technically start with visual observers and then move to the technology which gives the government a level of comfort.

What are you doing in terms of commercial business and getting ready for the next few years?

From the commercial business point of view we have built our operations centre just north of Toronto and it was designed and built as a scalable global operation. So all our projects around the world will be managed from this central location. The FLYTE software does all the air traffic control and our operators here basically react to any emergency situations; otherwise the software does everything. We built it to be global and scalable and today we have the immediate capacity to manage 1,500 drones globally. So we’re well beyond the start-up phase.

Most of your operations are serving remote communities?

The first customer we signed was an aboriginal community in Northern Canada. The operation has not been implemented yet. The last two customers we signed, Vision Profile Extrusions Limited, a manufacturing company and DSV Panalpina, a Danish logistics company are not remote operations.  I would call those suburban, definitely not rural or remote.

Do you have the ability to spot other flying objects as well as your own drones via the ATC system you have developed?

Yes – although it depends on the country. There are some countries where everything, even recreational, small aircraft are fitted with ADS-B transponders. In Canada large aircraft and helicopters have ADS-B but small recreational aircraft do not. So we get the ADS-B information but we also have our own ground-based radar system. If it’s a short route we also have visual observers.

So it’s a combination of all of those things plus there’s a little bit of drone-based magic we use.  Our competitors talk about drone-based sense and avoid but a sensor on board the drone is not going to detect an aircraft 20 kilometres away doing 600 kilometres an hour. It might see a tree or a static wall but if you need something that’s really long range that’s going to detect fast-moving aircraft you need a ground-based radar. But our FLYTE software, in conjunction with ground based systems, can see everything from large aircraft to nearby birds.

Our competitors – Google Wing, Amazon – have all focused on the drone. For us the drone is part of it, but we are more focused on the system and the software, the overall controls and the management of the airspace. So our approach has been very, very, different. We buy in carbon fibre airframes from somebody else but the electronics on the platform is our intellectual property.

When will you be starting services to the Moose Cree nation in Canada?

The will probably start towards the end of this year or early next year.

So looking two years ahead what’s going to be different?

Our system is airframe agnostic, so hypothetically you could take a military helicopter or a Boeing 787 and if we put our system on it we can turn it into an unmanned drone, integrated into the airspace environment. So down the road we can look at using third-party airframes – which could be light payload ultra-long distance or ultra-heavy payload short-distance freight, capable of carrying a 40ft container.

When will you have a 40ft container transporter?

That’s probably a couple of years out. The largest transporter today is the Condor, which is gasoline powered, capable of carrying 400lb/180 kg with a range of 200 km. So we already have a heavy-lift drone. The next one after that will probably be capable of carrying couple of thousand pounds.

Where do you see your prime markets for these heavy-lift drones?

Our market is global and we have customers that we’re hopefully going to be closing soon in North America, Scandinavia, Africa. There are many remote communities around the world and then there are applications like open-pit mining where you have to move a document, a small tool or a 200lb hydraulic hose across an open pit mine which may take two hours – because of the nature of the mine – but would take just five minutes by drone. Then there are applications like shore-to-oil-rig, oil-rig to oil-rig, shore-to ship and bulk mail, bulk e-commerce, bulk medical supplies, emergency relief, food, water, safety/emergency supplies. There’s a very, very broad range of applications.

It must be a challenge to get regulators outside Canada to certify your operations. How much of an issue has that been?

There’s a lot of collaboration between regulators globally so what we do in Canada is, for the most part, 99% translatable to the FAA or to a regulator in Scandinavia, Australia and so on. And if you have certification recognised globally that’s a huge benefit. We might still need to do some further testing, extra documentation or proof of concept trials – we’ve had regulators come and visit – but the answer to your question is there’s a lot of commonality. You’re not starting from scratch in every country.

Are you looking for partners if you want to go global?

We’ve signed reseller-contracts that cover about 25 countries: Caribbean, New Zealand, Australia, a variety of places. Some are purely resellers who act as sales agents. Some also facilitate interfacing with the regulator for approvals because they may have some experience in aviation or defence and some will also assist in setting up our service infrastructure such as providing training.

Are you pursuing the military sector?

Absolutely. There are military applications where there’s just routine logistics or we could be front line, bringing supplies to frontline troops and maybe even bringing back an injured soldier – all of which is cheaper, safer and faster than despatching a large helicopter with a pilot. There are some things that the military will look at doing that civilians can’t do. Some of our reseller partners are already in the defence space.

How much time is spent on the commercial side and how much is still involved in development and testing?

Apart from the global re-sellers we have an in-house sales and marketing team.  A few months ago we announced a partnership with Air Canada Cargo – a huge national global airline – which is acting as a reseller for us into a variety of markets.  Our most recent contract is with DSV Air & Sea Inc. Canada, to deploy DDC’s drone delivery platform at the new head office and this opportunity was brought to the table by Air Canada because they had a relationship with DSV. We’ve got two engineering teams. One is an internal team undertaking R&D, adding new functionality to existing drones, integrating new drones into our system, developing software, and so on.  The other is an external team, running our test range and carrying out operations in the field.

Have you been able to gauge public reactions to what you are doing, especially in areas such as concerns around safety and the environment?

We take a very Canadian approach, humble and collaborative, to what we do. In all our projects we undertake a lot of outreach within the community. We will educate people about what’s going to be happening, what is the value – whether it’s a social or economic value – of what we do. We undertake outreach to the local airport, which may have helicopters, and to ambulance, police and fire services, so people understand what we’re doing and why. That methodology has worked extremely well for us and people buy into it. Our electric drones incorporate great social and economic value and people see that. There are a lot of medical applications and the drones are electrically powered so it’s a good green story. And they are very quiet. We are not flying over anyone’s house at four in the morning so noise is not really an issue.

And then we educate people on how we de-risk our operations and how we’ve obtained the certifications we have. The public is welcome to come and see the projects so they can understand that we’re very professional and experienced. We’ve had representatives come here from the FAA, Transport Canada, NASA, the military, airlines, so they know what we’re doing. As a result of all of this there’s a high level of comfort and positive response from the community.

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