FAA Decision boosts AVAV long term prospects

Since my last post AVAV has continued to rise as news leaks of their approval (see below from Reuters) by the FAA for commercial use, the first ever approval for drones outside of military use. I believe that the figures below are in fact understated, and the potential for drone sales is over $200bn in the next 10 years. Avav is poised to be a major player. As AVAV also has a lock on electric vehicle charging I see a bright future ahead.

The drone industry was heartened by the FAA's decision in late July to greenlight Boeing Co's (BA.N) Insitu ScanEagle and AeroVironment Inc's (AVAV.O) Puma, in the first such U.S. certification of drones for commercial use.

These remote aircraft weigh less than 50 pounds 22 kilograms), have wingspans of about 4.5 feet and come with a hefty estimated price tag of $100,000 each.

Their approval is seen as a first step in unleashing a potentially multibillion-dollar industry that so far has been largely limited to military and law enforcement applications.

The Association for Unmanned Vehicle Systems International (AUVSI), an industry group, hailed the FAA's certification of the two drones. "This is a huge step forward and this is a big deal for our industry," said Ben Gielow, government relations manager for the group.

Congress in early 2012 passed legislation calling on the FAA to write rules by 2015 that would govern the commercial operation of drones that can be used for everything from spraying pesticides on farmland to catching exotic-animal poachers to monitoring sport events.

Aviation and aerospace industry research firm Teal Group has estimated that annual spending on drones around the world will almost double to $11.4 billion by 2022. AUVSI has estimated the industry could contribute more than $80 billion to the U.S. economy over a decade.