Who Cares About Air Rights?
Hold On To Your Corner Stone Of Freedom It's Worth It
Amazon, Walmart and Google, centralized, command and control organizations have a combined market cap of $4.5 trillion. They want to use privately owned low-altitude airspace to help compound their growth through drone delivery.
Drones will be a net positive for society, they are useful for delivering packages to us and easing road congestion. They will also pay private real estate owners to use their air rights increasing wealth and providing passive income.
Recent changes at the top of the Federal Aviation Administration (FAA) mean the licences and waivers that commercial drone operators need for part of their operations to fly are being granted at speed. The FAA regulates what machines can fly and who can fly them and wants the industry to succeed.
Amazons Long Term Horizons
In a significant development Amazon has received the green light from the Federal Aviation Administration (FAA) to operate its Prime Air delivery service Beyond Visual Line Of Sight (BVLOS), allowing for the expansion of its drone delivery programme. This regulatory approval was announced last Thursday and it removes one of the longstanding barriers that has restricted the range of its drones.
In 2013, founder Jeff Bezos predicted that drones would be delivering packages to customers' homes within five years. Progress was delayed due to regulatory hurdles and the lack of permission from the owners of the airspace.
Amazon has since commenced limited drone deliveries in College Station, Texas, and Lockeford, California. With this regulatory approval from the FAA, Amazon pilots can now operate drones remotely without the need for visual contact, paving the way for the delivery of packages to customers over longer distances. The company has been working to obtain this approval, developing a strategy to ensure its drones can detect and avoid obstacles in the air.
In addition to this, Amazon has submitted extensive engineering information to the FAA and conducted flight demonstrations in front of federal inspectors, including simulations involving real planes, helicopters, and hot air balloons to showcase the drone's ability to safely navigate away from each of them.
The company has also announced plans to close its drone delivery site in Lockeford and open a new one in Tolleson, Arizona, later this year.
By the end of the decade, Amazon aims to deliver 500 million packages by drone annually, but they need the low-altitude airspace to be unlocked for them to achieve this.
While this step by the FAA and Amazon gives them documented approval for their drones and the ability to fly Beyond Visual Line Of Sight (BVLOS) it does not give them access to low-altitude private airspace. Without permission to be in the air how can they fly legally? For now Amazon are grounded or else they trespass into individual real estate owners airspace without permission.
Walmart Drones Don’t Have Permission Either
Walmart has over 4,500 stores located within reach of 90% of the US population. This means drone delivery from Walmart is set to reach most neighbourhoods. But can Walmart fly around in low-altitude air space without permission? Whose permission do they need?
Wing, the drone technology subsidiary of Google parent Alphabet, has a partnership with Walmart, supporting deliveries via drone. Walmart initially launched drone deliveries from three stores in Northwest Arkansas in late 2021 and has since with stealth expanded the services to:
Texas: Garland, Murphy, Plano, Richardson, Mesquite, Dallas, Rowlett, Colony
Florida: Clermont, New Port Richey, Valrico, Winter Haven, Tampa, Brandon, Riverview, Seffner
Arizona: Phoenix, Glendale, Peoria
Arkansas: Farmington, Bentonville, Rogers, Pea Ridge
Virginia: Virginia Beach
Utah: Lindon, Herriman
North Carolina: Raeford
The home owners, real estate companies and developers who own the air rights above the buildings and lands in these locations in many cases wish to give permission, for a small fee, to the drone companies to allow the transit and need a solution for this.
Walmart offers on-demand delivery for customers living within a six-mile radius of participating stores, utilizing drones that can fly BVLOS. These 6 miles of surrounding air rights are now proving even more valuable to the land owners than before. Air rights can trade at up to $400 per sq ft in certain locations.
Walmart has been investing heavily in drone technology, partnering with various companies such as DroneUp, Flytrex, and Zipline to provide delivery services.
Walmart, Amazon and Google want to serve and help the needs to the local communities they are operating drone delivery in as I understand it. To do this they need the permission of the local communities who individually control the low-altitude airspace or their ambitions to scale will not be warmly welcomed.
Whats Going On?
Air rights are important to those who need them, and by extension those who own them. As low-altitude airspace becomes more useful for a variety of reasons these air rights become more valuable. A resource owned privately and decentralized for the greater good of society needs to be guarded or it will be taken and used to extract wealth from the owners rather than enable the owners to gain wealth and passive income from it.
The speed at which the FAA are now promoting drone delivery is very welcome and the drone delivery services and retailers who want to use them are poised for exceptional growth in this area. With that growth also comes a significant saving in costs. Road based delivery is ~$7 and drone delivery at scale can be as low as ~$0.50 per journey, according to reports from McKinsey and drone operators. Their margin is your opportunity. Owners and traders of the air rights have a unique position to gain from low-altitude airspace use.
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