AeroVironment, which claims to be the largest supplier of drones to the U.S. military, is also an example of a pure-play robotics company that is profitable.
Many people have a negative opinion of aerial drones for military use, but unmanned aircraft systems first developed for the defense industry can save lives, whether on the battlefield or in emergency-response situations. AeroVironment Inc. has been serving the national security and commercial markets, and it demonstrates how robotics startups can grow from government roots.
“We see our experience as a big positive for numerous applications,” said Steve Gitlin, vice president of investor relations at the Simi Valley, Calif.-based company. “We think robotic airplanes have the potential to save lives, protect property, and reduce costs.”
AeroVironment starts in national security
“AeroVironment launched the first hand-portable unmanned reconnaissance system in the mid-1980s, and the company saw broad potential for impact,” Gitlin told Robotics Business Review. “The U.S. Marine Corps first took two early Pointer systems, and we entered and won a series of five programs dating from 2003 for the U.S. Navy and Marines, 2005 for the U.S. Army, 2006 for the U.S. Air Force, 2007 for the Special Operations Command, and 2012 for the Army renewal.”
The U.S. Department of Defense was the primary contractor for Group 1 unmanned aircraft, which consists of the smallest, lightest, and cheapest drones, he explained. “It’s the most tactical, flying at 500 ft. above ground level,” said Gitlin. “We’re the largest supplier of drones to the DoD, but we represent a fraction of the spend, in comparison with the Predator, GlobalHawk, and other larger solutions.”
“AeroVironment has optimized sensors, and its ground station is interoperable with all aircraft in the our fixed-wing family,” he added. “The flying time is 50 minutes for the Wasp, 90 minutes for the Raven, and two and a half hours for the Puma. The Puma LE can fly for a total of five and a half hours.”
“In many cases, they’re the only tool that individual warfighters can rely on for situational awareness within 10 to 20 km [6.2 to 12.4 mi.] of where they are,” Gitlin said. “This spawned development of the Switchblade, which integrates sUAS [small unmanned aircraft systems] with lethal technology to create a precision missile, or what the government calls a ‘loitering missile system.’ This precision reduces collateral damage.”
“Some people are concerned about drone warfare, but there’s no debate about the value of better information,” he said. “Better information increases the probability of mission success. Unlike conventional gravity bombs and missiles, which too often result in injuries to noncombatants, our systems can better identify the threat and surgically neutralize it. Part of effective warfare is winning hearts and minds.”
AeroVironment was an RBR50 honoree from 2012 through 2014. It has delivered more than 30,000 units all over the world, including to 45 allied countries, and international contracts accounted for 52% of its revenue in fiscal 2019, said Gitlin.
Capacity, commercial challenges
Drone designers are familiar with the trade-offs between battery size and payload capacity or endurance.
“Unlike with larger aircraft, our engineers are more constrained in swapping weight, power, and cost. They’re trading grams. It’s pretty amazing that the Puma LE has a payload capacity of 5 lb. and can fly for 5.5 hours,” said Gitlin. “We have a fair amount of IP [protected intellectual property], and our systems are designed, built, and tested in the U.S.”
The commercial drone market has been slow to take off, he acknowledged, in part because of the ongoing pivot from military to consumer to commercial markets. Regulations are necessary for safety, but the U.S. Federal Aviation Administration (FAA) has been reconsidering beyond visual line of sight (BVLOS) restrictions.
“There’s a lot of noise, and some businesses have been slow to adopt robotics,” Gitlin said. “We consider ourselves to be focused on delivering long-term growth. We have teams focusing on AI, machine vision, and some funded by customers to develop certain capabilities further.”
“In addition, customers want to know that everything works together, so they tend to prefer one supplier,” he said. “That works well for us, because we can provide mission-critical applications in real-world environments, including both poles [Arctic and Antarctic], mist, and deserts. Our systems can land hard and are easy to disassemble.”
Path to new markets and profitability
“Our technology provides benefits to stakeholders across industries, and we benefit from developments in other markets,” Gitlin said. “From smaller and more efficient battery packs that allow for longer flight times to more capable, lower-power sensors from smartphones, we can read details on a billboard from thousands of meters away.”
“By integrating robots, software analytics, and connectivity, operators can proceed with greater certainty,” he said. “In the commercial space, AeroVironment has scanned oil pipelines in the Arctic with lidar for 3D, geo-rectified imagery for BP. We’ve scanned power lines in remote areas, as well as railways to help transport companies check the condition of rails and bridges.”
“We evaluated a number of industries and developed a commercial design,” added Gitlin. “Our Quantix system, which includes a hybrid VTOL [vertical takeoff and landing] system, is better for farmers and real estate developers. They can simply trace a finger on satellite imagery to set a boundary, and the aircraft develops its own flight plan, streams back RGB and multispectral imagery, and returns to the launch point entirely on its own.”
“This turns drone data collection into an app, which is good for anything in a hard-to-reach area,” he said. “While the military doesn’t need lots of analytics, we’ve licensed software from an Australian company to process video in real time and identify anything moving in a frame. It could be quite taxing to look at a screen all day long.”
“AeroVironment is the only pure-play aerial robotics company that’s public and profitable,” claimed Gitlin. “We went public in 2007, and our track record is pretty strong. We operate like a tech company, reinvesting 8% to 10% of our revenue in internal R&D.”
“We have no debt and $300 million in cash and investments, so customers know that we’ll stick around,” he said. “AeroVironment acquired Pulse Aerospace last year, and we’re actively looking to acquire other technology and assets.”
The sky is the limit for AeroVironment
AeroVironment has also developed a high-altitude, solar-powered drone for government and commercial customers. Systems include the Helios flying wing, which set a record altitude of 97,000 ft. above Hawaii in 2001, said Gitlin.
“Today, we’re engaged with SoftBank for a telecommunications joint venture,” he said. “We have developed a 260-ft. flying wing with 10 electric motors and battery packs that can carry a telecom payload to 65,000 feet for months a a time and provide coverage to an area 120 miles in diameter. It’s a cell tower in stratosphere and has potential for remote sensing.”
Other cutting-edge work at AeroVironment includes its work with NASA’s Jet Propulsion Laboratory (JPL) on the Mars 2020 rover mission. It includes a drone helicopter that must work in the red planet’s atmosphere, which is less dense than that of Earth.
“The atmosphere on Mars is the same as 100,000 ft. above the Earth, so we designed propulsion rotors and gearing that we successfully demonstrated in an atmospheric chamber at JPL. The helicopter is on its way to Florida for launch in the rover this summer.”