drones: new challenges for a new market

October 14, 2019

Giulia Mauri, Meriem Bennari and Filippo Arcaleni explain what has happened since the new EASA Basic Regulation and its application to Drones and explores the challenges that the drones’ market presents to the aviation community

  1. General Description of the New European Framework

The future of aviation cannot be imagined without taking into account “the market of drones”, which is a major challenge for the aviation industry combining at the same time the most advanced technologies and the latest innovations in the aviation engineering in order to suit the evolving population’s needs. But how are drones currently regulated? The New Basic Regulation (2018/1139) innovates by being the first EU-wide piece of legislation for civil Unmanned Aircraft Systems (hereafter “UAS”) of all sizes, defined as being:” any aircraft operating or designed to operate autonomously or to be piloted remotely without a pilot on board”. This new regulation deals with the growth of air traffic, increase security, reduce costs, delays and the impact of air traffic on the environment. EASA, the European Union Aviation Safety Agency, has also extended its scope by adding UAS as a new competency.

Three types of risk-based categories for drones have been created and proportional rules apply for each type of drone. The “Open”, “Specific”, and “Certified” categories are further described in the implemented and delegated acts which have entered into force since June 2019 (regulations(EU) 2019/945 and 2019/947). They establish a framework of technical and operational requirements such as registration, certification and general rules of conduct, operators must abide by. The “Open” category, with low-risk operations (which is basically involving the drone you have at home or the one used by your children), does not require any prior authorization, but some restrictions apply such as some areas where it is not permitted to fly. For the “Specific” category, operators will have to require an authorization from the national aviation authority based on a standardized risk assessment or a specific scenario. It will be the case of commercial drones. At last, in case of high-risk operations (“certified” category), mostly military drones,the drone and the pilot will have to be certified and the general aviation rules will apply. All drones, except those of the open category below 250g or below 250g without sensor captors, will be subject to registration as of June 2020.

Projects around them are continuously growing and companies are developing their use in situations as various as transport of medicines to elderly people who lack transportation the delivering of food of your favorite restaurant by Uber and your online purchases on Amazon at home, as well as the development of the air mobility first aid, as for example the “Ambulance Drone” which is a brand new app allowing to call urgently an ambulance drone equipped with cameras, micros, and necessary material that will connect you to a doctor who will help you to deliver first aid and namely reanimate people in case of heart attack.

  1. Safety

This expanding spectrum of UAS applications will clearly modify the standard of living of people but most of all may increase the risks relating to their safety. We can wonder how the sector would be regulated in order to guarantee the safety of citizens while being transported or to avoid any crash into structures, vehicles and people resulting in damage to property or injury to a person.

The implementing and delegated acts set up standards on the design and manufacture of UAS as well as their operation. On one hand, some categories of drones will have to be designed in compliance with the CE marking for products brought on the European market attesting “ the

conformity of the product with the applicable requirements of the relevant Union harmonization legislation providing for its affixing”. On the other hand, the obligation of the operator of having a Light UAS Operator Certificate (“LUC”) for certain types of drones raise awareness and develop the knowledge of the applicable regulations and restrictions and will help reducing incidents. Moreover, this license is equivalent to the AOC, correspond to the safety level applicable in general aviation as prescribed by the Riga declaration of 2015 which stated that the UAS regulation “must not be less safe than is accepted from civil aviation in general”.

An interesting point that raises now is “how to organize the traffic of UAS”? A zone of fly that covers drones’ operations in low-level airspace, beyond visual line of sight is being created to secure and grant a fair access to all airspace users. This is called the U-SPACE and it can be described as being a set of new services such as drone registration, electronic identification, geo-awareness, meteorological conditions, navigation and communication services and procedures that connects all flying drones and makes them visible for both authorities and citizens. This will definitely support the UAS safety, efficiency and security. The publication of the EASA ‘s opinion on the U-SPACE is expected for December 2019.

  • Liabilities

The increased use of drones connects with an increase in the potential collision exposure. While flying they can indeed crash into structures, vehicles and people due for instance to lost of control of the piloting in reason of software’s issue, not updated program, interferences, or if the drone runs out of power. There is also the issue of lack of rules concerning the illegal use of these. Terrorists could launch a cyber-attack, hijack the drone, take it over and exploit the personal information or even send misleading information to the remote pilot/computer. Who’s going to be held responsible in such scenarios?

There is currently no harmonized regulation on the UAS liability’s regime, the national legislations are still defining the responsibilities. The annex IX of the new basic regulation even mentions that “The operator and the remote pilot of an unmanned aircraft must be aware of the applicable Union and national rules relating to the intended operations, in particular with regard to […] liability, insurance, […] ”. The piloting of drones can thus be a true challenge as it might be difficult for an owner of drones registered in Malta to know the UAS legislation of another member state as they vary between each of them and that some translation might be needed. However, the study made by the European commission on third-party liability and Insurance Requirements of Remotely Piloted Aircraft Systems has pleaded in favor of a non-harmonized third-party liability regime across the EU.

EASA will publish “Acceptable Means of Compliance”, the guidance material and the first risk-assessments in October 2019 to describe the measures that comply with the new European framework. We also believe that the U Space by obligating operators to register might facilitate the determination of liabilities of the drones’ user.

Concerning the insurance part, the regulation 785/2004 for Air Carriers and Aircraft Operators, defines requirements for third-party liability insurance and the minimum level of insurance coverage per accident, based on the Maximum Take-Off Mass of the drone that professional operators have to comply with. As regards drone activities for leisure or non-commercial purposes, the private liability insurance may apply if any subscribed by the operator and if such claim is included in the insurance company’s policy.

The Riga Declaration claimed for the establishment of compensation funds to cover victims of UAS accidents. This has not been regulated yet, however, should a passenger have issues in the course of an international UAS flight or his/her goods damaged, a compensation could still be granted by the “carrier” on the ground of the Montreal Convention for the Unification of Certain Rules Relating to International Carriage by Air, except under extraordinary circumstances and as long as it can be demonstrated.

  • Cyber-security

Photos, videos, map views, contact details… are only a small part of the massive quantity of data’s that can be collected by drones. Information can be transmitted by wireless communication (radio, wi-fi, satellite) and the interception of these communications is likely to weaken the security of the confidentiality of data.

Let’s take the example of the prototypes, which are aiming to transporting people in a fast and ecologic way by using electric vertical take-off and landing (eVTOL). It has already been demonstrated for autonomous cars, that the system can be hacked and people with malicious intention could hijack the vehicle. The same could apply to UAS and consequences could be disastrous if we imagine the large number of drones flying in the U-SPACE sending misleading real-time information to the authorities such as their detection or speed. In consequence, it is imperative that the proper safeguards are taken by the lawmaker.

Regulations provide that the manufacturer is required to ensure privacy and data protection regulation by design and by default and inform the user on safe drone operation. EASA in its Notice of Proposed Amendment 2019-01 would like to require manufacturers and operators seeking certification of new aircraft systems and networks or modifications to existing ones to address threats that can lead to unauthorized access and disruption of electronic information or electronic aircraft system interfaces.

We think that encryption might be an option to secure the personal data collected by the drone but the usage of the blockchain technology would be more protective. Also, in case of commercial drones, before the customer use the vehicle it would be appropriate to give him general terms and conditions to opt-in with and where the implemented firewall, the GDPR provisions , etc are described.

To sum up, this fresh legal framework meets, as a whole, the expectations of the industry. EBAA, The European Business Aviation Association declared that “they were happy to see that the new rules reflect a proportionality with respect to the nature and risk level of the operations performed” and Drone Alliance Europe stated that “The formal adoption of the regulations allows for the implementation of strong safety requirements and establishes the foundations to enable the further development of the European drone services market”. Nevertheless, it is clear that this is only the first stone has been laid and we are looking forward to seeing the developments on upcoming regulations considering the challenges pointed out in this hereby contribution.

Giulia Mauri

Mauri is a partner at Pierstone Brussels. She has more than 20 years’ experience in advising national and international clients on all aspects of aviation and transport-related transaction, including asset-finance and leasing, regulatory issues, carrier’s liability and litigation matters. She also acts as a mediator and is the co-founder of Mediation4Aviation, a mediation platform dedicated to the aviation industry. Giulia co-chairs the European and Legal Affairs Committee of the European Business Aviation Association and is an active member of the Industry Affairs Group of the European Regions Airline Association. www.pierstone.com/team/giulia-mauri; giulia.mauri@pierstone.com; +32 02 899 23 62.

Filippo Arcaleni

Arcaleni was graduated in Law at University of Perugia and qualified as an expert in “international contract law and negotiation” for national and international small and medium business enterprises. He trained, worked and co-operated with Italian Law firms and companies in Italy, UK, Spain and Malta. He is currently an Associate with DF Advocates (http://dfadvocates.com/), wherein he specializes in Corporate and Commercial law, Aviation, Maritime and Technology. He stepped into the aviation scene around five years ago and has steadily grown as an industry expert. He frequently advices and assists clients on a multitude of complex transactions relating to the business aviation industry.