Amazon's Drone Program To Expand With New FAA Clearance - What's On The Move?

Amazon.com Inc’s AMZN Prime Air has been granted permission by the Federal Aviation Administration (FAA) to operate its drones beyond the visual line of sight (BVLOS).

The approval marks a significant milestone in Amazon’s journey to expand its drone delivery operations, allowing the company to serve more customers with faster delivery options.

The FAA’s decision comes after Amazon developed and demonstrated a comprehensive BVLOS strategy that includes advanced onboard detect-and-avoid technology.

The demonstrations, observed by FAA inspectors, showcased the drones’ ability to detect and avoid obstacles like planes, helicopters, and even hot air balloons.

The onboard detect-and-avoid system, a critical component of the BVLOS strategy, ensures that drones can safely navigate various airspace challenges.

Expansion Plans for Amazon Prime Air now include an extended delivery area in College Station, Texas. The new permissions enable Amazon to offer drone deliveries to more customers, with thousands of items, including household essentials and beauty products, available for fast delivery.

Later this year, Amazon plans to integrate drone deliveries into its broader delivery network, deploying drones from facilities near Same-Day Delivery sites for even quicker service.

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The company received an Air Carrier Certificate from the FAA in 2020, allowing it to operate as an airline for drone deliveries.

With the latest BVLOS approval, Amazon is poised to scale its drone operations, particularly in densely populated areas, using its current MK-27 drones.

The company aims to deliver 500 million packages per year by drone by the end of the decade.

The approval means pilots are no longer required to see the drones directly, reported Bloomberg. Besides Amazon, Alphabet Inc. GOOGL and Walmart Inc. WMT have also ventured into drone deliveries with varying degrees of success.

A significant setback for Prime Air occurred in June 2021 when a drone crash led federal regulators to scrutinize its airworthiness, following multiple safety failures and a resulting brush fire, per the report.

In 2023, the company achieved over 4 billion same-day or next-day deliveries for U.S. Prime members.

Amazon stock has gained more than 48% in the last 12 months. Investors can gain exposure to the stock via Consumer Discretionary Select Sector SPDR Fund XLY and Vanguard Consumer Discretionary ETF VCR.

Price Action: AMZN shares are trading lower by 1.08% at $180.05 at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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