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UPS receives FAA hub for comprehensive supply of drones



United Parcel Service Inc.


UPS -3.08%

said it received the first of its kind of federal approval to start setting up a fleet of unmanned aerial vehicles to provide health supplies and, finally, consumer packages potentially across the United States

In the recent regulatory increase for expanded commercial drone services, the company also intends to gradually phase in routine night flights and heavier cargo limits – areas that are now generally out of bounds for most operators. [1

9659005] According to the announcement from the Federal Aviation Administration on Tuesday, the company's Flight Forward unit was given an instant green light to send medical products and samples in North Carolina across various hospital campuses. But the broad approval for a whole fleet of future drones and pilots on the ground – which goes beyond what the FAA previously approved – opens the door to many other types of extended-range applications spanning rural and suburban areas. FAA approval does not apply to urban areas.

Calling it an important step to improve health care services and eventually a host of other industries, the company said that the FAA's approval "has no restrictions on the size or scale of operations." UPS said it has already begun restricted flights under the new certification.

"It just gives us many opportunities,"

David Abney,

the company's chairman and CEO said in an interview. "We're going to move forward quickly and expand quickly," he said, "it's not going to be a small operation." Over the course of months, Mr. Abney predicts that the first phase may include 100 or more hospital complexes.

Shares of UPS were down 1.8% in trading Tuesday morning.

As delivery options expanded, the company said that future steps could include a single operator on the ground controlling multiple flights, or using drones to supplement traditional parcel delivery with trucks in rural areas.

The goal is to be the first drone operator to operate on a significant scale, Mr. Abney added.

The FAA's move comes months after it gave

Alphabet Inc.

First authorization for Wing Aviation device to fly a drone park for the supply of consumer goods. But the specific approval covered only a rural area around Blacksburg, Va., And mandated detailed review of applications for similar applications elsewhere.

UPS, on the other hand, said that certification provides a faster and easier way for case-by-case approval of new uses. If this process proves to be successful, the final step could set an important precedent in the burgeoning, fiercely competitive drone industry's quest to dramatically increase the frequency and breadth of services.

"This is a big step forward to safely integrate unmanned aerial systems into our airspace," Transport Secretary

Elaine Chao

said in a news release, adding that the move also improves health care in North Carolina and maintains U.S. leadership in unmanned aviation.

Amazon.com Inc.

and

Uber Technologies Inc.

are among the companies fighting for similar US approvals to potentially transport food and small consumer goods to private customers. Many of these companies have turned to overseas to test provisional delivery systems, citing accelerated regulatory actions from Australia to Iceland to Switzerland.

As delivery options expanded, United Parcel Service said that future steps could include the use of drones to supplement traditional parcel delivery with trucks in rural areas.


Photo:

Christopher Dilts / Bloomberg News

Like Wing, UPS will eventually be able to operate in the United States, which is the equivalent of a small charter or cargo ship using conventional aircraft, with specific pilot training programs and accident prevention procedures.

Mr. Abney also said that UPS plans to invest in ground-based technologies to better track drones, while working with manufacturers to create new drone models.

However, along with all other drone masters, the UPS initiative still faces major barriers to rapid growth until the FAA establishes industry-wide rules that allow flights over urban areas and set standards for remote identification of drones by law enforcement and air traffic control.

These long-awaited regulations will be based in part on input from real flights and pilot programs championed by the Transportation Department and White House aides.

In a speech last month to an international drone conference in Las Vegas,

Daniel Elwell,

The FAA deputy leader said the lesson "ignites a creative fire in the industry." In testimony to a subcommittee on housing grants last week, Elwell said regulations identifying remote identification requirements – seen as the building blocks of predictable drone industry growth – were originally held up by a number of technical problems. But now "the rule is moving," he said, while White House officials give the proposal a top priority review.

Meanwhile, operators can apply for broad certification such as UPS, or take up FAA invitations to apply for more targeted waivers or exceptions under existing rules.

Write to Andy Pasztor at andy.pasztor@wsj.com

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