March 26, 2015

Exemption No. 11241 Regulatory Docket No. FAA

- 2014

- 0692

Mr. Mark E

. Mc K innon

Counsel for Phoenix Air UNMANNED

, LLC McKenna Long & Aldridge LLP

1676 International Dr ive Penthouse

Mc L ean, VA 22102

Dear Mr. Mc K innon :

This letter is to inform you that we have granted your request for exemption. It transmits our decision, explains its basis, and gives you the conditions and limitations of the exemption, including the date it ends.

The Basis for Our Decision

By letter dated September 5, 2014 1 , you petitioned the Federal Aviation Administration (FAA) on behalf of Phoenix Air UNMANNED

, LLC ( hereinafter p etitioner or operator ) for an exemption

. The exemption would all ow the petitioner to operate an unmanned ai rcraft system (UAS) to conduct aerial inspection, patrolling, filmmaking, and precision agriculture

.

See Appendix A for the petition submitted to t he FAA des cribing the proposed operations and

the regulations that the petitioner seeks an exemption

.

1 By letter dated January 6, 2015, and posted to the public docket on the same day, the petitioner amended its petition

.2

Discussion of Public Comments:

A summary of the petition was published in the Federal Register on September 30, 2014, (79 FR 58848). Three comments wer e received. The Small UAV Coalition (Coalition) supported the petition, while the Air Line Pilots Association (ALPA) and the National Agricultural Aviation Association (NAAA) opposed it.

In support of the petition, the Coalition stated the petitioner has proposed to abide by stronger safety measures than hobby and modeler groups operating similar aircraft. The Coalition stated that it does not believe that heightened safety measures should be required for the petitioner simply because of the commercial n ature of its operations. The Coalition urged the FAA to adopt an evaluation framework for UAS operations under Section 333 of

Public Law 112

– 95 that weighs the relative safety issues and risks of UAS by class and operational circumstances, rather than ado pting artificial distinctions among unmanned aerial vehicles based on commercial and noncommercial operations. The petitioner’s UAS pose considerably less safety risk than larger UAS. The Coalition asserted that because UAS operations like the petitioner ’s pose minimal risk to safety, they should be subject to minimal and appropriate regulations.

The Coalition noted the FAA is to consider the seven factors 2 in Section 333 as a minimum.

The Coalition stated the petition shows the FAA should consider facto rs other than those specified in Section 333, such as location, altitude of its UAS, pilot qualifications, and its safety risk analysis plan. The Coalition maintained that the petitioner’s proposed operations satisfy the seven factors in Section 333 and in clude several additional mitigating factors to ensure the safety and security of the proposed UAS operations. The Coalition emphasized

the FAA must evaluate each factor within the context of the petitioner’s proposed

UAS operations.

The C o a lition a lso c o mm e nt e d th a t the F AA should g r a nt re li e f fr om the r e qui re m e nt to hold

a n a i r m a n c er ti f i ca t e. The Coalition further stated that if an airman certificate is required then,

a t a minimum the, F AA should p r ovi d e a n e x ce ption fr om the t ra ini n g a nd t e sting

r e qui rements in part 61 in favor of requirements p er tin e nt to the a i r c raf t a nd op era tion

p r opos e d. The C o a lition a lso a ss er t e d th a t in s ec tion 333 Congress intended for the FAA to

consider n a tion a l s ec u r i t y with respect to the operation as opposed to addressing it through
pilot certification.

2 Section 333(b) of P.L. 112 95 st ates, in part: “In making the determination under subsection (a), the Secretary shall determine, at a minimum

-- (1) which types of unmanned aircraft systems, if any, as a result of their size, weight, speed, operational capability, proximity to airports an d populated areas, and operation within visual line of sight do not create a hazard to users of the national airspace system or the public or pose a threat to

national security; ...”3

The FAA notes that

, a s dis c uss e d in the g r a nt of e x e mption to T r imble N a vig a tion L td.
(Exemption No. 1111 0 ) , n e ith e r s ec tion 333, nor th e F A A ’ s exemption authority 3 allows

the F AA to e x e mpt pilots from the st a tuto r y r e qui r e m e nt to hold a n a i r m a n c e r ti f i ca te a s

p re s cr ib e d in 49 U S C § 44711.

The Coalition commented that a visual observer (VO) should not be required for all small UAS operation s . The Coalition further asserted that the presence of one or more VOs may

allow the UAS to be operated beyond VLOS of the PIC and that the petitioner’s proposal to operate the UA within VLOS of the PIC and/or VO should be permitted.

The F AA n ot e s th a t one of the d e t er min a tions f or op e ra t ions und e r s ec tion 333 is op era tion

within vis u a l line of si g ht. T h e P I C must m a int a in V L OS w hile op era ti n g the UA. The F AA

finds th a t a VO c o mpl e m e nts the P I C’ s ca p a bili t y to s e e a nd a void oth e r a i r cr a f t, in c luding

wh e n t h e P I C m a y b e mom e nt ar i l y a tt e ndi n g to oth e r f l y

i n g t a sks. The VO p r ovid e s a n

a ddition a l l e v e l of op e ra tion a l s a f e t y

.

ALPA expressed concern regarding several aspects of the petition. ALPA noted the petitioner does not detail procedures for controlling the airspace or area of operation. Specifically,

ALPA stated there must be means to ensure that the sUAS remains within the proposed airspace and that the hazard of other aircraft intruding on the operation is mitigated.

The FAA believes the limitations under which the petitioner will operate (i.e., VLOS and at or

below 400 feet AGL ) are sufficient mitigations to this risk so that the operations will not adversely affect safety.

Regarding the petitioner’s statement that the PIC and observer will be able to communicate by voice, ALPA stated voice communication with the pilot is a lim ited mitigation if both the pilot and observer are not able to maintain a visual observation of both the aircraft and area.

NAAA stated UAS observers must be present and able to communicate with the operator from the most minimal distance possible. The co nditions and limitations regarding PIC and

VO communications address those concerns.

ALPA asserted the UAS’s lithium polymer batteries have numerous associated fire and explosion hazards as outlined in DOT/FAA/AR−09/55, “Flammability Assessment of

Lithium

- Ion and Lithium

- Ion Polymer Battery Cell Designed for Aircraft Power Usage (January 2010),” and that the safe carriage of the batteries and the mitigations in place for known risks should be addressed. The referenced study was primarily conducted to deter mine how certain battery cells react in a fire situation aboard manned airplanes. Given the size of the battery and the operating conditions of the UAS, the FAA concludes that the use of a lithium polymer battery will not pose an undue safety risk for the proposed operations.

3 49 USC § 44701(f)4

ALPA commented that command and control (C2) link failures are one of the most common failures on a UAS, and that lost link mitigations should require safe modes to prevent fly

- aways or other scenarios. The FAA has inserted condition s and limitations in this exemption to mitigate the risk associated with such failures.

ALPA also noted that the petitioner’s proposed operations are for “compensation or hire,” and therefore contends the pilot must hold at least a current FAA commercial pilot certificate with an appropriate category and class rating for the type of aircraft being flown, as well as specific and adequate training on the UAS make and model intended to be used. Similarly, ALPA

asserted a current second class airman medical certificate should be required. NAAA also commented on pilot qualification, stating

—

Just as manned aircraft pilots are required to undergo a rigorous training curriculum and show that they are fit to operate a commercial aircraft, so too must UAS operat ors. Holding a commercial certificate holds UAS operators to similar high standards as commercial aircraft operators and ensures they are aware of their responsibilities as commercial operators within the NAS. Medical requirements ensure they have the ne cessary visual and mental acuity to operate a commercial aircraft repeatedly over a sustained period of time.

The FAA has reviewed the knowledge and training requir e ments of sport, recreational, private

and commercial certificates and concluded that a UAS PIC holding a minimum of a sport pilot certificate, and operating under this exemption, would not adversely affect operations in the NAS or present a hazard to persons or property on the ground

ALPA noted the petitioner must specify a means to meet see a nd avoid requirements in § 91.113 given the absence of an onboard pilot. The FAA notes that all flights must be operated within VLOS of the PIC and VO.

ALPA commented the aircraft will not have a barometric altimeter as required by

14 CFR § 91.121

. ALPA stated that processes or mit i gations must be in place to ensure the UA can accurately maintain altitude including engineering processes, software development and control, electronic hardware development and control, configuration management, and design ass urance to ensure the aircraft and its control system(s) operate to the same level of safety as other aircraft operated commercially in the National Airspace System (NAS).

Regarding the fuel requirements of § 91.151, ALPA argued that using batteries as the only source of an aircraft’s power is a substantial shift from traditional methods of propulsion, and requires further research to determine best safety practices.

ALPA also expressed concern that the petition makes no reference to compliance with, or a request for waiver from, 14 CFR 61.195, Flight instructor limitations and qualifications

, which defines the requirements for flight instructors. A certificated flight instructor is5

authorized to provide the instruction required for the certificates or ra tings or currency listed in 14 CFR § 61.193. A person instructing on how to operate the UAS under the petitioner’s training program would not need to be a certificated flight instructor because the instruction is not being provided for a certificate or rat ing listed in § 61.193. We note that none of the UAS operations proposed by the petitioner require such flight instruction because § 61.31( l ) allows for operation of the UAS by an airman who is current per 14 CFR § 61.56 without a category and class rating . Instruction provided toward obtaining the pilot certificate required by this exemption would need to be provided by a certificated flight instructor.

ALPA expressed concern on whether the petitioner’s UAS can comply with the aircraft light requirements for night operations in § 91.209, given its limited electric power. The petitioner indicates that night operations will not be conducted and this exemption limits operations to daytime only.

Regarding §§ 91.405(a), 91.407(a)(1), 91.409(a)(2), and 91.417 (a) and (b), ALPA opposed the petitioner’s attempt to avoid compliance with established aircraft maintenance and recordkeeping requirements. ALPA states the UAS should comply with the same level of safety as other aircraft operated commercially in the NAS.

ALPA also expressed concern that the petitioner’s request is not for a single specific operation or location, but for all operations of the same general type. ALPA stated that this results in a considerable increase in the FAA’s oversight tasks. The FA A notes ALPAs concern and in order to minimize potential impact to the NAS, the FAA requires that each operator secure a Certificate of Authorization or COA which covers specific details of the petitioners operation. The FAA recognizes that UAS integration will generate new NAS access demand and will review and adjust accordingly.

NAAA noted that its members operate in low

- level airspace, and therefore clear low

- level
airspace is vital to the safety of these operators. NAAA stated that seeing and avoiding other
aircraft and hazardous obstructions is the backbone for agricultural safety, and that
agricultural pilots depend on pilots of other aircraft to perform their see

- and

- avoid functions
to prevent collisions. NAAA believes UAS operations at low altitude s will increase the
potential for collision with agricultural aircraft.

The FAA recognizes these concerns and has incorporated associated conditions and
limitations into this exemption, including: (a) a Notice to Airmen (NOTAM) issued for all
operations; (b) operations conducted within VLOS of the pilot in command (PIC) and the VO;
and (c) the UAS PIC must always yield right

- of

- way to manned aircraft.

NAAA stated that FAA airworthiness certification should be a requirement for all unmanned
aircraft to op erate within the NAS. NAAA recommended UAS be equipped with ADS

- B or
similar identification and positioning systems, strobe lights, high

- visibility markings and6

registration numbers. NAAA also recommended UAS be operated strictly within the line

- of

sight o f the ground controller, with the assistance of a VO and clear of any low

- flying manned

aircraft.

Section 333 of the FAA Modernization and Reform Act of 2012 authorizes the Secretary of
Transportation to determine, considering a number of factors laid ou t in the statute, that an
airworthiness certificate is not necessary for certain operations. The Secretary has made that
determination in this case and therefore the aircraft operated by the petitioner will not need to
be certificated by the FAA.

Airwort hiness Certification

The UAS proposed by the petitioner are the Pulse Vapor 35 and Vulcan Octo.

The petitioner requested relief from 14 CFR part 21, C ertification procedures for products and parts, Subpart H

— Airworthiness Certificates . In accordance wi th the statutory criteria provided in Section 333 of P ublic Law 112

− 95 in reference to 49 U

. S

. C

. § 44704, and in consideration of the size, weight, speed, and limited operating area associated with the

aircraft and its operation, the Secretary of Transport ation has determined that this aircraft meets the conditions of Section 333. Therefore, the FAA finds that the requested relief from

14 CFR part 21, and any associated noise certification and testing requirements of part 36, is

not necessary.

The Basis fo r Our Decision

You have requested to use a UAS for aerial data collection

. The FAA has issued grants of exemption in circumstances similar in all material respects to those presented in your petition. In Grants of Exemption No. 11062 to Astraeus Aerial (D ocket No. FAA−2014−0352), 11109 to Clayco, Inc. (Docket No. FAA

− 2014

− 0507), 11112 to VDOS Global, LLC (Docket No. FAA−2014−0382), and 11213 to Aeryon Lab, Inc. (Docket No. FAA−2014−0642), the FAA found that the enhanced safety achieved using an unmanned ai rcraft (UA) with the specifications described by the petitioner and carrying no passengers or crew, rather than a manned aircraft of significantly greater proportions, carrying crew in addition to flammable fuel, gives the FAA good cause to find that the U AS operation enabled by this exemption is in the public interest.

Having reviewed your reasons for requesting an exemption, I find that

—

• They are similar in all material respects to relief previously requested in Grant of Exemption Nos. 11062, 11109, 111 12, and 11213 ;

• The reasons stated by the FAA for granting Exemption Nos. 11062, 11109, 11112, and

11213 also apply to the situation you present; and7

• A grant of exemption is in the public interest.

Our Decision

In consideration of the foregoing, I find t hat a grant of exemption is in the public interest. Therefore, pursuant to the authority contained in 49 U.S.C. 106(f), 40113, and 44701, delegated to me by the Administrator, Phoenix Air UNMANNED

, LLC is granted an exemption from 14 CFR §§ 61.23(a) and ( c ), 61.101(e)(4 ) and (5), 61.113(a), 61.315(a)

, 91.7(a), 91.119(c), 91.121, 91.151(a)(1), 91.405(a), 91.407(a)(1), 91.409(a)(1) and (2), and 91.417(a) and (b), to the extent necessary to allow the petitioner to operate a UAS to perform

aerial data collecti on. This exemption is subject to the conditions and limitations listed below.

Conditions and Limitations

In this grant of exemption, Phoenix Air UNMANNED

, LL C is hereafter referred to as

the operator.

Failure to comply with any of the conditions and li mitations of this grant of exemption will be grounds for the immediate suspension or rescission of this exemption.

1. Operations authorized by this grant of exemption are limited to the Pulse Vapor 35 and

Vulcan O cto when weighing less than 55 pounds inclu ding payload. Proposed operations of any other aircraft will require a new petition or a petition to amend this exemption

.

2. Operations for the purpose of closed

- set motion picture and television filming are not permitted.

3. The UA may not be operated a t a speed exceeding 87 knots (100 miles per hour). The exemption holder may use either groundspeed or calibrated airspeed to determine compliance with the 87 knot speed restriction. In no case will the UA be operated at airspeeds greater than the maximum UA operating airspeed recommended by the

aircraft manufacturer.

4. The UA must be operated at an altitude of no more than 400 feet above ground level (AGL). Altitude must be reported in feet AGL.

5. The UA must be operated within visual line of sight (VLO S) of the PIC at all times. This requires the PIC to be able to use human vision unaided by any device other than corrective lenses, as specified on the PIC’s FAA

- issued airman medical certificate or

U.S. driver’s license.

6. All operations must utilize a visual observer (VO). The UA must be operated within the visual line of sight (VLOS) of the PIC and VO at all times. The VO may be used8

to satisfy the VLOS requirement as long as the PIC always maintains VLOS capability. The VO and PIC must be able to co mmunicate verbally at all times ;

e lectronic messaging or texting is not permitted during flight operations. The PIC must be designated before the flight and cannot transfer his or her designation for the duration of the flight. The PIC must ensure that th e VO can perform the duties required of the VO.

7. This exemption and all documents needed to operate the UAS and conduct its operations in accordance with the conditions and limitations stated in this grant of exemption, are hereinafter referred to as the operating documents. The operating

documents must be accessible during UAS operations and made available to the Administrator upon request. If a discrepancy exists between the conditions and limitations in this exemption and the procedures outlined in th e operating documents, the conditions and limitations herein take precedence and must be followed. Otherwise, the operator must follow the procedures as outlined in its operating documents. The operator may update or revise its operating documents. It i s the operator’s responsibility to track such revisions and present updated and revised documents to the Administrator or any law enforcement official upon request. The operator must also present updated and revised documents if it petitions for extension or amendment to this grant of exemption. If the operator determines that any update or revision would affect the basis upon which the FAA granted this exemption, then the operator must petition for an amendment to its grant of exemption. The FAA’s UAS

In tegration Office (AFS

- 80) may be contacted if questions arise regarding updates or revisions to the operating documents.

8. Any UAS that has undergone maintenance or alterations that affect the UAS operation or flight characteristics, e.g. replacement of a flight critical component, must undergo a functional test flight prior to conducting further operations under this exemption. Functional test flights may only be conducted by a PIC with a VO and must remain at least 500 feet from other people. The funct ional test flight must be conducted in such a manner so as to not pose an undue hazard to persons and property.

9. The operator is responsible for maintaining and inspecting the UAS to ensure that it is in a condition for safe operation.

10. Prior to each fli ght, the PIC must conduct a pre

- flight inspection and determine the UAS is in a condition for safe flight. The pre

- flight inspection must account for all potential discrepancies, e.g. inoperable components, items, or equipment. If the inspection reveals a condition that affects the safe operation of the UAS, the aircraft is prohibited from operating until the necessary maintenance has been performed and the UAS is found to be in a condition for safe flight.9

11. The operator must follow the UAS manufacturer’s maintenance, overhaul, replacement, inspection, and life limit requirements for the aircraft and aircraft

components.

12. Each UAS operated under this exemption must comply with all manufacturer safety

bulletins.

13. Under this grant of exemption, a PIC must hol d either an airline transport, commercial, private, recreational, or sport pilot certificate. The PIC must also hold a current FAA airman medical certificate or a valid U.S. driver’s license issued by a state, the District of Colombia, Puerto Rico, a terr itory, a possession, or the Federal government. The PIC must also meet the flight revi ew requirements specified in

14 CFR § 61.56 in an aircraft in which the PIC is rated on his or her pilot certificate.

14. The operator may not permit any PIC to operate unle ss the PIC demonstrates the ability to safely operate the UAS in a manner consistent with how the UAS will be operated under this exemption, including evasive and emergency maneuvers and maintaining appropriate distances from persons, vessels, vehicles and structures. PIC qualification flight hours and currency must be logged in a manner consistent with

14 CFR § 61.51(b). Flights for the purposes of training the operator’s PICs and VOs (training, proficiency, and experience

- building) and determining the P IC’s ability to safely operate the UAS in a manner consistent with how the UAS will be operated under this exemption are permitted under the terms of this exemption. However, training operations may only be conducted during dedicated training sessions. D uring training, proficiency, and experience

- building flights, all persons not essential for flight operations are considered nonparticipants, and the PIC must operate the UA with appropriate distance from nonparticipants in accordance with 14 CFR § 91.119.

15. UAS operations may not be conducted during night, as defined in 14 CFR § 1.1. All operations must be conducted under visual meteorological conditions (VMC). Flights under special visual flight rules (SVFR) are not authorized.

16. The UA may not operate with in 5 nautical miles of an airport reference point (ARP) as denoted in the current FAA Airport/Facility Directory (AFD) or for airports not denoted with an ARP, the center of the airport symbol as denoted on the current FAA

published aeronautical chart, unl ess a letter of agreement with that airport’s management is obtained or otherwise permitted by a COA issued to the exemption holder. The letter of agreement with the airport management must be made available to the Administrator or any law enforcement offi cial upon request.

17. The UA may not be operated less than 500 feet below or less than 2,000 feet horizontally from a cloud or when visibility is less than 3 statute miles from the PIC.10

18. If the UAS loses communications or loses its GPS signal, the UA must re turn to a pre

determined location within the private or controlled

- access property.

19. The PIC must abort the flight in the event of unpredicted obstacles or emergencies.

20. The PIC is prohibited from beginning a flight unless (considering wind and forecast

we ather conditions) there is enough available power for the UA to conduct the intended operation and to operate after that for at least five minutes or with the reserve power recommended by the manufacturer if greater.

21. Air Traffic Organization (ATO) Certifi cate of Waiver or Authorization (COA). All operations shall be conducted in accordance with an ATO

- issued COA. The exemption holder may apply for a new or amended COA if it intends to conduct operations that cannot be conducted under the terms of the att ached COA

.

22. All aircraft operated in accordance with this exemption must be identified by serial number, registered in accordance with 14 CFR part 47, and have identification (N

Number) markings in accordance with 14 CFR part 45, Subpart C. Markings must b e as large as practicable.

23. Documents used by the operator to ensure the safe operation and flight of the UAS and any documents required under 14 CFR §§ 91.9 and 91.203 must be available to the PIC at the Ground Control Station of the UAS any time the airc raft is operating. These documents must be made available to the Administrator or any law enforcement official upon request.

24. The UA must remain clear and give way to all manned aviation operations and

activities at all times.

25. The UAS may not be operated by the PIC from any moving device or vehicle.

26. All Flight operations must be conducted at least 500 feet from all nonparticipating persons, vessels, vehicles, and structures unless:

a. Barriers or structures are present that sufficiently protect nonparticip ating persons from the UA and/or debris in the event of an accident. The operator must ensure that nonparticipating persons remain under such protection. If a situation arises where nonparticipating persons leave such protection and are within 500 feet of the UA, flight operations must cease immediately in a manner ensuring the safety of nonparticipating persons ; and

b. The owner/controller of any vessels, vehicles or structures has granted permission for operating closer to those objects and the PIC has made a safety assessment of the risk of operating closer to those objects and determined that it does not present an undue hazard.11

The PIC, VO, operator trainees or essential persons are not considered nonparticipating persons under this exemption.

27. All operat ions shall be conducted over private or controlled

- access property with permission from the property owner/controller or authorized representative. Permission from property owner/controller or authorized representative will be obtained for each flight to b e conducted.

28. Any incident, accident, or flight operation that transgresses the lateral or vertical boundaries of the operational area as defined by the applicable COA must be reported to the FAA's UAS Integration Office (AFS

- 80) within 24 hours. Accidents must be reported to the National Transportation Safety Board (NTSB) per instructions

contained on the NTSB Web site: www.ntsb.gov

.

If this exemption permits closed

- set motion picture and television filming and producti on, the following additional conditions and limitations apply.

29. The operator must have a motion picture and television operations manual (MPTOM) as documented in this grant of exemption.

30. At least 3 days before aerial filming, the operator of the UAS affec ted by this exemption must submit a written Plan of Activities to the local Flight Standards District Office (FSDO) with jurisdiction over the area of proposed filming. The 3

- day notification may be waived with the concurrence of the FSDO. The plan of act ivities must include at least the following:

a. Dates and times for all flights;

b. Name and phone number of the operator for the UAS aerial filming conducted under this grant of exemption;

c. Name and phone number of the person responsible for the on

- scene operati on of the UAS;

d. Make, model, and serial or N

- Number of UAS to be used;

e. Name and certificate number of UAS PICs involved in the aerial filming;

f. A statement that the operator has obtained permission from property owners

and/or local officials to conduct the f ilming production event; the list of those who gave permission must be made available to the inspector upon request;

g. Signature of exemption holder or representative; and

h. A description of the flight activity, including maps or diagrams of any area, city,

to wn, county, and/or state over which filming will be conducted and the altitudes essential to accomplish the operation.

31. Flight operations may be conducted closer than 500 feet from participating persons consenting to be involved and necessary for the filmi ng production, as specified in the exemption holder’s MPTOM.12

Unless otherwise specified in this grant of exemption, the UAS, the UAS PIC, and the UAS operations must comply with all applic able parts of 14 CFR including, but not limited to, parts 45, 47, 61, and 91.

This exemption terminates on March 31, 2017 , unless sooner superseded or rescinded.

Sincerely,

/s/ John Barbagallo Acting Deputy Director, Flight Standards Service