Three weeks after Malaysia Airlines Flight 370 disappeared somewhere in the Indian Ocean, the search area has been reduced to a relatively small 97,300 square mile area, an area about the size of Wyoming. Today, 11 aircraft and nine ships are trolling the area for signs of wreckage, assisted by satellites flying miles overhead.
The search is painstaking and an example of something that would be far better done by drones. They could have been deployed in massive numbers to make the search process faster, more efficient, and less costly than it has been so far.
The benefit of drones is just starting to be understood
Thus far, most of the publicity about drones has been centered on military air strikes or surveillance. But there are a number of practical applications for when drones would be better than using satellite images or man-powered observation. Malaysia Air Flight 370 is just the latest example.
AeroVironment (NASDAQ:AVAV) makes a drone called Global Observer that can fly at 65,000 feet for over a week at a time, covering a 600-mile diameter, or about 283,000 square miles. One aircraft could cover the entire search area and a fleet flying in lower altitudes could make the process fairly efficient.
The Lockheed Martin (NYSE:LMT) High Altitude Airship flies at about the same height as the Global Observer, but it looks more like a blimp than an airplane. Lockheed says the drone can cover a 600-mile-diameter area and provide similar capabilities to satellites with costs 10-100 times lower.
Boeing's (NYSE:BA) Phantom Eye is similar to the two drones mentioned above and runs on hydrogen to fly above the jet stream for up to four days. Boeing is completing tests with the military and NASA to prove out the drone's viability.
These drones are designed for surveillance and search and rescue, so they're a perfect fit for this treacherous search at sea. Unlike most drones available today, they're also able to fly for days, or even weeks at a time. Most of the drones in use today are geared more toward lower altitude, shorter duration missions. They'd be useful of the search area for Malaysia Air Flight 370 was measured in hundreds of square miles but when it's nearly 100,000 square miles they're less effective.
The problem is that none of the drones I've mentioned above are ready for commercial use, meaning that none could be deployed to find Malaysia Air Flight 370. But you can see that the capabilities being tested would be extremely useful for missions like this.
Foolish bottom line
The drone revolution is coming quickly, and there will be a lot of productive uses for unmanned aircraft. With just a few dozen drones, the search for Malaysia Air Flight 370 could have been undertaken at less cost and with fewer man-hours than the current search.
When the market and governments involved realize the potential benefits, I think the upside potential for AeroVironment, Lockheed Martin, and Boeing will be measured in billions of dollars.
Research group BI Intelligence recently estimated that the market for drones will double over the next decade from just over $5 billion to nearly $12 billion. The Association for Unmanned Vehicle Systems International estimates that between the FAA's deadline for integrating drones into the civilian airspace in 2015 and 2025 the total economic impact of drones will be $82.1 billion. By the end of the decade, the FAA anticipates that there could be 30,000 drones in America alone.
Drones are a huge opportunity for investors and as the industry finds more and more utility for drones the traction will only grow. Maybe when the next aircraft goes down over open ocean or the next natural disaster takes place drones will be able to provide information that will give answers and save lives.
Travis Hoium manages an account that owns shares of AeroVironment. The Motley Fool recommends AeroVironment. The Motley Fool owns shares of AeroVironment and Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.