ANQUETIL, Ms Kym, General Manager, Dronamics Airlines Australia Pty Ltd GOMES, Mr Gavin, Chief Revenue Officer, Dronamics Airlines Australia Pty Ltd [12:25] ACTING CHAIR: Good afternoon. I understand that information on parliamentary privilege and the protection of witnesses giving evidence to Senate committees has been provided to you. Would you like to give us an opening statement, please? Mr Gomes : I'll let my colleague, Kym, start, and then I'll finish. Ms Anquetil : Thank you for the opportunity to appear today. We represent Dronamics Airlines Australia, a cargo-only remotely-piloted aviation operator. Our submission is about utilising advanced technology to move freight more efficiently and reliably to and from regional and remote communities. The starting point for our paper is a simple observation: regional freight currently moves largely by road from capital city hubs. That model creates weaknesses for rural and remote communities, as they are more exposed to weather-driven disruption and rising fuel costs than their metropolitan counterparts. We put forward a model based on the Dronamics Black Swan remotely-piloted medium-payload cargo aircraft operated from a centralised network control centre. These aircraft are designed to operate from shorter runways with minimal airport infrastructure. Our submission outlines three main areas of benefit. First is economics and competition. We see that businesses introducing regular air freight options at currently underserviced locations has the potential to support growth in sectors such as agriculture, resources, manufacturing and e-commerce. Also, a freight network of regional airports could support hundreds of direct and indirect jobs in local supply chains. Second is resilience and essential services. During disasters, rural and remote communities can become isolated with rail and roads cut. Remotely-piloted aircraft can offer a lifeline during these times by continuing to deliver communities with critical supplies and to ensure resilience. Third is industry capability and sovereignty. The medium-sized cargo-only aircraft we operate and manufacture can be an anchor for the advanced manufacturing ecosystem in Australia. Our submission identifies that realising these benefits depends on two things: government support in coordinating key stakeholders, and targeted support to de-risk our early deployment. The message of our paper is that now is the opportunity to innovate how we move freight and critical supplies to and from regional and remote communities. Remotely-piloted freight can deliver that shift, turning underutilised airports into logistics nodes offering reliability for regional communities, improving resilience for essential services and rebuilding elements of sovereign aerospace capability. Thank you again for the opportunity to appear. Mr Gomes : I'd like to make a small statement based not on our paper but on ambition and Australia's ambition. Australia's modern identity has been forged on those of pioneers like Sir Kingsford Smith and Freda Thompson. They looked at our vast, disconnected landscape and geography not as a barrier but as a challenge to be solved through flight. The scale of aviation in Australia is not just a luxury; it's an essential service and a primary tool for national equity. We believe we are now standing on the next threshold of aviation, and that tyranny of distance is very much a reality for many Australians today. What our pioneers fought for we now have the opportunity to solve. We can solve that for regional and remote communities, who still face higher costs, greater isolation and much more than their metropolitan counterparts. By embracing advanced, remotely piloted aircraft and other such technologies, we can pioneer 21st-century aviation and have a 21st-century ambition. This is not just about moving freight. It's about using breakthroughs in automation and technology and aerospace to serve our national interests, to rebuild a sovereign manufacturing capability and to ensure that every Australian citizen, regardless of their postcode, is connected to the essential supplies, services and economic opportunities that they deserve. Thank you. ACTING CHAIR: Thank you. Senator Dolega. Senator DOLEGA: Thanks for appearing today. Obviously, your business model and your business is about freight rather than passenger aviation. I was having a look on your website at some of the planes and technology, as you were speaking. It's quite fantastic, really, looking at it. In your submission you talk about regional airports being underutilised. What characteristics make your business model suitable for regional airports? Mr Gomes : Firstly, you need to look at the pixelation of the aircraft. Our aircraft carry up to 350 kilos of freight. A six-seater Cessna is probably the best comparison for the size of the aircraft, with slightly larger wings, which means we need smaller runways and minimal infrastructure to make those aircraft cost effective. Also, our pilots can be located regionally, so we don't need to move pilots to remote locations. That makes it much more economical to run. And, on the other side, when you talk about connecting small pixelated freight to services where you have last-mile delivery, we just need a man in a van, so to speak, to deliver that freight. Things like Amazon and moving freight from Mildura to a small regional airport like Echuca become quite economically viable because you're only moving one vanload of freight at a time, which means your frequency can also be accelerated. Senator DOLEGA: So your business model is picking up on additional demand in the freight sector; you're not taking away from other freight operators. You're complementing new and emerging business needs. Is that right? Ms Anquetil : It'll be a little bit of both. We are definitely focusing on that middle-mile piece that is traditionally covered by that white-van-size courier. We can certainly deliver in shorter timeframes and, again, with that higher frequency. That will certainly take some of those vehicles off the road. That's part of our model. Also, once those regional and remote communities understand that that service is available to them, it's reliable and it's regular, we see that that in turn will actually stimulate further economic use cases for these aircraft. Mr Gomes : I'll add to that. You need to reimagine the current freight model. Today you need a hub-and-spoke model, and typically those hubs are in large capital cities and they have large facilities. In fact, the world has driven that freight model to exactly that: bigger facilities and bigger processing. I used to be the general manager for Australia Post parcel services. From that perspective, this changes that whole model. Suddenly you can not have the hub and not have everything moving through that hub, and you can go from spoke to spoke much more efficiently and in a faster timeframe. Senator DOLEGA: What are some of the barriers to deployment in Australia? Mr Gomes : I think the key barrier to deployment, given we have global opportunities, is really the ambition for Australia and the complexities of moving through federal, state and local governments, as well as the regulator. We are friendly in terms of our regulatory environment. We have regulatory approval through IASA, which Australia cooperates very well with. We're on JARUS, which is a consortium of over 64 nations coming together on drone regulations. So I think it's that national coordination and then the ability for government not to provide subsidies, as is often the ask, but to provide opportunities for investors to have certainty about the future. As an example of that, I know there are significant subsidies given to the delivery of mail for regional customers. That costs the government. It costs the citizens of Australia. There are opportunities for that to be done more efficiently and cheaper. Senator DOLEGA: How safe is the technology? Do storms affect being able to pilot the aircraft remotely? Ms Anquetil : The aircraft and its systems are built to a very robust standard with a view that we will be achieving the EASA certification standards. This has very much been demonstrated through our successful flight-testing program, which is currently in place in Europe. Just like any aircraft, it is susceptible to weather. As far as the communication standards go between our remote pilots of the aircraft, that's simply done through radio frequency and satellite communication. As long as there's no interference with those—and we have very strict protocols around those areas of communication—it operates essentially like an aircraft you would see today. Mr Gomes : I think, to add to that, the expectation of the public is that aviation is safe. Our approach to safety is that we will meet the same standards as those the aviation regulator demands for freight transport. In addition to that, because of the size of our aircraft, we have a ballistic parachute on board, for example. If something does happen, the aircraft can actually come down, whereas you can't do that with a 737 or a much larger aircraft. Senator DOLEGA: Training for the pilots—how different is that to, say, training somebody for a smaller aircraft? Ms Anquetil : It would be incredibly similar. We currently employ a number of pilots who come from airline backgrounds. As we progress with the expansion of our operation, the skill set for the way we operate will become a lot more simplified for the pilot, to the point where they'll actually be able to manage multiple aircraft at one time. It's a slightly different skill set to what you would see now in pilot training, but it's going to open up opportunities for people who perhaps in the past weren't able to become pilots because of the limitations and the strict restrictions around what you needed to be a pilot. We can now open that up to people of various abilities—to start flying these aircraft—as well. Senator DOLEGA: Winning over public support for unmanned aircraft such as these—you had me a little bit concerned when you mentioned pilots piloting multiple aircraft. At least, in a plane you've got one or two pilots. You know that their eyes are on the ball the whole time. How do you plan to win over the public on the safety of pilots potentially managing multiple aircraft? Ms Anquetil : Yes. That's probably a safety advantage that we have. Where we have a network operation centre, we would have multiple pilots in the room. Should one aircraft require more attention in the event of an emergency, a pilot can hand the additional aircraft over to the other pilots and deal with the emergency at hand. That's how we manage that. Mr Gomes : To add to that answer, we propose engaging quite deeply with local communities. In fact, we have done so with a number of communities who very much support more freight and more regular services. Ninety-two per cent of airports around the world don't have a scheduled freight service, so they can't reliably say my Amazon parcel is going to get here today, let alone my medical supply, my pharmaceutical goods and those kinds of things. In terms of that support, we are only freight. If something were to go wrong, we have that safety mechanism, being the parachute. But, again, it's freight that is impacted, not people so much. I think the public acceptance—the pathway to automated flight, unlike self-driving cars, is very much about freight first and proving it is safe and then moving towards passenger flights. Senator DOLEGA: Thanks very much. ACTING CHAIR: I'm just trying to get my head around how this slots in and contributes to the viability of, say, a regional airport. From what you're saying, it's that extra utilisation which then makes that further contribution. What sort of ground support is required at either end, apart from the person who unloads the van and reloads the van? What's the logistical support that's required in terms of supporting the network? Mr Gomes : When you pixelate aircraft from a 737 to much smaller aircraft, you need many more of them. We envisage that several hundred aircraft are required in Australia just for this kind of service. So you need ground crews to unload and reload. You need maintenance staff. Aircraft will have to be parked somewhere of an evening. They don't all come back to a centralised hub. So we envisage both direct and indirect jobs, as well as manufacturing jobs, as a result of building an autonomous freight network or at least a remotely piloted freight network. ACTING CHAIR: How does that manifest in a place that might have an airstrip but is relatively remote? It becomes part of another service provision, I suppose, for a local small business. Mr Gomes : That's correct. For example, there will be someone delivering last-mile freight for Amazon or Australia Post, or there'll be a contractor doing that. That will be additional services for that person in the last mile. There might be someone maintaining locally based aircraft. Again, we're talking about a light aircraft kind of size, not heavy aircraft. That's additional work for that particular person. There will be packing opportunities, and there will be local industry that will start because now you're connecting community to community. That is not available today, because the cost—the tax—for those businesses and those individuals to get freight to and from their locations is excessive. ACTING CHAIR: I completely lost my train of thought there off the back of your answer. What jurisdictions are these registered in right now? Mr Gomes : The aircraft itself? ACTING CHAIR: What level of utilisation are we talking about? Mr Gomes : We're currently undergoing flight testing. We've built three aircraft that are undergoing flight testing. They're based currently in Bulgaria, but they have EASA approval, so that's for all of the European Union, plus four countries aside from that. We also have dual export control licences for Europe, the US, Canada and Australia. Senator McKENZIE: Will CASA let you fly them? Mr Gomes : We're working with CASA. If we make an application, we'll work with CASA to do so. The good news about that is that the regulatory environment for EASA and CASA is quite cooperative, and they will talk to each other. So CASA will look at some of the flight testing we're doing over there. We may not necessarily have to do all of that testing again over here, but there will be some locally based requirements. ACTING CHAIR: What's your timeframe on this? Ms Anquetil : There's quite a number of pieces of the puzzle that will have to come together. Part of that is us talking to you here today and driving that government support that we see for not only us—the organisation Dronamics—but also the broader remotely piloted community. With government support and with us establishing key clients here within Australia and potentially additional partnerships, that timeframe can shift left or right of arc. ACTING CHAIR: Well, the big question mark is really the regulatory framework, isn't it? What time does it take you to get through the regulatory process? That would be the key point on the critical path. Mr Gomes : This particular size of aircraft—the large UAS aircraft—is a case-by-case scenario with CASA. We have been working very closely with the director, Pip Spence, and her team on this particular issue. Again, our model doesn't require large cities as unmanned passenger aircraft or eVTOL aircraft do. We actually can prove a use case in regional areas. So CASA are very happy to work with us, because they're saying, 'You're starting in much lower risk scenarios.' We can fly over water, and today we are flying in Europe safely and we've conducted multiple flights safely. They will take that into account. Going to Kym's point, what we require here is this coordination at a national level between federal and state. The regulator is actually very happy to help us, but I think it's all of the other pieces that are more complicated in bringing this together. ACTING CHAIR: You talk in your submission about some cost savings on freight. What's the basis for your numbers for that? Mr Gomes : There are a couple of pieces to that. Firstly, there's the absolute cost of time, and that is trucking a good from a regional city to a regional city. And, as I said, going— ACTING CHAIR: You're not talking productivity, are you? Mr Gomes : A little bit of productivity, of course. ACTING CHAIR: I just thought I'd throw in the latest buzzword. Mr Gomes : Time is absolutely of essence. Secondly, there's cost savings in terms of economics. We only use 9.8 litres per 100 kilometres, which is a little bit more than a city car. But we get there in one-third of the time. So suddenly you get time and cost savings. We're greener. We use unleaded fuel as opposed to avgas, which is leaded, in general aviation today. We have a pathway to SAF and hydrogen, which is on our website. And we've already tested that—particularly the SAF, which is out of the manufacturer's specification and which we currently use in the Rotax engine that burns SAF out of the box today. So we can do that—provided people are prepared to pay for it and we have the fuel, which is another issue in the country at the moment. So I think those are the fundamental advantages. Finally, you have the people saving. We don't need a pilot for every aircraft, to Kym's point before. We can have multiple pilots sitting in their regional capital cities and piloting aircraft—actually, from anywhere in the world. So we don't necessarily even need them in the country, but our approach is that we will have pilots within the country. ACTING CHAIR: So in terms of managing and maintaining your fleet, that will have a sovereign capacity. But you will also look at contracting, from what you've said, to regional suppliers. Mr Gomes : I think where those capabilities— ACTING CHAIR: How do you manage a maintenance issue on King Island or Flinders Island, for example? Senator McKENZIE: That's a good question. Mr Gomes : It is a good question. I think what you'll find is that much of that capability actually exists in light aircraft on Flinders Island, because that's how they actually commute today in passenger aircraft. We're not asking for additional capability that doesn't exist today. The real advance that we have is in composite manufacturing, and this might be something that has a national interest, in terms of building this capability. We have carbon composite aircraft that are lighter, stronger, more versatile and have less corrosion—those kinds of issues. We are advocating. We've applied to organisations through ARENA to the Future Made in Australia initiative. Senator McKENZIE: Good luck getting money out of that. Mr Gomes : Well, that's my next question. We have applied. ACTING CHAIR: You could put your bid in. Mr Gomes : We have. But it's interesting how much of that funding has actually been disbursed for genuinely opportunistic nation-building activity. And this is what we're advocating for. We would like to build those aircraft in Australia with Australian IP and Australian talent. And that is an initiative for manufacturing for the future. It's something that is growing worldwide. ACTING CHAIR: What's the forward demand for this? If you're going to build your Australian fleet here, that's one thing; that's fine. And you'll build parts and things of that nature. But a lot of the time what happens is that somebody will gear up for this particular project. Then, at the end of this project, there's a whole big 'Oh, what's next?' question. The development of the sovereign capability I get and support, but, once you've supplied our fleet—where to? Mr Gomes : If you read through what's publicly available from our website and our information, you'll see we have announced partnerships with companies like Hellmann worldwide cargo. We have five years worth of forward demand already locked away in terms of MOUs and interest, without any of the Australian freight that we're talking about. You also have countries off our doorstep with over 100 million people, like Indonesia—and 14,000 islands. So we could produce aircraft here not just for Australia but for the region. And, if you're going to produce and manufacture and you want certainty of regulatory environment, certainty of manufacturing and certainty of security, Australia is one of the locations we would love to produce aircraft. ACTING CHAIR: That does go specifically to the question that I was asking—that it's not just a short-term exercise at that point. It's to develop the IP here and then export the product, off the back of that, to the region. Mr Gomes : No, we would like to develop the IP here for Australia, and Australia has certain conditions that are replicated in other parts of the world. So we would absolutely do that. Again, there's a regional play. Border patrol; SES, the state emergency service; and those kinds of applications are absolutely there for our aircraft. We have MOUs with, for example, the New South Wales SES for flood, emergency and fire relief. And we have the largest coastline in the world, so that observation of the coastline, in an incredibly cost-effective way, is another opportunity for the aircraft. Senator McKENZIE: It's also a risk, though, that your aircraft is used for surveillance and civilians, I guess. There's one thing on surveilling our coastline and dropping off pharmaceuticals or goods in people's backyards—making sure there's confidence that that is also not a surveillance tool. Mr Gomes : Absolutely. We have two different platforms. One is a cargo-only aircraft software, and the other one is an ISR-capable aircraft. When we've been talking about those applications, they are very much sovereign capabilities coordinated with any sovereign nation in the defence area of that particular country. Senator McKENZIE: Not in the suburbs. Ms Anquetil : And, just as aircraft are currently operating at the moment, often the aircraft and the aircraft operator have no visibility of the data that is managed through government departments and third parties. We would simply be supplying the platform to allow that type of surveillance to occur. Senator McKENZIE: Thank you for making that clear. I just want to understand your ownership structure. Mr Gomes : The company is incorporated in Ireland as an incorporation entity. The founders are from Bulgaria, which is an EU nation, and our cap table is that it's a private company and—it's confidential—EIC, the European Innovation Council, is one of the major investors, through the innovation fund. So we are very compliant in terms of non-sanctioned states and any nonallies to NATO and those particular countries. I'm happy to take that privately, offline, and give you some more information about that, but perhaps not publicly. Senator DOLEGA: Do you mind if I just follow up about piloting? ACTING CHAIR: Sure. Senator DOLEGA: There's no planning for artificial intelligence piloting or for humans to remotely pilot? Ms Anquetil : The regulations don't allow for autonomous flight at the moment in Australia, so we are not pursuing that here at the moment. Mr Gomes : I would say that, as with all technology, it's a step-by-step piece. Let's take the first step and make sure that's safe before we move to the next step. But I can't tell you where technology will go. It's moving very, very quickly; that's for sure. ACTING CHAIR: In terms of where you would kick dirt first—start—where would you see as your starting point here in Australia as far as provision of service? Mr Gomes : I think there are a number of locations. There are probably two answers to that. From an economic point of view, I certainly see distance as the biggest opportunity; both WA and Queensland are natural places where you see that. They have the biggest—let's say—distance tax for their citizens, the biggest opportunities to provide equity for their citizens. So, in a national-interest point of view, I think that's the biggest opportunity. It also provides the greatest level of safety because they're generally lower levels of populations. Flying over less densely populated areas is something that CASA would like to see, so I think, for my answer, that's probably— ACTING CHAIR: As part of a proving process? Mr Gomes : As part of a proving process. Then connecting, I would say, larger regional communities would be next—so Tamworth to Mildura or that kind of size—but not going through a centralised hub. As we talked about previously, passenger traffic goes through Brisbane. We don't need to do that; we could go direct. ACTING CHAIR: How do your systems interact with the existing system? I'm thinking about delivering the mail or pharmaceuticals to Flinders or King Island. The infrastructure is there, but there's also traffic there. Since the golf courses came along, King Island is much busier. How do your systems interact with the existing systems, or how do you interact with those systems as part of that process? Mr Gomes : We would just plug into the standard systems, in terms of the logistics environment—the same scanning tools, the same information tools— ACTING CHAIR: So you can see everything that everyone else can see through— Mr Gomes : The software. ACTING CHAIR: the software of the system? Mr Gomes : The software, in that respect. So I think that, from a commercial logistics perspective, there would be no change for the customer and no change for the businesses. Small businesses could inject freight. I would argue that, when you put your parcel into the network today, you don't know whether it goes by van, truck— ACTING CHAIR: I'm thinking more of the aviation system. How do you make sure your system plugs appropriately into that? I'm not too worried about the logistics supply chain. I get you're a small caravan, and someone unloads one and loads the other—all that sort of stuff. I think we've covered that stuff. I think this goes to the public confidence thing as well. There are 700 of these things whizzing around the countryside. How do they interact with the rest of our aviation system? That is the question. Ms Anquetil : Yes, certainly. I think there are really three components there that we can talk to. One is: how do our remote pilots talk to air traffic control and have that level of communication? It's very similar to what you see now; however, our pilots happen to be sitting in an office with an antenna, and they can communicate through traditional radio services with air traffic control. There's the opportunity for them to talk to air traffic control via phone as well, which is something we currently do in Europe on occasion. That is a seamless process that we've already proven, and that is seen and done in how we operate now. Then there's the remote pilot to the aircraft piece. We do that through radio frequency directly to the aircraft, as well as through satellite communication. The remote pilot controls the aircraft through those mechanisms. Then there's the last piece of the puzzle, which is probably something that we would want to raise for government. It is the aircraft to aircraft piece and how we interact with other aircraft in the sky. Because of the size of our aircraft, we essentially have all of the equipment that you would see on a crewed aircraft today, so we have the ability to interact and electronically identify other aircraft and also transmit our identification. That's done through ADS-B, the automatic broadcasting system that is fitted to most aircraft. One thing that has been on the government's agenda for many years, and certainly on CASA's agenda, is that they have identified that increasing safety in aviation is mandating the fitment of ADS-B to all aircraft in Australia, and we would certainly ask that government revisit that. It is currently not compulsory; however, government do subsidise all aircraft owners to fit this equipment to the aircraft. We'd actually ask government that they look at mandating that fitment, because, at the moment, the risk is placed on us, as operators who are fully equipped with all of the safety equipment, to actually identify, detect and then avoid somebody who has chosen not to fit that equipment to their aircraft. ACTING CHAIR: So being able to see it, whether it's eyeballing it out the windscreen or seeing it virtually through the electronic tracking system, is the mechanism that you have. Your integration into the rest of the system is basically because you're operating as a part of it, but the capacity to identify everybody else in the system is the last step. Mr Gomes : We have the same capacity as every other aircraft, either ADS-B, electronically or visually but through a camera—we don't have eyeballs; we have a camera, which can probably do detecting of objects better than some visual aspects can today, but it is the same system, as Kym said. There are two further aspects that are probably relevant here. Firstly, we are a scheduled freight service, so, unlike a passenger aircraft that might be an air taxi, we don't say, 'Let's get in the aircraft and go somewhere that you don't know initially.' We have a scheduled departure time, arrival time and corridor or flight path. That is all known, and that can be done via NOTAMs, notices to airmen, which is done overseas. That is how we do this in Europe with a scheduled corridor. There are known paths that we will fly at known times. The second piece is that we don't need oxygen. We don't have oxygen on our aircraft, but we don't have any crew on board, so we can fly at a height above general aviation but below the passenger aircraft—typically in that 10,000- to 13,000-foot altitude, which they deem as transitional altitude. We can fly in that quite comfortably for a long period of time. So there is minimal conflict in terms of traffic, except for climb and descent, of course, and approach to the airport. ACTING CHAIR: So there are separations. Mr Gomes : Correct. ACTING CHAIR: Alright. We could probably play down this path for a while, but that's given us a good picture, I think. Thank you for your evidence. Mr Gomes : We're delighted to see the interest from the Senate and the inquiry. ACTING CHAIR: It's another element of what provides service to our regional areas, which is what we're interested in. Senator McKENZIE: Can I encourage you to also put in a submission to the Select Committee on Productivity in Australia? One of the terms of reference is about freight supply chains. I think you are in the box seat, particularly for that first- and last-mile piece. Mr Gomes : Absolutely. ACTING CHAIR: Thank you for your evidence. I don't know if you took anything on notice, but, if you did, could we have that by 30 April, please. Proceedings suspended from 13:02 to 14:00 .