Amazon share price up, receives approval for outdoor drone testing

Amazon.com Inc was granted a regulatory approval to test its flying drones outdoors, a step forward for the e-commerce giants ambition to start air deliveries.

On Thursday the Federal Aviation Administration allowed Amazon to begin testing its drones in open spaces by granting it the “experimental airworthiness certificate”.

The largest e-commerce company in the U.S. aims to utilize the drones in order to launch a new 30-minute delivery-by-air service. The delivery location, however, must be in a 10-mile radius from a companys warehouse, Amazon have said.

Until now the company has been forced to test the flying robots indoors, somewhat limiting the testing. Amazon has already conducted some outdoor drone testing but outside the U.S.

However, the permission does have restrictions. Amazon could test its drones only during the day and within 400 feet of the ground, 100 feet lower than what the company asked for. Additionally, Amazon has to keep the drones in sight during flight and within the limits of its private, rural land in Washington state.

With its permission the FAA also requires Amazon to issues a report every month, including information related to the number of tests it had conducted and whether it had any accidents, malfunction or similar.

The current certificate only applies to a specific drone, meaning that the company must obtain a different certificate if it modifies the flying machine. This restriction alone would make it very difficult for Amazon to optimize the drones capabilities.

Previously, Amazon had announced that it would aim to program its drones to flight on their own and reach locations, while also avoiding obstacles on the way.

Earlier this year the FAA introduced general guidelines for drones as they have become a area of interest for both businesses and individuals. The final rules, however, are not expected until next year at the earliest.

Separately, Amazon said it had expanded its Prime Now service to Baltimore and Miami. The company introduced its one-hour delivery service in December, which is only available for Prime members, or the companys $99-a-year program. The company said initially the service will cover select Baltimore and Miami areas with the intention to expand within those cities.

“Since launching, we’ve seen high demand on everything from essentials like water and paper towels to more surprising deliveries like getting a customer a hard-to-find, top-selling toy in 23 minutes, said Dave Clark, senior vice president of worldwide operations.

Amazon lost 0.51% on Thursday and closed at $373.24 on the NASDAQ, landing on the same level as a year ago. The company is valued at $174.21 billion. The stock edged up 0.07% on Friday during after-hours trading.

According to the Financial Times, the 37 analysts offering 12-month price targets for Amazon have a median target of $400.00, with a high estimate of $475.00 and a low estimate of $312.00. The median estimate represents a 7.17% increase from the last closing price.