In this semester thesis we show how carrying a payload affects the dynamics of the quadrocopter and trajectory feasibility. Moreover, it shows that compensation for the payload’s inertial parameters can improve the trajectory tracking performance. First, recursive least square estimation algorithm with fading memory is presented to estimate the payload’s inertial parameters, and modification in the on board controller is introduced to compensate for the payload. The results are implemented and tested in the Flying Machine Arena in ETH Zurich. Finally we show how the feasible set of time-optimal trajectories can be influenced by the presence of a grasped object.